Thoughts on Ethical Capitalism October 22, 2015 cliffski Heres an unusual post from me. Warning: politics ahead… I am starting to worry about just how mad some of the wealthy elite in society have become. Maybe as a geek, I am slightly more attracted to rationality than most, and I certainly agonize insanely over every decision I make regarding spending my own money. Maybe I take it too seriously, or have too much time to think about implications, and over-analyze peoples purchasing decisions… But here comes a bit of a rant. Some, and I have to stress with enormous underlining and boldness here to say SOME of the super-rich are acting like dicks on an unprecedented level. I think we can sum it up with stuff like this: That’s a Chanel “Diamond Forever” Handbag and it can be yours for just $261,000. A bargain! This, to me is partly the sign of the end of times. Now generally speaking, I am one to say that if you work hard, take risks, have talents and abilities, and you leverage all that to make a lot of money, then good luck to you. Thats awesome. (I am *much less* of a fan of people who are simply handed a bucket of cash by their parents…but thats another rant…). People who know me well, would not describe as a socialist, or a supporter of Jeremy Corbyn. I am not someone who supports what is sometimes called the politics of envy, and I am not someone who feels that my life is worse because me neighbor earns more than me. I have even read a few chapters of an Ayn Rand book. (in my defense, I’ve also read the communist manifesto, I try to keep my mind as open as possible). I say all of this not to make the internet hate me, but to give the rest of this blog post some context… If you have a spare $261,000, and the ONLY use for it you can imagine is to buy a handbag that frankly, looks like its $19.95 from some high-street store, then you have lost all sense of perspective. You have lost all touch with reality, and you need to come back down to earth as soon as possible. You clearly have NO IDEA what that amount of money means to people who are worse off than you, and you need to think about what the hell you are doing. I think earning money is great, but money is not just a magic ticket that lets you buy cool stuff, I think its much more important than that. How you spend you money makes a difference. When you are on average income, there is little ‘discretionary spending’ and thus you have little influence in the marketplace, but as your income rises your ‘consumer & economic power’ rises along with it. To quote a common phrase ‘with great power comes great responsibility’. or a more interesting quote, from an Iain M Banks book: “Money is power, Money is influence, Money is effect”. I’ve been reading a book by Henry Ford, and he seemed to believe this too, and saw the purpose of business was to maximize the efficiency of production so that the benefits of technological progress could be brought to the common man. In his world, earning profit from a business was not the objective, this was merely the system by which the business was able to re-invest and further drive down the price of its products for the benefit of all. A worthy attitude, in my opinion, and one that has been lost. Another businessman I’ve read books by is Warren Buffet, who always asserts that if a business has no idea what to do with its surplus cash, it should give it back to its investors by means of dividends. In other words, companies hoarding cash and just sitting on it are being dicks. And the same is true with people. Apple currently has cash reserves of $203 billion. They don’t know what to invest it in (otherwise they would be spending it), and they weirdly refuse to pay it out as dividends, and even more annoyingly, they want to keep it in tax havens to avoid paying tax. This infuriates me not only as a taxpayer and citizen, but as a ‘fellow corporate citizen’. To be exceedingly British about it, this strikes me as ‘impolite’. Too many big businesses seem to be managed these days by people who act like extremely immature individuals. Regardless of age, they seem to be competing for the sake of it, wanting to ‘win’ by having the biggest profits and biggest market share or market capitalization. They may even compete on who has the biggest yacht, or salary. Frankly, I don’t care, its fine, if thats what drives people who are ultra-successful to keep working, then so be it, but they have forgotten the responsibilities of controlling such vast wealth, and on a tens-of-billions of dollars level, they are behaving as madly as the people buying $261,000 handbags. Now maybe I am a huge hypocrite, as I recently ordered a geeky sports-car (lets not pretend it isn’t one) that cost a relatively big pile of cash. Maybe that hunger for new cool glitzy stuff just never goes away, and I’ll read this in ten years time in my gold plated office and laugh at my innocence. I sincerely hope not. The thing is, I’m not suggesting that the rich should be taxed more (I don’t think they should, personally, although I understand the arguments in favor), nor do I think companies should be taxed more. Obviously I think tax avoidance should be made harder, but much more importantly than this (and in fact, I suspect HUGELY more effectively), we need to move as a society to a situation where people are more lauded for their accomplishments that their possessions or bank balance. Steve Jobs is massively lauded for creating a rich, powerful company, but we hear less about what Bill Gates did with his money (some incredibly good things, as it turns out). Politicians need to praise and support companies that act like decent corporate citizens, and we need more people starting businesses who have a heart and a soul as well as a desperate tiger-like desire to kill the opposition. It also strikes me as just ‘bad business’. We all know a few things about apple: They make very cool phones and tablets, and they invented the ipod, and they are very hip, and a big company that makes lots of money. They are famous also for avoiding taxes, and making all their actual products in china in factories plagued by horror stories and suicides. How much would it cost to fix the last sentence there? A billion dollars? I doubt it. Lets go crazy and say ten billion dollars. Or roughly 5% of the current available cash… It would be different in the company was barely making a profit, but come on… I could never run a business that way. It just feels the wrong way to do it. How the hell did we get to this point? (and lets forget, its not just apple, such practices are commonplace).