Predatory Capitalism

In his 1962 book, Capitalism and Freedom, Nobel Prize-winning (1976) economist Milton Friedman (1912-2006) expressed an optimistic vision of commercial exchange that emphasized the idea that both sides could win and that such exchanges were essentially civil.

The possibility of co-ordination through voluntary co-operation, rests on the elementary—yet frequently denied—proposition that both parties to an economic transaction benefit from it, provided the transaction is bi-laterally voluntary and informed.

Milton Friedman, Capitalism and Freedom, 1962 (underlined portion of quotation above was italicized by Friedman in the original)

Friedman did, however, express the caveat that this ideal relationship would only work if commercial exchanges were voluntary and both parties to the transaction were well-informed. Of course, these conditions are rarely met.

Corporations don’t want well-informed consumers. They just want to maximize sales. Advertising is a billion dollar industry whose purpose is to see that we are impulsive and ill-informed when we spend our money.

Exploitation disguised as a virtue

For anyone who has ever had her immediate circumstances exploited for commercial gain—whether it be a $7 Diet Coke at the airport or an outrageously high-interest payday loan—a world of ruthless competitors guided by nothing more than blind ambition for profit is hardly a pleasant place.

John Paul Rollert

By 1970, Friedman was proclaiming that “The social responsibility of business is to increase its profits.” This idea soon became known as the “Friedman Doctrine.” It paved the way for corporations to abandon any pretense of genuine social responsibility because they could now claim that pure profit-seeking WAS their social responsibility.

The Friedman Doctrine is false. A business has responsibilities to more than just its shareholders. It also has responsibilities to its customers, its employees, and the communities in which they do business.

If you serve all the other stakeholders well, the shareholders do fine.

Peter Georgescu

Yet corporations now regularly deceive and overcharge their customers, mistreat and underpay their employees, and pollute and blackmail the communities in which they are located. As long as their stock price is up, they consider themselves to be successful.

The rules of the game have become cancerous. They’re killing us. They’re killing the corporation. They’re helping to kill the country.

Peter Georgescu

Trickle Down

In the 1980’s, Ronald Reagan justified the increasingly upward flow of money with the absurd claim that helping the wealthy was helping everyone. He called the predatory wealthy “job creators” and promoted the crazy idea that if the government would just give huge subsidies and tax breaks to the corporations, wondrous benefits would “trickle down” to everyone else.

The mythical story was that if we all gave more of our money to the already wealthy, they would invest it for us and the resulting economic boom would more than pay back the transfer, even after taxes and inflation. It sounded too good to be true. It was.

Robert Freeman

Since then, the Republican party’s policy implementation of this specious “economic theory” vastly accelerated the upward flow of money and resources in our society to the wealthy. Of course, the promised “trickle down” benefits never came.

Ruthless competition

We now live in a world of ruthless competition that puts the lie to Friedman’s rosy vision. All of Capitalism’s worst qualities are running rampant (and largely unchecked). The quest for unlimited unregulated profit has led to lies, deceit, manipulation, propaganda, labor abuse, and, of course, power politics.

The rich are getting dramatically richer, the poor are even poorer, and the middle class is disappearing. America has degenerated from “E Pluribus Unim” (Out of Many, One) to “Take the money and run.”

The upshot of such an approach is something dismal and squalid: Vulnerability is targeted, duress exploited, and ignorance thoroughly mined. Nothing about such conduct is especially civil.

John Paul Rollert

We have been warned about this

The Book of Mormon, of course, warns us clearly about the dangers of seeking power and gain and the dangers of supporting others who do so. Yet, the lure is so strong that many Latter-day Saints not only vote against reasonable regulation and oversight of commerce, but are active participants in dishonest and exploitative business practices. If we do not repent of this behavior, we are asking for destruction.

Wherefore, O ye Gentiles, it is wisdom in God that these things should be shown unto you, that thereby ye may repent of your sins, and suffer not that these murderous combinations shall get above you, which are built up to get power and gain—and the work, yea, even the work of destruction come upon you, yea, even the sword of the justice of the Eternal God shall fall upon you, to your overthrow and destruction if ye shall suffer these things to be.

Ether 8:23

Sources
Milton Friedman, Capitalism and Freedom, The University of Chicago Press, (1962) 2002.
Milton Friedman, “A Friedman doctrine‐- The Social Responsibility Of Business Is to Increase Its Profits,” The New York Times, September 13, 1970.
John Paul Rollert, “How Sociopathic Capitalism Came to Rule the World,” The Atlantic, November 2, 2016.
Robert Freeman, “The Economy Isn’t Working, That’s Exactly The Plan.” Common Dreams, November 30, 2020.
Paul Buchheit, “How Right-Wing Conservatives Have Laid Waste to America for 50 Years,” Common Dreams, December 14, 2020.
Theodore Kini, “Is Capitalism Killing America?” Stanford Business, September 18, 1017.
Peter Georgescu, Capitalists, Arise!: End Economic Inequality, Grow the Middle Class, Heal the Nation, May, 2017.