Tuesday, July 10, 2012

Flaws of the free market, pt. 2.

In my last post about free market ideals, I pointed out that without the american military protecting globalized shipping interests, most large companies that exist today wouldn't be nearly as profitable. Most free market proponents don't take into account that business relies on infrastructure that is paid for with tax dollars. From streets and highways or sewer and water systems to early education for what will become its employees, no business is capable of existing in a vacuum. So why does business put so much time and effort into cutting its own throat by shirking its fair share of taxes? 

The corporate ethos of quarterly profits is a big part of the problem. If you only have to act for the benefit of short term interests, thinking long term is impossible. This is strikingly apparent in the extractive industries like mining and oil exploration. The economic interests of resource exploitation don't add up when you consider the environmental impacts often associated with them. The hard won lessons of the past; like the super fund site in Idaho's Silver Valley that still to this day contaminates an important aquifer system despite billion dollar clean up efforts, seem completely lost to modern oil and mineral exploration companies. 

We all pay for massive clean up efforts, massive scale infrastructure, foreign and domestic security, and a host of other interconnected systems. Many of these system disproportionately benefit many big business models, like social security (decreasing the dependence of labor forces on retirement benefits) and the aforementioned eleven carrier groups that protect shipping interests. So how does the corporate sector justify the efforts to reduce their tax burden? Are they blind to their place in the system? Again this falls to the "kick the can down the road" short sighted mentality of corporate ethos. 

Sustainability needs to become the new metric of success. Instead of asking if a company will turn a profit next quarter when investing money, people need to start asking how many years can the company stay in business with its current model. Longer term investment strategies need to become the norm with short term profit motivation maligned as dangerous for our society and environment. The concepts of; "disposable", "single use", "designed obsolesce", and other purely economically driven models are antithetical to patriotism. Investing in any company who still clings to such outdated modalities or the necessarily short sighted ideals of free market economics is out right un-american. 

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