I think it's important to remember, we're talking about Texas here. The Rick Perry state, where conservatism and capitalism are as important as the bible. This is a perfect representation of what I think is wrong with republicans in the USA, and conservatives in my country up north. Conservatives and libertarians love to preach about the tremendous benefits of their version of a "free market". They love to say that Adam Smith's capitalism, much like Christianity, is overseen by the invisible hand. That supply and demand are the most relevant regulatory forces we need. I have a lot of problems with these notions.
While there may be measurable benefits from unregulated capitalist policies - and I'm not advocating that there is - there is a much more problematic hidden caveat. Conservatives claim that this so called "free market" is what will pull the world out of a global recession, they forget that lack of regulation is what put us in the recession in the first place. On top of that lack of regulation, is the bottom line need for profit, which is what led the factory in Waco to be holding over 100 times the allowed amount of ammonia, which arguably was a cause for such a violent explosion.
Alright, let me continue with another event from this week. I'm talking about the collapse of the garment factory in Bangladesh. This has killed over 300 people so far, causing a tremendous amount of pain to thousands of family members and friends. For those that don't follow the news, this week, on the 24th, an 8-story commercial building collapsed in Dhaka, the capital of Bangladesh. This was a building that housed several clothing factories that produce garments for exportation to industrialized nations such as the USA and Canada.
Basically this is a building that would not be allowed to be used in the industrialized world. It was dilapidated, just falling apart. There were major cracks on the walls, and clear signs of a safety problem, which even led the factory to briefly shut off the day before the event. Well, it would cost a very large amount of money to fix, or rebuild structures such as these around developing nations. It would cost a lot of money that they are unwilling to spend because that would mean they can't produce sub par t-shirts for a few cents. People! this is the direct result of several major flaws of what we call today capitalism.
1. Capitalism is a profit driven idea based on competition for markets. In no way I think there is a problem in this foundation, the problem with our modern view of capitalism is the importance of the bottom line, profit. Yes, of course profit should be the goal of a business, however, this should not come with lives on the price tag. Wal-Mart for instance reported a net income of 15.4 Billion dollars in 2011 with a 24.7% gross profit margin. These numbers alone are simply astounding, and I firmly believe that success stories like this are inspirational. However, when these types of profits rely on absolutely unacceptable conditions for the people behind the scenes, my view of it is certainly changes. When this 24% profit margin only exists because as consumers we accept that people in the third world are allowed to literally die to produce my cheap sweater, that I'll use gardening so I don't get my nice clothes dirty, there is a problem. I'm not at all free of guilt as consumer, but I think eventually we need to look at how to fix this problem.
2. Businesses like Wal-Mart not only exploit the third world for profit, but they also do it by removing jobs that used to be local. They move manufacturing outside of our respective countries to places like Bangladesh. Now, that alone isn't a big deal, the problem is that fair paying jobs here in Canada and the USA are being destroyed to produce poverty sustaining jobs in the third world. So we mess up our own economy, to allow developing countries to exploit their population by giving them the absolute bare minimum.
3. So who wins here? The big players! Massive profit margins definitely benefit the billionaires running these businesses. In terms of economic growth, our economies have been growing in the last few decades, but this growth has mainly been in the top 1%. The billionaires are getting better at making profit, and this is in part done through cutting fair paying jobs to give out unreasonably bad paying jobs in the third world.
Well, some may say, well that's just the dark side of capitalism, there isn't anything we can do. That's where I disagree. What needs to happen is regulation, and accountability. Right now in North America, there are tax benefits involved with importing goods from developing countries. The way the government sells us these benefits is almost as if they are convincing us they are doing good in the world. Of course allowing easier trade with Bangladesh will help their economy grow, where is the harm in that? The harm is in the fact that while this sounds good in theory, the reality is that across the ocean big corporations abuse the fact that there are desperate people out there in order to give them horrible working conditions for their profit. There is no oversight of these conditions by the big corporations for obvious reasons. The lack of oversight by Canada and the US is partly because of the important of economic influence (lobbying), and the lack of oversight by third world authorities is an attempt to maintain their country as a viable source of almost slave labor which does help their economies to some extent.
This is where I would like to challenge all my conservative and libertarian friends to tell me how this Ayn Rand capitalism is good for anyone besides the top dogs?
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