Capitalism vs Corporatism
Saturday 29 May 2010, 07:52 WST —
I’ve come across a tweet recently from PoisonTheMonkey, about the current BP abomination:
This is what capitalism looks like: http://tumblr.com/xevam3dx2
It’s a disturbing image, and I agree with what she is trying to say, except for her usage of the word “capitalism”. From wikipedia:
Capitalism is an economic system in which the means of production are privately owned; supply, demand and price are mostly set by market forces rather than economic planning; and profit is distributed to owners who invest in businesses. Capitalism also refers to the process of capital accumulation.
It continues with “There is however no consensus on the definition of capitalism, nor how it should be used as an analytical category.”
So pretty much it seems to be a very general word that actually covers a few things, and that’s the problem. Capitalism shouldn’t be a dirty word, there’s nothing inherit in capitalism that means companies should get away with killing flora and fauna. It just means that people and buy and sell stuff they own.
The problem is that we are under a system of corporatism, now I will fully admit corporatism is a capitalist system, but it’s not the capitalism of the system that is causing the problem, it’s the fact the governments of the world give favour to companies/corporations. So I feel PoisonTheMonkey’s statement is actually blaming the wrong thing.
She’s not being malicious at all, she knows the governments attitudes are the problem. What she is describing is what I understand as corporatism, so I would think that is a much better word to use to describe the problem.
As far as the BP situation goes, the American government should be stepping in, and making BP pay for a 100% clean up, until it’s fixed, or BP have no more money left. Corporations are all about profit, so if you make disasters like this cost them, they will make sure it’s fixed quickly and never happens again.
4 Responses to “Capitalism vs Corporatism”
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May 29th, 2010 at 9:36 pm
Heya. :)
I see what you mean, and of course it is specifically corporations that are the problem. However:
-I'm not aware of anyone (although there likely are some) who disagrees that capitalism eventually results in corporations or similar structures. At the very least, corporations are a natural outgrowth of capitalism, just like social clashes often happen when you've got low resources. The reason being is that in a system where profit is a, if not the, goal, methods of maximizing profit are going to happen. And that's exactly what a corporation is – everyone involved gets a great deal more profit, while there is also less personal risk and responsibility. So the problems with corporation are part of the problems with capitalism – corporations put profit first just like every other aspect of capitalism, the difference is they're more effective at it.
-There is more to the BP oil spill that is the fault of capitalism than corporations. Environmental efforts and attempts to stem or end oil usage are often met with cries of "but the economy!"…despite, of course, the entire point of having a strong economy being to have good living conditions, and what better living conditions are there than an environment which isn't falling apart? Capitalism also has a role in the fact that the leak occurred at all – I'm sure you've read about the numerous corners which were cut in order to save money. And that's what happens in capitalism, when profit is the bottom line: common sense go right out the window. From advertising to production and distribution, honesty, safety, and morality take a back seat. If profit had not been the bottom line, we probably wouldn't have massive amounts of oil spewing into our oceans as we speak. And, of course, capitalism is the reason we deplete our resources far past what we actually need, etc, etc.
Hope that helps explain my position. I'd love to continue to talk about it! Thanks for the mention & chance to yammer on about something. :)
May 30th, 2010 at 8:35 am
I understand, and I certainly can't argue that if you leave corporations to their own devices they will always optimise in their self interest. But I still think I can bring it back to being a problem with government, as a corporation is still a government construct. The whole idea of a 'corporation' is purely government driven, they are registered entities that allow a group of investors to limit their liability, and I think that is part of the problem.
All of the people that are making the decisions are protected from the actions of the corporation (mostly), by the government laws. I'm really not too sure of your ideas, but I think the capitalism is probably the best system we have at the moment, so far as increasing quality of life as a whole. But like you mentioned, BP cut corners in order to increase profits. I think the solution is to make this incident hurt their bottom line so much, that they can't afford to take environmental considerations into account.
Everyone in an economy is always playing for their self-interests, even a not for profit company, I think if we can start getting the governments to remove the protections they've given companies and company directors in particular, the corporations will have no choice but to take environmental issues very seriously.
Thanks for the reply! :)
May 31st, 2010 at 9:39 am
Sorry for the slow reply, hadn't noticed yours.
Just because governments are involved doesn't make something not in the realm of capitalism. Governments support corporations because: surprise, it's profitable for them to do so.
June 1st, 2010 at 1:55 pm
Yep I agree, sorry, I wasn't trying to say it wasn't capitalism. It's just that it's a biased capitalism for governments to favour corporations. I think that something like a more "pure" capitalism would be better, one which corporations don't get special favours from government, such as limited liability for shareholders, and directors, etc.
I don't have any evidence that it would be better however, when it comes to economics there's so many variables it seems hard to try and find out what is "best" in a rational way.