Monday, May 03, 2010

Bigger profits make everyone happy? Pigs might fly

Australia’s Fairfax Media have been running a story over the weekend - Capitalism is ruining the planet, and pigs might fly – by Chris Berg is a research fellow with the Institute of Public Affairs and editor of the IPA Review.

I suspect Mr Berg might take issue with the hype created by headline, subhead and outtakes, but his own argument reeks of poorly target information to prove a dubious case. The Sunday Age ran the subhead – Less waste means bigger profits, and that should make everybody happy. Either Mr Berg or the sub-editor live in cuckoo land if they believe that.

The argument is predicated on a research pig, Pig 05049, and seeks to prove that because all of the parts of this butchered pig were utilized in various ways. The suggestion is that tracking the afterlife of one single pig can be extrapolated across the corporate world. That would suggest that industrial waste is no longer an issue, indeed does not exist at all. We all know the truth of that, business will only expend resources to the degree that they will get a maximum return.

As to the joys of profit motive, surely that exists for those who directly benefit. With the announcement of increased taxes on our mining companies we are now hearing more of this lame justification, an incredible range of claims supporting the widely discredited ‘trickle down’ theory. The mining companies are claiming responsibility for Australia’s economic strength, despite the fact that the mineral wealth rightly belongs to the country as a whole. As to any altruistic motive, the new provision was announced on Sunday and mining shares took a dive on Monday.

I would suggest that it is not bigger profits that gain wide approval, rather it is a more equitable distribution of available wealth. I’m not being ‘bolshie’ here, not claiming business should not make profits, but equally they should not make extravagant, unsupportable claims, even if they do really believe them. I am sure Mr Berg did not achieve his exalted position through ignorance, sure that he knows the difference between a credible and a fallacious argument. I would hope so anyway. This article is shallow and misleading, and I hope it’s author feels at least a little guilt.