Wednesday, September 23, 2015

The profit motive

... our concept of "profit" needs to expand beyond mere money. ....Profit must include responsibility for and well-being of all our citizens, our culture, and our planet, and not just more gold bars in the strong room.
 This week we have two sterling examples of the problem with profit = money definition.

Item 1:  The young CEO of an upstart drug firm has purchased an old drug, Daraprim, that is used to treat parasitic infections in HIV patients.  It costs about $1 per pill to manufacture and sold for $13.50.  But the former hedge manager has upped the price to $750 a pill overnight, calling a journalist who asked him why, a "moron". (Washington Post)

Item 2:  Under pressure from the EPA, Volkswagen has admitted that it cheated by programming its diesel cars to run differently when being screened for emissions.  Basically, under regular driving conditions, they emit 10-40x more pollutants than they are supposed to.
“It’s a new level of cynicism in the auto industry,” said Jack R. Nerad, executive market analyst at Kelley Blue Book. “We have seen honest mistakes and lapses of judgment before, and tragic things happening, but this strikes me as different. The intent from the beginning seemed to be to evade standard norms.” (NY Times)
As a third, anecdotal example:  I was driving in the Bay Area this week and noticed the pending installation of "express lanes" on I-580 not for carpools, but for those willing to pay tolls.  People with money can afford to buy their way into faster traffic.  And of course, the Bay Area abounds with people with money, so that the culture even in formerly countercultural cities like Berkeley has noticeably changed.   Money money money.

Cynicism?  You bet.  As long as we let Wall Street stock exchange prices drive our concept of profit, as long as we let money be the end-all and be-all, we will continue this slither into the horrors of the gilded age.


5 comments:

PseudoPiskie said...

I saw those fee lanes in Texas. I saw very few cars using them but I wasn't in heavy traffic.

JCF said...

"pending installation of "express lanes" on I-580 not for carpools, but for those willing to pay tolls."

*Ouch* I had not heard about these. This is legal???

* I realize that existing diamond lanes were already accessible to those w/ (expensive) electric cars. But there, at least the PRINCIPLE of reducing environmental impact (ala carpools) was being honored! Not just some d-bag in a Lamborghini (maybe the CEO of the drug company in story #1?).

Marshall Scott said...

I fear we are seeing more and more often that any measure of benefit is as individual benefit, and not as social or community benefit. As that happens, then, accountability seems individual, too; and so do responsibilities for support. We stop talking about highway taxes and start talking about "user fees," charged to trucking companies (or, on toll roads, to everyone). I think it's the same dynamic that has undermined support for public education: to see the individual benefit of education, without also claiming the benefits of an educated society.

James Pratt said...

The idea of paying to use express lanes is nothing new. I remember 40 years ago, driving from New Haven to NYC, you had the option of I-95 (Connecticut Turnpike and New England Expressway), with tolls, or the Wilbur Cross/Merritt/Hutchison Parkways, without tolls. Connecticut did away with its tolls some years ago, but New York still has a toll booth on its section of 95. About 20 years ago, when Virginia expanded the highway to Dulles Airport, they built express lanes for which a toll was charged, and local lanes which were free.

From an economic standpoint, it can make sense: those who place a higher monetary value on their time will be willing to pay to get to their destination faster; so it can be a progressive tax that can redistribute wealth (IF the tolls are used not just to fund the express lanes, or to pay profits to the companies that build and operate them, which I think may have been the case with the Dulles Toll Road, but to improve public transit and secondary roads).

That is a very big IF. In the drug case, the stated reason for the price hike was to fund the development of new drugs for rare diseases, where the expected payout from a successful new drug would not cover its R&D costs. However, given the identity of the CEO, a healthy dose of skepticism is warranted.

JCF said...

Off-topic: if giving his personal blessing to George-Wallace-in-drag is Pope Francis NOT "judging" (ala "Who am I to..."), what is he like when he DOES condemn us?

Pathetic. God bless the Episcopal Church (accept no pseudo-catholic substitutes)!