Oil and Coca Cola

An oil executive compared the price of oil to the price of Coca Cola, saying that $60 dollars a barrel was ‘really not that high.’ While the analogy may be telling, it warrants the examination of some relevant differences between the two commodities. Namely, oil is near vital for today’s economy to operate: as such, it has a distinct nature from the fetishized Coca Cola, which society could do very well without. One might as well compare oil to a Starbucks latté — both comparisons are equally absurd. Our society is not fueled by high-fructose corn syrup and carbonation.

Coca Cola is priced highly simply because it is a luxury (in comparison to oil) and, simply, people will pay for it. Though both commodities are subject to the same laws of supply and demand, oil is somewhat more rigid: society is at the mercy of undemocratic backroom meetings by conglomerates like OPEC when it comes to petroleum. Oil prices are not nearly as responsive to the buying habits of the public (both by their nature and by the fact that the public has yet to greatly alter those habits).

Though Coca Cola is more expensive, it is also inconsequential in the grand scheme of things. If the price of Coca Cola had tripled in the past 6 years, likely many people would have given it up. Our society, on the other hand, does not have the luxury of renouncing oil overnight, the role of crude being so integral to our lives.

So, when the exec goes on to say that the fact people are still buying SUVs and running their air conditioners on high is a sign that people don’t care about gas prices, he should think again. The wasteful habits of the moneyed bourgeoisie are no evidence for a societal acceptance of murder at the gas pump.

I dare say that a 16 oz bottle of Coca Cola gives us more pleasure than the convenience we get from an equal amount of gasoline (about 3 miles of travel on 25 mpg, which in itself is generous).

It is altogether unfortunate that our capitalist society drags its heels in the face of Peak Oil. I agree that oil will have to remain at above $4 or $5 before people in America will change their ways. There is no Peak Coca Cola, nor is Coca Cola ruining our atmosphere. The analogy is a poor one, at best, and grossly misleading at worst.

World Development Aid

I have previously commented on the United States’ failure to contribute the requested 0.7 per cent of its GDP to the United Nations for international development. It seems the idea has run headlong into fierce opposition here in the States, and has been painted as an unnecessary and draconian ‘tax’ implemented by an authority outside the jurisdiction of a national government.

That’s true to some extent, just as it is true that judges are unelected. But there are few in government who do not, at some point, answer to an elected official. Judges in many local municipalities, for example, are elected directly. At higher levels, like at the Supreme Court, judges are nominated by the elected President, questioned by the elected legislature, and then voted on democratically by our elected representatives. Your government in action, people. Though it is true the judges may be a step or two removed from the democratic process, they ultimately are chosen by the people. Republicans thusly have no one to blame for the ‘tyranny of the judges’ except for the people.

Our representative to the United Nations, John Bolton, underwent similar rigors, for which the Democrats were criticized, when he was nominated to represent this country to the world. He was nominated by the elected President and withstood the interrogation of the elected legislature, and sent as an emissary to the world stage. The United States, with its powerful standing in the United Nations, should have the power, one would think, to prevent something like this “tax” from coming into existence. As well, this is nary a tax in the traditional sense — there have been no penalties for our repeated failure to pay, there are no jack-booted thugs coming to repossess our cars. The chest beating and shouting is nothing but a symbolic gesture against a demi-authority that has time and again proven itself impotent. The people have nothing to fear but right-wing demagoguery.

In spite of my point thus far, I find it somewhat atrocious that the government has not seen fit to donate such a scant portion of its Gross Domestic Product to international aid.

Economist Lord P. T. Bauer, said, “The argument that aid is indispensable for development runs into an inescapable dilemma. If the conditions for development other than capital are present, the capital required will either be generated locally or be available commercially from abroad to governments or to businesses. If the required conditions are not present, then aid will be ineffective and wasted.”

But I contest this statement — oftentimes what is lacking is knowledge of the vicious Zero Sum game of capitalism that the West requires for survival. Africans may very well have the land to farm, but to assert that wealth will spring forth spontaneously from natural resources — when the truth is that these people are, if productive and knowledgeable, certainly the target of robber barons and economic tyrants — is absurd. You cannot expect a person to be born into this world with Wealth of Nations ingrained in their mind and an intimate knowledge of the world’s market economy. It is very much possible — and observable today — that a wealth of resources and a dearth of only capital will not necessarily generate capital in the magical inerrant Free Market way that the Right so dearly wishes it would. The fact that sweatshops in, say, Mexico have been set up at incredible rates in recent decades has led to an influx of capital into the region, but not the development of the local populace. Arguably, it has increased the amount of poverty.

One need only look around to see that the third world, left to the West’s Free Market devices, does not benefit. The need for aid and, perhaps more so, education, remains. And the United States’ reluctance to provide aid for the basic needs and development of foreign countries belies its claim to compassion.

Too much of a good thing

http://www.mass.gov/?pageID=pressreleases&agId=Eeohhs2&prModName=dphpressrelease&prFile=pr_060829_nicotine.xml

A study conducted by the state government of Massachusetts involving data collected on cigarettes over the past several years revealed some disturbing trends. Cigarette makers are tailoring their cigarette filters to fool government benchmarking machines, for example.

As well, makers have been drastically increasing the amount of nicotine cigarettes contain, generally regarded as their most addictive ingredient. Between the years 1998 and 2004, the amount of nicotine in cigarettes surveyed increased ten percent on average.

So, while funding anti-smoking campaigns (which seems odd from a legal perspective — being fined to produce marketing campaigns that act against your very financial livelihood), cigarette makers have been attempting to cut their losses and reinvigorate their bottom line by hooking smokers all the more. Hey, it’s just capitalism.

BP Redux

Today the news comes out that BP is shutting down an Alaskan oil field because of a corroded pipeline. The field accounts for almost ten percent of America’s oil production.

I find it ironic that, in light of BP’s previously mentioned commercials that paint them as the saviors of the global climate, the truth comes out that they had let their pipeline corrode for seven years without checking it.

It is likely that BP’s bottom line will hurt from this significantly. But it is also possible that this will hurt them less than if they had inspected and repaired their pipes on a regular basis. In that sense, the inerrant motivator and capitalist Lord Profit has resulted in this situation, which is perilously close to hurting both the environment and the consumer.

In short, BP is like every other company in a barely regulated and ludicrously moneyed industry: the only thing that matters to it is the bottom line. If that means leaving its pipes unchecked for several years at a time, which is perfectly legal, or if it means forgoing research into alternative fuels because it may well not produce any immediate profits, then that’s exactly what BP will do.

That’s not Free Trade at all

http://www.cnn.com/2006/POLITICS/08/04/us.iran.sanctions/index.html?section=cnn_topstories

CNN reports that the United States has imposed sanctions against seven countries because they sold arms to Iran. That seems hypocritical in light of the US’s otherwise unflinching reverence for global Free Trade. Is it because this particular brand of Free Trade favors a political enemy?

Taking a step back, in the most Libertarian laissez-faire sense, it seems perfectly okay for the United States to voluntarily suspend deals with other countries as punishment — it is the choice of each person, or each entity, with whom to trade. The US is exercising its right to withhold trade from those countries.

Then, Free Trade is not “everyone trades with everyone no matter what,” because the US’s actions — punishing Russia, Cuba, and others for trading with whom they wanted — speak louder than those words. Remember what Kant said: an ethical code must be universalizable — it must be practicable by everyone simultaneously, without fiat or ad hoc exceptions to the rule.

Instead, we preach, “everyone should be able to choose with whom they trade.” That seems much more liberal, democratic and satisfactory. Then, I find it ironic that the WTO has been bypassing the legitimate democratic institutions of the countries that are affected by the trade deals and forcing their will upon them. Even here in the United States, the President has been given the power exclusively to negotiate trade treaties with foreign countries, despite the fact that the Constitution specifically grants Congress with that very power.

Back to the original question: is it hypocritical to impose sanctions in a world of Free Trade? I maintain that is is: that it is doublespeak to simultaneously claim that we are allowed to trade with whom we want, but that, at the drop of a hat (or a suspicious trade deal), we can refuse to trade with a fellow WTO country. In this way, the WTO almost appears as a mere stepping stone for US economic supremacy on the world stage: countries sign a treaty, agreeing to trade with us, while we may renege at any point and possibly collapse their economy because we disagree with their beliefs.

Google, Information, Capitalism, and Tango

It takes two to tango. Such is the case with Google’s operations in China. The search giant agreed to censor its search results so that they would be allowed onto the mainland of Red China.

Shame on the Chinese government for censoring the Internet. And shame on Google for complying willingly.

But can you blame Google? After all, China’s the largest — soon to be second-largest — market in the entire world. Think of all that money. Profit motivated Google’s willingness to censor itself, to restrict access to the sum of human knowledge. Google, the pride and joy of American entrepreneurship, the little guy that’s whipping Microsoft in the Internet search arena. For a second there, they were laudable for their achievements. But everyone has a price.

The giant could have just as easily refused to do business with the despotic Communists who maintain a stranglehold on the dissemination of information to the populace. But Google saw dollar signs.

FDA dictates food portions

According to CNN, the FDA released a report advising restaurants to decrease the size of the portions of their meals as a way to combat obesity.

Here we see the government, again, being rather uncapitalist in an attempt to regulate business practices: According to our old friend Adam Smith, a restaurant owner or chef will decide the portions based upon his own desire for profit. The rest is left to the Invisible Hand.

That is, a faith in capitalism would tell us that if people are eating bigger portions, it must be the best thing for the nation. As well, aren’t bigger meals and fatter bellies a sign of prosperity and wealth? They were in Middle Ages Europe.

Any regulation of meal sizes would be an infringement upon our liberties to decide how much we serve or eat, undermining the idea of old-fashioned, laissez-faire, Invisible Hand capitalism.

Why is the government stepping in? Are they acknowledging that, perhaps, laissez-faire deregulation is having a detrimental effect on the health of the populace? Makes sense to me. But habits are more effective as laws — you’ll hear that from me a lot. It would be wiser, for me, to combat the disease rather than the symptoms — a lack of education on the part of the people seems implicated in this decision. For whatever reason, people simply don’t understand, or don’t care, about the health effects of poor nutrition and overeating. People refuse to alter their habits in the face of an overwhelming trend towards obesity in the nation.

Once they understand their responsibility for their own health (if they are concerned), it will be up to them to alter their habits, not the job of the government to say how much they can eat. The government should get involved sooner down the line by increasing educational funding, not by taking food out of our mouths. Or, rather, off of our plates.

Dow Chemical Company and Capitalism

On December 3, 1984, a Union Carbide (a division of Dow Chemical Company) plant in Bhopal, India leaked 40 tons of toxic methyl isocyanate and hydrogen cyanide gas, killing three thousand people on contact and injuring as many as six-hundred thousand others. At least twelve thousand deaths have been attributed to the spill since that date.

Contamination is still present at the site today, as the company has avoided pressures to sanitize the area. Chemical levels today lie at five-hundred times the legal limit.

But this was no accident, this a case of cutting corners. Due to falling sales, staff had been laid off and safety checks had become less frequent. As well, the methyl isocyanate tank refrigeration unit was disabled to save on utility costs.

In the aftermath, the CEO of Union Carbide fled homicide hearings in India, and the United States violated its extradition treaty with India by refusing to release him to Indian authorities.

On December 3, 2004, the twentieth anniversary of the disaster, a man claiming to be a Dow representative named Jude Finisterra was interviewed by the BBC. He claimed that the company had agreed to clean up the site and compensate those harmed in the incident. Immediately afterward, Dow’s share price fell 4.2% in 23 minutes, for a loss of $2 billion in market value. Apparently, the shareholders disagreed with the morality and of compassion embodied by the admission. Forget that, they disagreed with the simple admission of responsibility.

Dow immediately released a refutation denying any affiliation with Finisterra. Within their statement, they highlighted the importance of the bottom line, in a message so cold-hearted it’s surreal:

“Most importantly of all: Dow shareholders will see NO losses, because Dow’s policy towards Bhopal HAS NOT CHANGED. Much as we at Dow may care, as human beings, about the victims of the Bhopal catastrophe, we must reiterate that Dow’s sole and unique responsibility is to its shareholders, and Dow CANNOT do anything that goes against its bottom line unless forced to by law.” (Emphasis not added.)

Thousands have been compensated in India, with about $500 each. That’s enough to pay for one year of medical care in India, when these half a million people require care for the rest of their lives.

I find it disturbing that corporations are taxed as individuals here in the United States, but are in no way held morally responsible in the same way a human being would be. For example, someone, here, is responsible. Perhaps the person who suggested shutting down the refrigeration tanks or decreasing the frequency of safety checks. Remember the importance of the bottom line, responsible for this, the biggest and most horrific industrial catastrophe of all time. And the reluctance of Dow to take responsibility and compensate those… the half million lives that have been poisoned and destroyed. Utter contempt and malice for the values of mankind, embodied by the largest chemical corporation in the world. Truly, animus in the extreme is an emergent property of international capitalism.

Human error, misjudgment, and apathy contributed to the deaths of fifteen thousand people, but no one has come to trial for this to date, some twenty-two years later.

Uncapitalist in a bad way

Because of the development of digital signals in television, the FCC is forcing all local stations — some 1,200 in the US, I believe — to switch over to broadcasting exclusively a digital signal by April 7, 2009. As of now, many stations are in transition, and continue to broadcast an analogue signal along with the digital.

My first impression was that this was very uncapitalist. In an affront to Adam Smith and his wonderful Invisible Hand, the government is forcing an entire industry to adopt a standard. When the strictly capitalist belief is to trust the industry and the greed of the individuals therein to do what’s best for everybody: Eventually, the stations that did have a digital signal would prevail because they would be sending a higher quality broadcast, or at least more options for the same quality and price. Consumers, of course, would be trusted to hop on the bandwagon and adopt the technology without a fight, and gladly fork over the cash for a new TV. And capitalism would save the day.

Instead, this measure shows an unAmerican lack of faith in capitalism — and not in the good way, not in the redistributing the wealth downwards way. Contrariwise, this measure hurts the poor by forcing the entire nation to adopt an expensive new technology from the top-down. Ninety-eight (98) percent of American homes have televisions. Seventy-six (76) percent of those have cable. So a full quarter of all television viewers rely on broadcast for their TV signal. Logically, these would be the poorer demographics.

And by forcing them to adopt a new, expensive technology within the next three years adds an additional strain. They should be expected to, instead, spend the money for a new TV on, oh, say, clothes or food. And reasonably so. In effect, the government is taking away their TV.

But! Compassionate Conservatives come to the rescue. John McCain is spearheading an effort that would give a $250 credit to poor households to buy a digital set-top converter that will convert the digital signal into an analogue signal for their analogue TVs.

For the love of God.

I was already miffed after hearing it took $2.5 million to buy 30 seconds during the last Superbowl. I was already miffed after hearing that even though every Friends star made one million dollars per episode, NBC still raked in $27 million on top of that.

How many people could twenty-seven million dollars feed? How many people could it house, clothe, and feed, for a lifetime? Some statistic came out a couple years ago about how much it cost to raise a child up to the age of 18. By that number, one episode of Friends could have clothed, housed, and fed 208 children until they were 18. Two hundred and eight children. That’s three-thousand seven-hundred forty-four years of food, clothing and shelter. Versus forty minutes of laughs (at best). There is absolutely no comparison. I am appalled.

Aren’t there better things we could be spending this money on? Let’s give poor people money for a TV. Why not food stamps or job training, for God’s sake? Teach a man to fish, why don’t you? There’s something fundamentally wrong with all of this, and if you’re not outraged, you certainly should be.