A Businesslike Breach of Trust

PETRONUS

Decaying Petronus Equipment in Malaysia

Misfiled Earlier

A quick scan of this week’s news headlines shows an interesting but not altogether unexpected trend: businesses getting caught.

1. Volkswagen admits to defrauding the public on a huge scale (like 11 million cars worldwide this year.) And do we really think they’re the only ones?

2. The owner and president of Peanut Corporation of America gets 28 years in jail for selling peanut butter he knew had salmonella in it. 9 people died. The plant in Georgia had a leaking roof and was infested with roaches and mice.

3. The latest way to make big money in the business world is to buy up the rights to a drug essential to the lives of patients, and then raise the price by a factor of fifty or so. That’s right. From $13.50 to $750 per pill. Then say, “Sorry, I’ll drop it to $27,” and that makes it okay. Does anybody notice what just happened?

4. Investment councilors KPMG have been helping people cheat on their taxes by using fake investment schemes. The real question is why Stephen Harper and some of his cronies were meeting with KPMG leaders at the same time as the tax department was investigating the company. I guess nobody told him that one, either.

5. And a couple of weeks ago (Sept 10) the Vancouver Sun quoted “potentially lethal lack of training, inspections and maintenance at offshore platforms in Malaysia” of Petronus, the multinational the BC government is touting as a potential major partner in LNG production.

These examples lead us to several unfortunate conclusions about how business is done these days:

Conclusion1.

You can’t trust business to do what’s good for the populace. Note, I didn’t say that you can’t trust all businesses. There are many ethical, honest businessmen out there. But there are enough bad apples that they contaminate the whole barrel. Self-policing and self-monitoring are a load of bull that business has sold to the government because it costs less. And because business interests manage to buy an election for their political apologists every once in a while.

Conclusion 2.

The medical system is a poor place for an operating system based on the law of the jungle. The main reason these pill rip-offs happen is because of the big business aspect of American medicine, and the big insurance companies who pay for these pills. As with many common crimes, there is a perception in the general public that if you aren’t hurting an individual, but are only taking a big corporation or the government for a ride, then it’s not so bad. Call me old-fashioned, but I can’t help but think that raising the price by 50 times of a medicine someone needs to stay alive is pretty bad.

Conclusion 3.

You don’t get to be a big player in international tax avoidance without breaking a bunch of tax laws. I thought that was pretty obvious to everyone except government non-regulators.

The end result of all of this? The obvious answer is more government regulation. Outfits like Petronus have a much better record where they are controlled and monitored than they do in developing and “business-friendly” countries where they are allowed more free rein. It’s a fact of human nature, the law of the jungle, and free enterprise; businesses aren’t going to regulate themselves. The market isn’t going to regulate business. The general public doesn’t know enough or have enough power to regulate business. We’re not all Ralph Nader.
So the only organization with the power to make sure the cheats don’t cheat is the government. And the free marketeers can’t blame anyone but themselves.

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