Tuesday, April 03, 2007

the myth of the rational actor

Just as American foreign policy stumbles and lurches forward in pursuit of the elusive national interest—like Frankenstein, destroying most thoroughly that which it most ardently desires—so the business community systematically and unintentionally continues to undermine its own interests.

Exhibit A: The American automakers’ decision to scale back fuel-efficient projects like the electric car and gear the bulk of their operations towards selling large, fuel inefficient vehicles just before the fuel market enters the longest period of sustained high prices since the 1970s.

Exhibit B: The business community’s concerted, shadowy efforts to program political actors to obstruct progress on combating global warming, combined with a misinformation campaign to distort public perception of the established scientific consensus. This has a very large potential downside for global companies a few decades down the road.

Exhibit C: The campaign of the early airlines to consolidate market power and destroy rivals through political means (this based on my careful viewing of The Aviator), thereby stifling innovation, thwarting efficiency, and ultimately sending company after company into bankruptcy. Microsoft and the telecoms eagerly pursue this business model with little thought of the consequences.

Exhibit D: The business community’s instinctive, reactive, decades-long fight against universal health care, which every single other advanced economy has adopted, even as health care costs eat away at profits year after year.

Executives are so entrenched in the mentality that every government initiative reduces profitability, that what benefits workers necessarily costs management, and that the political machine that maintains the status quo must constantly be fed, that they fail to see obvious solutions to long-standing problems. Too often in their eyes, the most serious problems are consumer preferences that don’t align with existing products, too much competition in the marketplace, and workers who are seen as a net drag on productivity rather than the essential element of production. The business class does not understand some important ways in which the public and private spheres interact, otherwise, it would not consistently obstruct efforts to combat global climate change when it has the potential to destroy the foundations of the legal, political, and economic systems which underpin global companies.

On an individual level, it’s the woman on the subway begging for change to go shoot up again, a momentary release from the misery of existence. The corporate attorney slogging through another 80 hour week just to get to Saturday night so he can get trashed and forget about the broken family he’s left behind. The politician whose ambition and desire for approbation hollows out his soul until all he sees in the eyes of his peers and constituents is scorn.

Or, less dramatically, it’s simply the business class cutting off the nose to spite the face.

No comments: