Monday, 9 March 2009

Pssh Capitalists

It may be an obvious point but I find it very irritating how much time and suggested compassion the news gives to failing corporations. These corporations do not provide a public service, they do not survive on welfare funding out of taxes. They are companies designed to offer something in exchange for profit. Now, they either were overly greedy and gambled all their money away or people just don't want to buy their product anymore.

Recently, the US government bailed out the car manufacturer GM. This is an example of a capitalist organisation working under the principles of the 'free market' floundering. Again, they do not offer a service to anyone, they sell cars. People don't want their cars right now so they aren't making profit. They wanted to work under a free market because it means unregulated free-for-all i.e. 'We'll try to make money however we can, independently, we don't need to help anyone and in exchange we don't need any help from anyone'. They have failed at this and that means putting lots of jobs at risk, suddenly someone has to be accountable, so here comes the government bail-out.

In this country, the news reports lament the gradual death of the Pub. A British institution? Not so much. The NHS is a British institution. The Pub is just a shop, like any other, designed to sell you over-priced and ineffective drugs along with the general 'traditional' pub experience. So pubs aren't making profit, how can they survive? They live mostly on nostalgia and social pressure without offering many other services. The ones that will survive will be the ones that offer alternative services, the ones that act as gig venues, or the ones that are aimed at students who like to drink publicly. In a recession people become pragmatic, so the myths of 'going down the pub' or wearing 'high-status' clothing go out the window (the fashion industry is also suffering).
Make the connection between intangible 'myth' and intangible 'brand' and you'll see why the UK is going to suffer in this downturn. In the Thatcher years, many of our manufacturing and exporting companies were shut down or moved overseas. Capitalist organisations put more emphasis on 'branding', 'brand identity', 'brand image' etc. rather than the product which was secondary. Many of the products we now consume were made in sweatshops and factories overseas, this method of production is down-played as poverty and worker-abuse do not do much for one's 'brand image'.
So, with very few exports and few jobs in manufacturing or skilled trades beyond the service industry, the UK has a lot of money in intangible fields, think of the stock market bubble.

There are those who believed that capitalism was the epitome of equal opportunity. That the free market gave everyone a fair shot if you were willing to work hard (conveniently forgetting the underpaid third world workers who made the clothes on their back, also forgetting that currency is finite and to make money is to take it from someone else) but to see the flaw in any system we have to imagine its ultimate manifestation or its extreme incarnation. People existing purely for profit, organisations fuelled by growth eventually leaves no room for human compassion, no room for failure, no room for sick days, no room for anything unless it is profitable.

So where do we draw the line or, more importantly, who draws the line? In the free market there is, in theory, no one to draw the line, the government does not regulate a corporation's activity so it can technically do anything it deems to be profitable. The other force here is the consumer. A believer in the free market may have previously said that the organisations are regulated by consumer interest, they offer products and they rely on the consumers to buy them. There is truth in this, so if we follow this logic, if consumers are not interested in keeping a corporation afloat by buying its products, why should the consumer still have to bail the company out through taxes when they fail?

We can only conclude that the free market doesn't work unless its ideals are followed through. Meaning: no government regulation and no government handouts, if you fail then you fail if that's how you want to play it. But we know that wouldn't work, and we can see that it isn't working, things like pubs will suffer and no amount of mourning will ever be as important as profit. When profit is put before people, you have to expect that Sipson Village will be tarmacked over to make way for a profitable third runway you also have to expect that corporations will continue to pollute the planet undeterred while it is profitable to do so.


Captain Tasha said...

I THINK that the recession might lead to a greater belief in socialism, which would be nice, seeing as it basically shows that the free market, on it's own, doesnt work. I also think that the government bailing out the failing companies could be seen to be a socialist action - it's possible that they are giving them money not to save the corporation as a whole, but to try and save the jobs of all the people that work for it. Hence, our taxpayers' money is, to an extent, being used to fund companies that we dont necessarily want; but on another level our money is being used to help those who would otherwise be unemployed, and surely this is an important facet of socialism. Therefore, I dont really have a problem with this so long as, once the recession is over, we actually learn from it, and make sure that the companies put more effort into their products and that we dont leave the market to be completely free. YEAH

Sam Brackley said...

I wouldn't call it a socialist action, they nationalise the debt and privatise the profit (so says chris and brian eno and the postal worker's union) so the people don't do very well, except the guys at the top, and so they'll be very happy, and when it all blows over they'll go back to slagging off socialism, in fact most of the ones in america continue to bitch about socialism, I don't think bailing out stuff really shows a good example of socialism in action, it's more like a crisis in action and people don't act very rationally in and after crises. In conclusion greater democracy and more transparency are the only things that are going to make people believe in socialism, not the continuation of the status quo. PUNXXXXXXXXX

chris doveton said...

The 'suggested compassion' of news reports on failing banks, shops and the rest is understandable given that workers down the chain- that's people like us- inevitably suffer as they are laid off, and we forgive them their ignorance in failing to comprehend the true 'here today, gone tomorrow' nature of capitalism, don't we?
It is tricky trying to calculate how much we should blame the various people involved; the bankers were after all, doing exactly what many in the country cheered them on to do - make as much money as possible- "live by the sword, die by the sword" is the guiding principle when it comes to these appalling people being thrown out of their offices- the 'suits'... I would throw them out from a very high window myself but then this reaction ultimately smacks of scapegoating, in the true sense of that word. Bush,Blair and Brown stand shoulder to shoulder with the bankers, - but behind them lurk the 'majority' vote ( or an active, pernicious minority at least) in both democracies. New Labour manifesti have been carefully crafted around mainstream bourgoise opinion, a manufactured consent since the mid-90s which tried to have its cake and eat it: let a rampant global capitalist casino fund an improved NHS and Education system - ker-chiiiing!!! Everyone's a winner!!! But now the dream is over and it's time to dream another dream - anyone got any better ideas?