• Richard

The Free Market is Not Coming to the Rescue

This blind faith in the free market to solve all of your ills if left undisturbed must come to an end - before it's too late. I am not overstating the matter when I say that the unfettered free market will be the death of civilisation as we know it. The root cause of most of the environmental problems we face today is the market doing what it does: extracting profit by any and all means possible. Side-effects are considered "externalities" and irrelevant; the clean-up, damage or degradation of natural systems is left for society at large to bear, to the extent to which government regulation is ineffective or non-existent. Meanwhile industry lobbyists work hard to spread the fallacious notion that regulation equals unnecessary red tape and hinders "job creation". And thus the wheel of profit spins.

Not to belabour the point, but let's review some of the worst environmental problems we face. Reflect on how the profit motive is front and centre throughout:

  • Deforestation

  • Top soil degradation

  • Climate change

  • Overfishing

  • Factory farming / Animals slaughter without pre-stunning / Live animal export

  • Habitat destruction / Loss of biodiversity

  • Biomagnification / Micro-plastics build-up

  • Planned obsolescence / difficult-to-recycle products

And the list goes on and on. It appears the Invisible Hand of the Market (a term coined by Adam Smith) is giving us that care about the long term a collective middle finger.


That is not to say, that the market doesn't have it's role to play. It has unquestionably lifted many people out of poverty (while enriching the 1% disproportionately, it should be noted), and we need its innovations to not only improve our quality of life but to come up with the products and services of the future that will lead us to sustainability. This cannot and will not happen, however, without the appropriate incentive and disincentive structure as set up (and strictly enforced) by government. For all its faults, effective government is where we all come together and decide that, for example, certain rights are inalienable, and that the common good takes precedence over the individual, in particular domains, over the corporate right to pursue the accumulation of treasure.

We need government. It is naïve (or purposefully ignorant) in the extreme to maintain that government needs to "get out of the way". I submit the following observations:

  • Private enterprise will only invest and innovate insofar as profit can be foreseen - now or on the horizon. Certain investments with a view to social benefits at some point can only be made by government.

  • Well-meaning corporate leaders nevertheless have a fiduciary responsibility. When push comes to shove, the imperative to create shareholder value trumps all. Every dollar that can be made must be made.

  • Corporate Social Responsibility, in practice, is important for companies only insofar it protects its reputation and community standing for underpinning profit. It has no intrinsic.

  • Flowing on from the previous point, perception is reality. A case in point - greenwashing. In an overwhelming number of cases, it is more important for a company to be seen to be green than actually incorporating such measures in practice. The bottom line must be protected.

Arguably, this construct the we created - the corporation - is entirely devoid of morality.


In closing we'll review one particularly callous example. As some of our readers may be aware, BP along with other oil companies are seeking to exploit oil fields discovered in the Great Australian Bight. The proposed offshore deep-sea drilling would entail an unacceptable risk of uncontained spill, potentially damaging precious ecosystems along most of the southern coast of Australia. Some models indicate effects worse than those experienced as a result of the BP Deepwater Horizon disaster in the Gulf of Mexico in 2010 (Caused, in part, by a lack of government oversight). You'd think the company would learn from such a terrible disaster for ecosystems and livelihoods alike. If not from and ethical standpoint then surely because the "market" will demand a real change in behaviour... right?


Not a chance.


An oil spill in the Great Australian Bight would provide a "welcomed boost" to local economies, BP said in a 2016 report released under Freedom of Information laws. (Australian Broadcasting Corporation, 2018)

Further:

"Examples include stating that impacts of spill response strategies may be offset by the use of vessels from the local fishing fleet … and stating that "in most instances, the increased activity associated with clean up operations will be a welcome boost to [local] economies." (Australian Broadcasting Corporation, 2018)
Such a cruel attitude beggars belief. Only a profit-making machine could think and act this way; one programmed to enrich shareholders at any cost, and one unshackled by society's quasi-worship of the free market.

We have to stop the madness, before it's too late.

To take an excerpt from Mario Savio's famous speech in the context of the Counterculture (anti-establishment) Movement:

... There's a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can't take part! You can't even passively take part! And you've got to put your bodies upon the gears and upon the wheels…upon the levers, upon all the apparatus, and you've got to make it stop! ...
Mario Savio, December 2, 1964 (Rosenfeld, 2012)
We must work together to constrain the machine for our precious planet.

References

Australian Broadcasting Corporation (Hancock, S. 2018). "BP document says an oil spill would be a 'welcomed boost' to local communities". Accessed: 8 April 2018. http://mobile.abc.net.au/news/2018-04-06/oil-spill-in-great-australian-bight-would-be-welcome-bp-said/9628338


Rosenfeld, Seth (2012). "Subversives: The FBI's War on Student Radicals, and Reagan's Rise to Power." London: Macmillan.

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