How and why an uncontrolled capitalist economic system has become the deadliest enemy of all that is fair, progressive and wholesome in human society – to the extent of now threatening the survival of sentient life on the planet – could be explained in a long and tedious academic treatise. But it can also be done more effectively by citing three illuminating and beguiling metaphors.
The scorpion and the frog
The first metaphor can be found in Aesop’s fable about “The Scorpion and the Frog.” It tells how a scorpion and a frog meet on the bank of a stream they both want to cross. The scorpion can’t swim, so he asks the frog to carry him over. The frog is disinclined to do so. “How can I be sure you won’t sting me?” he asks. The scorpion replies, “Because if I did, I would die too.”
That makes sense to the frog, so he lets the scorpion hop on his back and starts swimming. But in midstream the scorpion stings the frog. As they both begin to sink and drown, the frog gasps, “Why did you sting me?”
Replies the scorpion with his last breath: “Because it’s my nature.”
It’s the nature of capitalist corporations, too. They are locked into an economic system that can only be maintained by infinite growth – even though infinite growth is clearly unsustainable on a planet with finite resources. And even though the eventual ecological collapse will doom the corporations and their investors and shareholders, just as it will their employees and customers and most other people.
This inability of corporate executives, on their own, to stop their economic juggernaut from careening into the abyss, is inherent in the very nature of capitalism. Prolonged stoppages or even slowdowns of growth trigger recessions, sometimes deep depressions. Unless rescued by huge government bailouts funded by taxpayers, many corporations would founder and ultimately the whole capitalist system would collapse.
The corporations are also constrained by the terms of their charters, and by the laws that oblige them to make the maximization of profits, dividends, and share values their sole objective. That one fixation trumps everything else, including the broader public interest and even the survival of civilization as we know it.
Every corporation, to get started, has to obtain a government charter. So, theoretically, a corporation’s activities could be changed by a revision or revocation of that charter. This has happened a few times in the distant past, but never in recent times. Why not? Because corporations have amassed so much power that no government today dares to amend their charters to compel them to take the broader public interest into account. This would in any case also involve major amendments to the laws that govern corporate activities.
Consider what happened to Henry Ford in the early 20th century when he dared to defy his directors and U.S. business legislation. He unilaterally lowered the price of his Model-T cars so workers could afford to buy them. This was a brilliant stratagem that, in the following year, led to increased sales. But in the short term it reduced profits and dividends. So two of the Ford company’s directors sued him for abandoning his primary mandate to keep profits as high as possible.
The judge who heard the case found Ford guilty as charged. He awarded the Dodge brothers a multi-million-dollar settlement that they then used to set up their own car company. (Any readers driving a Dodge?)
The same enshrinement of profit maximization is built into Canada’s business legislation. In the People vs Wise (government vs. corporation) case in 2004, our Supreme Court based its decision favouring the corporation on the wording of the Canada Business Corporations Act. The relevant section of this Act states that directors and officers “owe their fiduciary obligations to the corporation, and the corporation’s interests are not to be confused with the interests of the creditors or those of any other stakeholder.”
There you have it. Any CEO or board of directors who dared to deviate from the pursuit of profits for any reason – for the benefit of their employees, customers, society as a whole, or even the planet – would be punished. Either they’d be sued as Ford was, or ousted by the major stockholders, or the drop in profits would make the company vulnerable to a hostile takeover by a less ethical competitor.
All of which makes it the nature of corporations and their CEOs to act in the same way that Aesop’s scorpion did.
Capitalism and the Titanic
The second metaphor, which has become something of a cliché, is to compare the present situation with that of the Titanic shortly before it hit the iceberg. Most of the passengers believed the big ocean liner could never be sunk, as the White Line owners assured them, just as many people today still believe the planet’s ecosphere is impervious to the worst human assault and battery.
But the captain and crew of the Titanic – and a few of the passengers – knew that any ship, even one as large and allegedly unsinkable as theirs, should reduce its speed in the North Atlantic. They knew that a failure to do so risked colliding with one of the many icebergs drifting down on the Labrador current.
But the liner’s speed was increased, not reduced. Why? Because the managing director of the White Star Line, J. Bruce Ismay, was on board. He wanted the Titanic to set a new trans-Atlantic speed record on its maiden voyage, so he gave the captain a “full-steam ahead” order.
Ismay’s motivation was profit-driven. He knew that a new record would enable White Line to take more passengers away from Cunard and other rival ocean liner firms. And he was also convinced the Titanic could never be capsized.
It was Ismay who had also ordered that the planned installation of 48 lifeboats on the Titanic be lowered to just 16, and again just to save money. “We really don’t need any lifeboats at all on an unsinkable ship that is in effect a big lifeboat itself,” he boasted.
So, in effect, the ensuing collision and its loss of so many lives resulted from a corporate obsession with maximizing profits. Ismay — who, to his everlasting shame, jumped into a lifeboat intended for women and children — could be considered the first irresponsible CEO to be “bailed out.”
The corporate cancer
The third metaphor is probably the most applicable and graphic. Both John McMurtry and I, unknown to each other, simultaneously and in separate essays, compared the behavior of corporations in the economy to the conduct of cancer cells in the human body.
McMurtry, a professor of philosophy at the University of Guelph, pointed out in his book, The Cancer Stage of Capitalism, that, in order to invade and multiply in a human body, a cancer first must overcome the body’s natural defences. A strong immune system can repel the viral invaders, but someone with an immune system weakened by poor nutrition and carcinogenous chemicals can’t stop the cancer from spreading.
The unchecked cancer doesn’t “win,” of course. This is a battle in which both sides are doomed to lose because, soon after the cancer kills its host, it also dies. But, like the scorpion, that’s a cancer’s nature, too – the only way it can function.
It’s the same with corporations. Their CEOs are also programmed to maximize profits, which means spreading and growing by any means — by cutting jobs, busting unions, evading taxes, corrupting politicians, exploiting sweatshop labour, clear-cutting forests, pillaging natural resources, increasing poverty, and — most injurious — contaminating the environment.
Freed from political regulation, free to multiply unhindered, the corporate cancer is doing what comes naturally to all Might cancers: it is growing. Its destructive impacts on families, communities, and eventually the planet itself are not taken into consideration – even though business leaders and their families will inevitably be among the victims of a global apocalypse if their cancerous conduct continues. If it is permitted to continue.
But, incredibly, business leaders and their political minions remain indifferent to the bleak future they are in the process of contriving for humankind. Fixated as they are on the next quarter’s balance sheet or the next election, they brush off the environmentalists’ warnings about climate change. “Even if global warming is real,” they rationalize, “its worst effects are still many years away. We still have plenty of time to deal with it later.”
It’s a tragic lack of foresight they share with cancer cells. Talk about famous last words!
Might I suggest an extension of the TimesUp and MeToo hashtags to be applied as well to the planet’s worst corporate and political abusers?