Saturday, March 10, 2012

Not All Billionaires Lack A Conscience

From Jeremy Grantham's 4Q investment letter (as always, insightful and without rationalization, a common means of denial by the very rich):
It gets worse, for what capitalism has always had is money with which to try to buy influence. Today’s version of U.S. capitalism has died and gone to heaven on this issue. A company is now free to spend money to influence political outcomes and need tell no one, least of all its own shareholders, the technical owners. So, rich industries can exert so much political influence that they now have a dangerous degree of influence over Congress. And the issues they most influence are precisely the ones that matter most, the ones that are most important to society’s long-term well-being, indeed its very existence. Thus, taking huge benefits from Nature and damaging it in return is completely free and all attempts at government control are fought with costly lobbying and advertising. And one of the first victims in this campaign has been the truth. If scientific evidence suggests costs and limits be imposed on industry to protect the long-term environment, then science will be opposed by clever disinformation. It’s now getting to be an old and obvious story, but because their propaganda is good and despite the solidness of the data, half of the people believe the problem is a government run wild, mad to control everything. So the “industrial complex” (or parts of it) fights to increase the inherent weaknesses of capitalism. They deliberately make it ever harder to reach the very long-term decisions that will serve us all. The influence of the Tobacco companies in deliberately obscuring the science to protect profits at a huge cost to society in health costs and lives is a perfect analogy to the energy industries that work hard to confuse the public on scientific measures of damage to health and the environment.
[W]ith natural resources, capitalism wants to eat into these precious, limited resources at an accelerating rate with the subtext that everyone on the planet has the right to live like the wasteful polluting developed countries do today. You don’t have to be a PhD mathematician to work out that if the average Chinese and Indian were to catch up with (the theoretically moving target of) the average American, then our planet’s goose is cooked, along with most other things. Indeed, scientists calculate that if they caught up, we would need at least three planets to be fully sustainable. But few listen to scientists these days. So, do you know how many economic theories treat resources as if they are finite? Well, the researchers at the O.E.C.D say “none” – that no such theory exists. Economic theory either ignores this little problem or assumes you reach out and take the needed resources given the normal workings of supply and demand and you can do it indefinitely. This is a lack of common sense on a par with “rational expectations,” that elegant theory that encouraged the ludicrous faith in deregulation and the wisdom of free markets, which brought us our recent financial fiascos.
Capitalism, by ignoring the finite nature of resources and by neglecting the long-term well-being of the planet and its potentially crucial biodiversity, threatens our existence. Fifty and one-hundred-year horizons are important despite the “tyranny of the discount rate,” and grandchildren do have value. My conclusion is that capitalism does admittedly do a thousand things better than other systems: it only currently fails in two or three. Unfortunately for us all, even a single one of these failings may bring capitalism down and us with it.


Joseywalesful Daniel said...

QUESTION: Don't you just love it how after billionaires made their fortunes from Capitalism they want to cancel it for everyone else?

Anonymous said...

Josey...You are DUMB!

Anonymous said...

Josey, you are worse than dumb. You are obnoxious and dumb. You totally missed the point.

Anonymous said...

We can't dispose of capitalism. The problems we face are that giant corporations have too much control over the population, they control too many of the population's possibilities. When a 'too big to fail' bank fails it drags the possibilities of the masses with it.
We can't dispose of capitalism because then the possibilities of the masses are transferred directly to large governments. The centralization of the possibilities of the masses is the problem, moving power from big biz to big gov gets us nowhere. The solution: we need to be more vigilant. There is no reason in this society for people to not be aware of who they give their money to. If you don't like Wells Fargo lobbying Congress for immigration round-ups because Wells Fargo invests in private prisons, don't give them your money. Likewise, if people get up in arms and stop doing business with companies that rape the environment, that companies' policies will change, after all, they still want our money. The power must stay in our hands; only we can change the policies of companies, and this is something we all need to be more involved with.

Anonymous said...

Interesting point of view with some statistical facts but a horrible conclusion. This is problematic because you are essentially saying capitalism is flawed but is this an endorsement of the opposite? No the writer is not saying that but the reader can infer that there is some other mechanism that must be superior. Unfortunately, history has already shown that the alternative is horribly wicked and vile so I suggest we address the unethical politic body that exploits the people at the behest of the capitalist.

Anonymous said...

Josey your right! Al gore became an environmentalist after completing his 15,000 sq ft house in TN. Saw there was money to be made by scaring people

Anonymous said...

Josey's totally right and I agree with her!

Actually if we had REAL FREE MARKET CAPITALISM we might be able to better deal with these environmental problems!

Buffet and this billionaire made their money through the free market and then they want to close off that free market to competitors to protect their own assets!

Real capitalism would LEGALIZE HEMP which would put those oil-hogs out of business - hemp seeds are also great nutritional fuel that we could grow ourselves here in the U.S. rather than import it. Hemp also is used as paper and clothing.

Tobacco COMPANIES? Why don't we legalize drugs so people can grow their own medicine and supplements, eh? Stop taxing people for making their own decisions and hold them accountable for their health choices?

Capitalism is fully sustainable - with more people and workers, we have more people to offer solutions to environmental problems, if we have the freedom to implement new ideas. Stop subsidizing oil companies and other companies and see how green solutions pop up.

Capitalism itself won't solve the environmental crisis, but it allows the necessary freedom and opportunity for us to make our own choices as to our economic well-being.

I present this faithfully, with understanding of its limitations. Maybe billionaires, if they were really interested in charity, could create more microfinancing organizations like rather than "The Bill Gates Foundation".

Etc., God bless!

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