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The True Cost of Profit

We live in a system that only functions when we make more and more and more stuff so the most important thing is always to maximise profits by minimising costs

Stefan Molyneaux, a well-known capitalist libertarian, explains to WUWE that in a free-market economy, it is not the company’s role to care about poor working conditions for employees.

That is the responsibility of the consumer. Businesses, it could therefore be argued, are simply taking the system that we are supporting to its current logical conclusion – and at the moment that is human extinction.

Businesses and governments are simply driving the system we are supporting to its current logical conclusion - human extinction. We need to change.By 2048, it is predicted that we may well have fished the last fish out of our oceans, cut down the last tree that once made up our rain forests, used up the last of the oil once stored deep within our planet, and polluted virtually all of the rivers that provide our drinking water. (here) (watch video here)

We – the developed civilised industrialised world – are to blame. (here)

We need a new way to do capitalism or a new way to do economics. And if we cannot do either of these very soon, we are in serious trouble.

I created the documentary The Truth Behind Capitalism to highlight the corruption within the current economic model. It criticises the current system from the perspective of Karl Marx, and many people contacted me or commented on my video, stating that Karl Marx’s socialist ideas just don’t work, offering alternative systems to aim for instead. (here)

But my documentary concluded that, despite our difference of opinion on what the best economical solution is, the solution is to work together because, ultimately, we all want the same thing – a new, fairer, happier, more equal, equitable and sustainable system than the one we have now. (here) (here) (here)

Libertarians believe that the inequality we are experiencing today has grown not because of capitalism, but because of government involvementSo I contacted a capitalist libertarian – Stefan Molyneaux.

Politically, libertarians do not fall easily on the progressive left or the conservative right because, like the left, libertarians believe that governments are far more interested in their geo-political agendas than helping the ordinary person and solving the world’s problems, but like the conservative right, they also believe that the capitalist free-market itself is the solution.

Despite our difference of opinion on what the best economical solution is, the solution is to work together because, ultimately, we all want the same thing – a fair society

I am not an economist. I am an educator, teaching critical thinking. So who am I to say that libertarians are wrong and a true free-market without government interference wouldn’t solve our problems?

All I knew about economics is what I covered in my previous article about GDP, GNH and GPI (here); namely, that we live in a system that only functions when we make more and more and more stuff, and in order to produce more, the most important thing is always to maximise profits by minimising costs. In fact, the success of modern economies depends on it.

The fashion industry is one very clear example. In order to keep clothes prices low for the customers and profits high for the companies, production is outsourced to the poorest countries where environmental regulations are limited and labour is dirt cheap. (here)

In leather production, for example, chemicals are dumped into local water supplies to save money, and in garment factories, workers have to produce more than 100 pieces an hour for as little as $2 a day, or else lose their jobs and have no work at all. (here)

So I put this dilemma to Stefan Molyneaux; for surely a market economy as perceived by libertarians would put human and environmental needs before profit; surely in a true free market with no influence from the state at all, morality and ethics must come before continual growth on a finite planet – that goes without saying, surely?

I contacted Stefan to see if the left and the libertarians agree that human and environmental needs come first. After all, if they do, there is no reason why they couldn’t work together on creating a better world.

It was my first serious online conversation for WUWE, and I started out tired from a long work day, so I apologise that it may be rather painful to watch. But I phoned to learn, not debate, and Stefan Molyneaux, who has a very strong personality, decided to take the offensive, so sadly, we went round in circles and didn’t get to talking about solutions.

However, what Stefan did explain in his chat with me was very interesting; he explained that in a market economy, people are not worth more than the money they earn. Since businesses are in the business of paying workers to serve customers, only if the customer is willing to pay more than $2 a day for that person’s labour, will wages increase.

According to this economic philosophy, even though the fashion industry is currently the second most profitable industry in the world after oil, and it is also the second most environmentally devastating (here), when a person is struggling to survive on $2 a day, it is the worker who should make changes or the customer who should make changes, but the company is absolved from any responsibility.

As I continued on the same topic, rather doggedly determined to bring Stefan to the point when he would agree that people’s lives do matter more than profits, Stefan Molyneux helped me realise something very important.

In a free market economy, we cannot expect governments to care about us because they only care about economic growth (here), but we also cannot expect companies to care about us either.

I mentioned in a previous article here the importance of voicing our demands for a fair and just world, but I also mentioned that complaining through demonstrations, unions, protests, etc, only lets banks, governments and corporations know that we want change, and that only works if they decide to listen. (here)

Stefan Molyneaux helped me fully realise that, although we are demonstrating and demanding that governments and companies change, we are not actually changing ourselves. Businesses and governments are simply driving the system we are supporting to its current logical conclusion – human extinction. (here) (here) (here)

We can choose to stop permanent growth, environmental destruction and social injustice because the way we choose to spend or not spend our money, already affects economies all over the world.

If we all start asking questions about where our products come from, and buying or not buying accordingly, we can change the world and we can save the humans! – but we need to change.

We need to change consumers into activists.

So what do you think?

How can we buy and spend differently to force responsible behaviour from companies?

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This entry was posted on November 7, 2015 by in newspaper, posts.