The Flaws of Capitalism

The major flaw of capitalism, that it has no limit of even a brake on greed, I have pointed out before, but there are others. Here are a few.

It is claimed that capitalism provides the most efficient distribution of resources. That may or may not be true, but capitalism sure doesn’t do diddly-squat for the distribution of production wastes. There are a spare few examples in which capitalism did have an effect upon waste. A steel company was drawing some heat from the amount of waste they were producing. This waste stemmed from the “pickling acid” (actually hydrochloric acid) used to reduce corrosion of newly poured iron ingots. The acid “passivated” the iron but it also dissolved a bit of the iron and so “wore out” its ability to perform that task. They were dumping that liquid waste, some legally, other not so much and were drawing heat from the federal government (too much regulation, my ass). A consultant told them that their “spent” pickling acid contained a great deal of iron(III) chloride which could be sold on the market and much of the unused acid could be recycled. The sale of the iron(III) chloride and reuse of the acid reclaimed paid for the processing and, in fact, made a profit. Ta da! A capitalism success story. Unfortunately such stories are rare. Dumping of waste is the lazy and cost effective way to deal with it and has been for a very long time.

A capitalism horror story involved a battery recycling plant near Oakland, CA. This plant took car batteries, broke them down, and recycled the lead in them to make new car batteries. Sounds cool, no? Well, part of the process involved emptying the old batters of the fluid in them which was heavily acidic (sulphuric acid, stronger even than hydrochloric acid) and had a great deal of dissolved lead in it as well. So, how did they dispose of this nasty liquid? They poured out on a bare patch of ground out back behind their buildings . . . for decades. Evidence of this waste process was discovered many tens of miles (hundreds even) away as the ground water system spread it out to cover a large part of central California. We do not possess the resources or the techniques to clean this up. The company? Oh, they declared bankruptcy to avoid any liability on the part of those who did the deed.

Basically, capitalism abuses “the commons,” that is those things we hold in common: the air, our waterways, the ground and all of the systems operating therein. Capitalists pollute it, we clean it up. (We are still spending tax money to clean up Superfund sites from decades ago.)

Capitalism does a lousy job of distributing wages. As a prime example, CEOs in the 1950’s made 20-30 times what their average worker made. Today, more than a few CEO’s make 300-400X what their average worker makes. Wow, did CEOs increase productivity, knowledge, customer satisfaction, anything that much? Nope. If one could track CEO productivity (and that would be hard to do), I am sure that CEO salaries have rocketed ahead of any productivity measurement you could some up with. How is this so? It is so because the CEOs packed their own boards of trustees with friendly faces and when the issue of “CEO salary” came up they vote for “raise” every damned time. Some of these CEOs return the favor by serving on their friend’s boards so they could get unwarranted raises, too. Unwarranted salaries paid out to CEOs doesn’t end up in shareholder’s pockets, so how could this happen? Capitalism basically doesn’t care.

In this country we have come to view capitalism as a thing in itself, rather than a tool we wield. We think “it” does this and “it” does that when it is we who do everything. It is very, very (very) clear that unregulated capitalism is disastrous. So, why does one of our two major political parties campaign all of the time on a “less regulation” is better and “no regulation” is best platform? Shouldn’t we be searching for the best regulation and if not that, better regulation? Why would capitalists campaign against the thing that makes capitalism viable? Oh, it’s the greed thing again. Even rabid anti-socialist politicians will vote for corporate socialism almost every time and the reason they do? They are being paid generously, by capitalists, to do so. Apparently politics doesn’t limit greed either.