Saturday, March 11, 2006

We are the hollow men

These thoughts on reading that the UPM share price rose sharply on the news of 3600 people being laid off.

What values are inherent in capitalism? I would think thrift, efficiency, transparency, respect of property law, personal responsibility, competition. What else? I think that if a company announced that it will start using selective euthanasia as a part of its pension plan, the share prise would plummet. It would be against the law and current mores, the effect would be negative. But why is that? Largely the respect of human life in the West, regardless of its productivity and station in life, is the influence of Christianity and its secular social democtratic and social liberal successors. If we would see euthanasia as morally legitimite, it would mean a cut in costs and increased profits. The stock market would automatically respond positively. Capitalism is an economic arrangement, an effective means to maximise the return on investment: it automatically seeks increased efficiency, increased profits. This is pure arithmetic; profits can be calculated, are being calculated very objectively and accurately. Return on investment is not a gray area, it is not in itself a matter of morality and ethics. They are outside influences, imported into the market economy by the surrounding society and culture.

The servant is rapidly turning into the master. Gradually we are losing our moral bearings and more and more things will get their value purely from supply and demand. Including human beings - homo economicus has been born. In some sense this is what real communism attempted: to turn people into agents of production, and production to be the sum of all things. We are getting hollow: efficient hedonistic consumers. If we are not able to earn money for consumption, if we are not productive enough, we are worthless, bad news for the stock market. That is why it was excellent for UPM that those 3600 people will lose their jobs. Admittedly it has negative concequences for the public economy: if only it would have less obligations or if it would otherwise be able to get rid of these unproductive people and their families. Maybe we will find an efficient solution some day.


Gard E Abrahamsen said...

Transparency as a capitalistic value? Personal responsibility? I think not. By personal responsibility, one would expect a company to recall every product it found to be dangerous, such as cars that explode under certain circumstances, or drugs that kill some of the people taking it.

Instead, the capitalist will weight the probable losses from lawsuits against the cost of recalling the defect product. If the probable losses from lawsuits make a less economic impact then tha recall, then the health and safety of the consumers must take the back seat.

As for transparency? The capitalist will of course guard his "corporate secrets" well, as they are important for his success. Same goes for corporate strategies. If there was real transparency, trading with inside information would be impossible.

That being said, capitalism DOES give the right minded individual the power to shape his own future. But what that future, or "story" as Paolo Coelho will call it, is shaped, and whether it is good or bad, depens on the individual, and does not necessarily embrace the capitalistic society that enables the individual's progress.

matti said...

The all mighty markets, and markets alone, are on the driver's seat, and what ever is neccessary to achieve the maximum results is the only criteria by which corporations plan their actions. For commercial entreprises this is heaven sent for they don't have to pay for the real costs and they can just keep on concentrating on the dear old bottom line. The devastation and the countless of victims are left for the society at large to pay off. Corporations are turning into psychopatic freeriding mafia outfits with the social responsibility that of a vampire bat.

stockholm slender said...

Good points. I suppose I meant transparency in a very limited way: there has to be certain visibility to the investors, a certain openness. The personal responsibility then would be everyone's: the responsibility to survive in the jungle. I can think positive aspects to capitalism, but basically only in the context of other values, like liberalism, like enlightenment. The purer capitalism gets, the worse it gets.

Yes, I quite agree: corporations will act only according to their self-interest. Also even if it contradicts the freedom of the market: a natural state for any corporation would be monopoly, that's what they are striving for. Without a strong state, rigorous regulation and legislation, that is where capitalism would be headed, so often companies are actively undermining the forces that actually enable their functioning.