Many years ago one of my favorite professors, Dr. Virginia Ringer, posed this provocative question to a political philosophy class: What is the basis for our trust of the profit motive?
Professor Ringer made it clear she didn’t want to hear any well-oiled platitudes or testimonials about capitalism being the “best system ever invented.” This wasn’t to be an exercise in cheerleading. What she wanted to hear was a defense of the cornerstone of capitalism — the profit motive. So her question wasn’t why we needed it to work, or why we rooted for it to work, but rather, why should we trust it?
And given all the alarming privatization and anti-government rhetoric that has come down the pike since Ronald Reagan was president — not to mention the fact that the Democrats appear to have willingly, and without much of a fight, turned in their New Deal decoder rings — it’s a question we should be asking ourselves today.
Just as you can’t discuss the art of self-promotion without mentioning Arianna Huffington, you can’t discuss the excesses of capitalism without mentioning Big Tobacco. Professor Ringer noted that despite a preponderance of medical evidence linking smoking to lung cancer, cigarette manufacturers have done everything in their power to deny it. In her gritty, inimitable style, she said, “tobacco companies would rather see your mother die a slow, agonizing death than risk losing one nickel of profit.”
Melodramatic as that accusation was, she wasn’t wrong. In 1957, the U.S. Surgeon General announced that cigarette smoking was “one of the causative factors of lung cancer.” Yet it wasn’t until 1999, 42 years later, that the industry publicly acknowledged the fact, when Philip Morris admitted there was an “undeniable link” between smoking and lung cancer. And during those 42 years tobacco companies spent tens of millions of dollars lobbying to keep cancer warnings off cigarette packages.
Clearly, Big Tobacco is an example of the profit motive trumping every other impulse, including not caring if your product causes people to die, and doing everything in your power to keep that risk a secret.
Was using cigarette manufacturers as Exhibit A a fair depiction of capitalism? While some students agreed that it was, others strongly disagreed, arguing that this was an anomalous case of the profit motive running amok. In any event, it was government — not free enterprise — who came away looking good. After all, the feds weren’t trying to outlaw cigarettes; they were simply warning people of their health risks.
Next, we discussed “price gouging.” Simply put, anti-gouging laws prevent businesses from charging exorbitant prices for staples like milk, drinking water and baby food during emergencies or natural disasters. As much as local merchants may salivate at the prospect of tripling or quadrupling their profits by raising prices following, say, an earthquake, state governments prohibit it.
These “anti-free market” laws were enacted out of necessity and in the name of public welfare and common decency, because — to put it bluntly — the naked profit motive, in all its glory, simply can’t be trusted. The government was required to intervene on behalf of the people. And other than Attila the Hun and the U.S. Chamber of Commerce, who in their right mind could object to that?
Before class ended, Professor Ringer brought up advertising. She asked those who believed that advertisements were basically true — that they weren’t grossly misleading exaggerations or outright lies — to raise their hands. Out of about twenty students, not one person raised their hand, which turned out to be an unexpectedly comical moment, greeted with self-conscious laughter even by those who’d positioned themselves as “pro-business.”
No one is suggesting we nationalize Wal-Mart or MacDonald’s. But privatizing social security, health care, highways, public education, prisons, etc. is not only a dumb idea, it’s a dangerous one. Besides the inevitable decline in quality via bottom-line fever, we’ll be losing these public institutions forever. Make no mistake; once they are privatized — once the bankers and speculators gain control, and fee-for-service becomes a way of life — we’ll never get them back.
Say what you will about fuddy-duddy government and stodgy bureaucracies being unimaginative and inefficient. But when it comes to safeguarding the public’s interests, the government is infinitely more trustworthy than some slick-talking, flag-waving, scurvy-assed entrepreneur whose sole concern is making a buck.