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Does the Market Regulate Bad Behaviors?

Greed Redux“Ayn Rand’s ‘philosophy’ is nearly perfect in its immorality, which makes the size of her audience all the more ominous and symptomatic as we enter a curious new phase in our society…To justify and extol human greed and egotism is to my mind, not only immoral, but evil” – Gore Vidal.

“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, and peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage. And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.” – Kurt Vonnegut, God Bless You, Mr. Rosewater.

Kurt Vonnegut wrote that phrase around 1965 and it looks like things haven’t changed much since then. A few days ago, I read an article about Dupont’s continuing use of a chemical compound despite scientific evidence indicating harmful effects; the disposal of the compound into the water system, thus contaminating the water supply; and its denial that the chemical had known bad effects. The article was a story about one lawyer fighting Dupont on its egregious environmental act.

Dupont apparently knew of the bad effects since the 1950’s and still continued to use the compound through the 60’s, 70’s and on through today. But Dupont is only Exhibit A. Exhibit B is the Volkswagen drama with software tampering to fool the environmental guys into thinking their cars met environmental standards. Exhibit C is Exxon Mobil hiding scientific evidence of the potential for global warming from carbon-based goods since the 70’s and their corresponding funding of climate deniers. Exhibit D is Turing Pharmaceuticals and Valeant Pharmaceuticals price gouging on drugs.

Some people say if you just let the market work without regulations, the market will take care of these ethical lapses. But these examples show that the market will not correct itself. Some of these companies have been unethical for decades; the market never corrected them. As a matter of fact, I’m not hearing a whole lot of outcry from the shareholders for these bad behaviors. Shareholders will not hold them to account. No, we do need regulations and cannot depend on industry to regulate itself. If companies think they can get away with it, they will try. Government regulations are the only counterpoint to these behaviors

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