Unregulated Capitalism Harms The Country These Six Ways
By Rev. Bill McGinnis, Director - LoveAllPeople.org
NOTE: HTML version of this message, with more links, is at http://www.loveallpeople.org/unregulatedcapitalism.html
Unregulated profit-seeking corporations cannot be trusted to protect the Public, because their main objective is to make profits, not to be a do-gooder for the Public. Whenever profit-making conflicts with the Public interest, profit-making wins! Thus they become Predators on the Public, not Protectors of the Public.
This is not a radical idea, but an obvious fact, if you think about it. Profit-seeking corporations exist to make a profit, and the more profit, the better. Anything which increases profits is good for them; and anything which decreases profits is bad. So they try to do whatever is necessary to make profits. This is the essence of Laissez-faire Capitalism: that profit-seeking corporations should be left alone to do whatever they choose to do in order to make profits.
Employees get paid to help the company make a profit, not to be a do-gooder for the general Public. Just suppose a local manager decided to give away $1,000,000 of the company's money to build a playground for the neighborhood children. "The kids need the playground!," he says. Unless this playgound were part of some co-ordinated Public Relations effort, intended ultimately to produce greater profit, the employee would probably be fired, and replaced by someone with a better profit-making attitude.
Suppose an auto manufacturer had some kind of a safety problem, perhaps gas tanks that sometimes exploded on impact. And suppose it would cost a hundred million dollars to fix the problem, but it would only cost ten million to let the problem continue, and pay off the victims who sued and won. What do you suppose the company would do? It would let the problem continue, of course! Deny that a problem exists, claim it was the user's fault, and pay off damages only when forced to do so. These kinds of decisions happen all the time. Why do you suppose the corporations are so eager to get "Tort Reform?" To limit their payoffs for damages, of course! So their profits aren't hurt so much! "To hell with the Public," they think. "They should be more careful!"
And if the Management of a profit-seeking corporation ever did choose the Public interest over a higher profit (unless it were forced to do so by some kind of government regulation), then that corporation would be violating its financial duty to its stockholders. And the stockholders would be entitled to replace the do-gooder Management with a profit-oriented Management.
UNREGULATED CAPITALISM HARMS THE COUNTRY THESE SIX WAYS
We are talking mainly about the larger, publicly-traded, profit-seeking corporations like those whose stocks are traded on the stock exchanges. But the same ideas can apply to any unregulated profit-seeking corporation, even the smaller ones and the private ones.
We recognize that profit-seeking corporations can be a great force for good in the world, creating and providing wonderful goods and services that would be unavailable by any other means. But we also recognize that if they are unregulated, they harm the public these six ways. An unregulated corporation is like a loose elephant in your neighborhood. Who can stop it from trampling over whatever it chooses?
1. NOT PAY TAXES -In order to maximize profits, they always seek to avoid or minimize their taxes.
2. ELIMINATE COMPETITION -In order to maximize profits, they always seek to eliminate or control their competition.
3. CUT WAGES AND SALARIES - In order to maximize profits, they always seek to reduce their labor costs.
4. DISREGARD THE ENVIRONMENT - In order to maximize profits, they always seek to avoid all environmental restraints.
5. SELL DANGEROUS, HARMFUL PRODUCTS - In order to maximize profits, they are tempted to sell dangerous or harmful products.
6. CONTINUOUSLY SEEK GREATER PRIVATIZATION AND DEREGULATION - Pretending to be "efficient," they transfer ownership and economic control from the Public to the Big Investors. And if Corporate Greed totally overwhelms their morality, who will protect the Public from their rampaging excesses?
Please also see "The Twin Frauds Of Privatization And Deregulation" at => http://www.loveallpeople.org/twinfrauds.html
SO WHAT SHOULD WE DO?
We need profit-seeking corporations because they are very efficient and very innovative. They are quick to provide products and services to fill needs, if the profit is there. They can do great things very quickly. But they cannot be trusted to protect the Public, if it hurts their profits to do so. And it is unreasonable to expect that they should - unless they are somehow compelled to do it. But we cannot allow them simply to run loose, like rampaging elephants, trampling down whatever is in their path.
The answer is GOVERNMENT REGULATION! Yes, Government Regulation of profit-seeking corporations. Reasonable regulations, applied fairly, so that all the companies are in the same boat and nobody gets any special advantage. This is not difficult to do, but it does require some effort. And it requires going against the current right-wing Republican policies of Laissez-faire Capitalism: that profit-seeking corporations should be left alone to do whatever they choose to do in order to make profits.
Blessings to you. May God help us all.
Rev. Bill McGinnis, Director - LoveAllPeople.org
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