Sociopathic Capitalism

Those of you familiar with my musings know that I include the lack of corporate morality as a root cause for many of today’s ills. Today, I’d like to zero in on a more specific area, albeit related: capitalism without conscience.

Capitalism makes our economic engine churn. Historically, entities interested in making money found it extremely advantageous to make something that others would want to purchase. Nothing harmful, mind you, because any success would be short-lived once customers started falling by the wayside. Also, to be considered a good neighbor, there would be no disposing of toxins, etc. in an unsafe manner. In other words: conscience strode hand-in-hand with profitability and long-term viability. And this was a good thing.

Over time, however, “long-term” was redefined as this fiscal year or perhaps even a quarter as executive compensation escalated and golden parachutes became the exit of preference from any boardroom. All of a sudden, making money now took precedence over making money the right way. Manufacturing was sent off-shore because, after all, making something here required commitment and a large, expensive labor force.

Small, family businesses were not immune as they were beset by children loathe to follow in their ancestral endeavors. With no one to carry on the legacy, many enterprises were shuttered or sold to conglomerates who had long ago forsaken any whit of conscience. And the wheel continued to turn.

We now find ourselves in a world where, while we continue to extol the virtues of capitalism, we find much of our “capital” going to (or coming from) foreign nations. We no longer make many things of substance, our unionized workforce is below 12%, the middle class is shrinking, and anyone with something to sell finds that few on the home-front have available cash. Why? It might be because the financial sector has recently grown at an alarming rate as an economic substitute for manufacturing. Banks became too big to fail and enjoyed the luxury of a government bailout as they teetered on the ledge of insolvency. Now they can get almost interest-free money from the Federal Reserve and then immediately put it back into the government through the purchase of bonds. It’s a no-lose investment with guaranteed return. Why loan the same money to some business that may default?

American companies are behaving no better: they are currently sitting on roughly $2 trillion in cash. Why not invest this money into manufacturing, etc? Well, investment is occurring, but not within our borders. It’s just too expensive, you see, and what with the expectations of the shareholders, it makes more sense to build abroad.

The arguments above make perfect financial sense, but leave out the conscience that is most important if capitalism is to flourish once again. In the meantime, the middle class continues to whither from a lack of skilled positions available and the gap between haves and have-nots continues to widen. No longer are managers interested in long-term success for their company or their employees or their community. They are concerned with a bottom line that provides them with the opportunity of early retirement.

Some might argue that capitalism never had a conscience and never will (or should). And they might be spot-on. Maybe globalization has led us to our current malaise. As world economies settle to the lowest common denominator, it stands to reason that ours would suffer the most. If so, is there any reason to expect a return to our golden days?  

Our elected leaders continue to ramble on about job creation, but I’m hard pressed to see how any legislative effort can coerce the commercial world into doing something that seems to reduce their financial gain. Until they realize that there is more at stake than money, this sociopathic model of capitalism will continue to exist. Much to the detriment of those seeking what was once known as the American dream.