Predatory Capitalism


Nowadays one hears much about limiting the power of the bureaucracy on the initiative and effort of the entrepreneurial class.  One should remember that not all bureaucracy is bad.   One should remember the predatory nature of capitalism unregulated or moderated by bureaucracy.  For example, in the early twentieth century novel The Jungle written by Upton Sinclair , he showed how the American meat-packing plants then operated, free from all government regulation.  “Rats were nuisances, and the packers would put poisoned bread out for them; they would die, and then rats, bread, and meat would go into the hoppers together… there were things that went into sausage in comparison with which a poisoned rat was a tidbit”. This was fiction, but it was fiction that contained a lot of truth.

These leaders of industry were no  more corrupt than our current business leaders, but they allowed things like this to happen because it was cheaper and no laws prevented them from doing so.  That novel was a strong impetus to the passage in America of the first consumer protection legislation, which required federal meat inspection.  Canada eventually followed suit. Such laws hardly seem radical today. A bureaucracy was created for the protection of the public. Who today really wants to get rid of that bureaucracy?  There was a movement afoot, in the nineties to eliminate all government red tape.  To get the bureaucracy off the back of business.  But is that really such a wise thing?  Sinclair referred to the forces urging a free reign for American business as “organized and predatory greed“.  Do we once again want to allow them free reign?

Modern conservatives of the right-wing variety (not the left-conservatives that I call the real conservatives) love to criticize government bureaucrats.  They are constantly harping about how government is “on their backs” and how they just cannot carry on business efficiently under these circumstances and how the poor workers suffer as a result.  Not just them but their workers. But look what happens when the bureaucrats are too weak.  A good example is the Westray mining disaster in Nova Scotia in which 26 miners lost their lives in the explosion in 1992. I knew the lawyer who was counsel for the inquiry that followed. A supervisor in the mine admitted that he did not consider it his job to report safety violations. He said his corporate bosses told him that he should not report the safety violations and if he did not do as he was told, they would hire someone else who would do as told.

Naturally, there were workers lining up for his job.  Even though the supervisor came from a mining family and knew the risks and dangers of mining, he covered up the safety violations rather than reporting them to the safety inspectors.  It was a clear case of the deterioration of the safety mentality that can and does occur in modern corporate enterprises.

Another example was the outbreak of “mad cow” disease in the beef herds of Britain in the 1990’s. There were warnings, but business such as agri-business cannot be trusted to police themselves.  They will too often be ready to risk health and safety for their profits.  Too often it is our risk for their gain.  Not really a good deal.

We need strong checks and balances to provide for our safety.  We need strong government.  We need strong bureaucrats who won’t just cow-tow to the business interests.  We need strong business, strong unions, and strong government.  When the power of any of these is unchecked problems occur.

Yet neo-liberals  by rote are opposed to government bureaucracies.  For example in the US in the 1980’s the Reagan administration “deregulated” the airline industry.  Canada followed suit of course. This was followed, of course, by a number of airlines going broke, or being swallowed up by other airlines.  Naturally the competition that followed was ferocious.  Many cut their prices greatly, while consumers cheered (for awhile).  What many consumers did not think about however, was that this meant those airlines would have to cut their costs.  So there were cheaper meals, that tasted that like cardboard, and fewer direct flights with cramped seats and less trained staff, but that was not enough.  More costs had to be cut in order to compete.  So airlines would fly the planes longer.  Stretch out their usefulness.  But this would also stretch out their safety.

Modern multi-national corporations have incredible abilities.  If they do not like the laws or submissiveness of workers in one country they can very quickly go to another.  Recently for example, the Disney Corporation went to Haiti to manufacture garments.  This is one of the poorest countries in the world, and all they had to pay their workers was 28 cents per hour and labour laws are weak. In Haiti  workers could be forced to accept very low wages.  A garment that cost 11 cents to make could be sold for  $28.  In other words, the labourer who created it got less than one-half of one per cent.

Sometimes capitalism can be pretty darn predatory. The public needs control to regulate it. The public interest demands it.

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