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The Mighty Have Fallen

BP is one of the world’s biggest corporations yet several commentators are now saying it could be soon bankrupt after the debacle of the oil leak in the Gulf. How can this happen? How can just one mistake cause the whole mighty edifice to crumble? It’s simple really: the whole corporate system is totally corrupt (according to multiple meanings of the word) and it doesn’t take much for that corruption to lead to catastrophic failure.

The banks which have recently failed in the US and Europe were just as corrupt (probably more so) but they were saved by government hand outs. I’m not sure whether BP will get similar charity because the disaster and most of the financial activity is happening in the US and BP is a British based company. I suspect the Americans would be more generous if BP was American but there’s no way to know for sure.

So what do I mean when I say BP is corrupt? Well first I have got to say that I have no reason to think that it’s any more corrupt than other companies of a similar size. Basically most companies become successful by using dirty tricks, corrupt business deals, and barely legal political persuasion (effectively bribes) so it’s probably more through bad luck than anything else that it’s BP which has lost out in this particular case.

After reading through the reports on what has caused this and other disasters it seems to stem back to the one factor which above all is essential for successful business: greed. BP have systematically taken shortcuts to minimise costs on several projects. These have been allowed by the agencies who should be checking that the safeguards are in place because of political interference or pure incompetence. And many people have died as a result. But BP’s profits have steadily increased and what else matters to the corporations?

Yes, this is really another anti-capitalism, anti-free market, anti-corporate rant! I don’t apologise for that because I think corporations are responsible for most of the problems we have in the world today. I also recognise that corporations often efficiently produce the goods and services the modern world wants so the question naturally becomes: is there a reasonable alternative?

I commented in another blog entry (“Too Big to Fail?” on 2010-06-01) that I think there should be an upper limit on how big companies can get. If they can’t get too big to fail then bail outs won’t be necessary. And if there are many smaller companies instead of a few big ones then there will be more competition and less repression of new ideas.

As I have said many times before I have no trust in the free market and competition is often not the best answer. But realistically we aren’t going to abandon capitalism any time soon so the next best thing is to optimise the way it works.

Abandoning the corporate model seems like a good first step. Smaller companies would not be bribing political leaders like the big ones do now. There would be more competition amongst smaller companies. And there might be a slight reduction in efficiency but I think that would lead to greater employment and an overall increase in standards for most people. It might even lead to a reversal of the recent trend of the rich-poor gap increasing.

I think there is growing support for tough action against corporations. I have seen several articles in reasonably mainstream sources calling for severe action against BP. The proposals include:

1. Make BP pay and pay and pay (raise their federal civil liability limit to $10 billion).
2. Void all its government contracts (already being considered).
3. Kill the company (America already shuts down rogue companies).
4. Boycott BP, far and wide (a consumer rebellion against BP brands).
5. Throw the executives in jail (for involuntary manslaughter of the 11 workers).
6. Execute CEO Tony Hayward (they do it in China, so why not?).

These may seem rather extreme (and some of them are!) but the EPA was already deciding whether to declare BP ineligible for US government contracts because of four separate cases of criminal conduct in the past decade (yes, that’s criminal conduct, not just poor decisions or dodgy accounting).

The problem is that, as I said above, BP has got into this situation as much through simple bad luck as anything else. I have no doubt that many other companies take just as many shortcuts and are just as evil as BP but maybe this is an opportunity to make an example of one to act as a warning to others.

One thing seems clear to me: after the numerous corporate debacles recently I think most people can now see that the world of big business is nothing to admire and aspire to joining. Unless, that is, you are a true capitalist and death, destruction and total lack of morality is just the price you are prepared to pay for more profit.

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