The Grand Illusion
Martin Shkreli has been arrested. The man who took over a generic drug selling for $13.50 a pill and who then raised the price to $750 a pill has been charged with fraud and other financial crimes, essentially defrauding those who had money to invest in his fraudulent and money-losing hedge funds.
Yet under our laws, he can’t possibly be charged with price-gouging those who needed Daraprim order to survive, although he even claimed that he made a “mistake” in setting the price at $750 a pill, because that was “too low” and that he was behaving altruistically because Daraprim was unprofitable at the old price. Even those with insurance coverage would have ended up paying $150 a pill. In his next move, Shkreli led an investor group to take control of KaloBios Pharmaceuticals, where Mr. Shkreli agreed to license the worldwide rights of a drug used to treat Chagas’ disease, a potentially deadly parasitic infection – but at a much higher price. And, of course, most of those infected won’t be able to pay that price, which will either result in more deaths… or in gouging the public health agencies that treat such infected individuals.
Shkreli’s acts and the way the law treats them are just another example of how U.S. justice has gone overboard in recent years in “protecting the market system” – the ultra-capitalistic market system. Now, I freely acknowledge that any workable economic system has to have a capitalistic/market basis, but when the ultra-rich pay a smaller percentage of their income in taxes than do middle-class wage earners, when basic health care becomes increasingly less affordable for tens of millions of Americans [and when the Republican response is essentially to declare that requiring healthcare insurance is the cause, rather than a symptom of an unnecessarily overpriced private health care bureaucracy], when maximizing profits at any cost, regardless of the social and environmental costs to everyone else, has become a “necessity” for executive survival in the corporate world, doesn’t it seem that a few changes in the legal, regulatory, and taxation structure might be a trace overdue?
And if those changes aren’t made…
When the laws protect only those who have money, and it doesn’t look like matters will change, it may not be all that long before those who don’t have massive wealth decide to take matters into their own hands… and bring the entire system down. Such events have occurred more than a few times before. And I’m sure that most of the Russian and French aristocracy felt that such an uprising was nothing to worry about.
You say “I freely acknowledge that any workable economic system has to have a capitalistic/market basis”.
Is there some proof of this? It may be true that we haven’t found a better system yet. But is there some reason we will never be able to do so?
The most basic reason is human nature. Theoretically, we could design an AI-moderated system that could do better… and most people would distrust it. Historically, the more top-down control of the economic system the more people have gone around such systems, with barter, black markets, and the like. Any mandated system not based on market principles that was also perceived as “fair” would likely be too complex to administer.
A purely bottom up system cannot react to large scale events such as climate change. By the time everyone agrees, humanity will have proven its unfitness to survive.
A purely top down system has not historically reacted well to small scale events. I recall watching a fascinating documentary on the Russians who had to predict how many toothbrushes would be needed in 5 years time. It was an impossible task.
Capitalism with regulation is an attempt to provide the best of both worlds. It seems pretty wasteful though: many good ideas languish because their inventors worked for the wrong manager in a corporation, or because of our current fixation on money. If we could fix all this wasted creativity, we might see some real innovation again.
I don’t disagree that we need a bottom up aspect to our economic system. However there may be other solutions. And it is debatable, in these days of extreme financialization, to what degree modern Capitalism still is bottom up.
Yes, our system needs tweaking, but how does change come about when the population is self-centered and apathetic, from the lower class to the upper? How do you prevent money from providing influence? History repeats itself because the current generation doesn’t have a connection to prior events. The majority of the US population doesn’t understand what caused those revolutions or how to prevent them. Nor are you going to change that.
I doubt most of the infected could even afford a lower price for pills, especially if those who need it live in the developing world. I actually agree with socialized medicine and wish the US would implement it. I realize that Canada and the UK systems struggle, but they do a much better job of serving the overall population. The patent system also needs reform, but law moves slowly.
Perhaps you have alluded to this before but please remind me.
From your experience of DC and that most revolutions start from within the current ruling clique, what would be one way that the USA masses could revolt and bring down the status quo?
Idaho, Arizona, or Texas legislatures might start something but the feds will squash them.
Even if the White House, House and Senate, Supreme Justices, cooperated with the Pentagon a non-Republic system change seems unlikely (they cannot cooperate now so this is not really possible).
Small nations might undergo revolution (although Syria and Libya tend to dispute that), but these days I doubt that will be the way that any large nation, even Brazil, would change its social/political system.
In historical terms, most revolutions start, not within the ruling clique, but by those members of the elite who either feel ostracized and marginalized by their peers or see political action outside accepted bounds as the only way to achieve their ends. The “outsider elites” then mobilize the dissatisfied, and if the mass of the dissatisfied is great enough, there is a revolt or even a revolution. In the cases of Hitler and Mussolini, they both worked within the general boundaries of the existing system in the beginning, minimalizing and then effectively discarding it as they gained power. There’s certainly no reason why a similar process couldn’t occur here in the U.S. All it takes is enough fear and dissatisfaction. Begin with a politician who is successful at tapping the fears and anxieties of those who feel disenfranchised in one way or another. Develop massive support for legislation that allows the executive greater and greater real and direct power… and the process is well underway. If the movement is swift enough, the Supreme Court couldn’t get into the act quickly enough before the executive simply interned or imprisoned the court for impeding the will of the people.
It sounds like you’re describing the plot of Star Wars: Revenge of the Sith.
I’ve actually never seen or read Revenge of the Sith.
Or perhaps the screenwriters for Revenge of the Sith were simply drawing on the ample supply of historical examples, ranging from the previously-mentioned rise to power by fascist parties in the 1920s and 1930s to the dreary pattern of freely-elected leaders of post-independence countries in Africa devolving into corruption and/or despotism, a process that appears to be repeating in modern South Africa and Turkey. Burke’s aphorism that “All power tends to corrupt and absolute power corrupts absolutely” has never been more true.