written 14 April 2024
published 21 April 2024
All human suffering come from believing the illusion of separation in a world that is fundamentally unified. Nowhere is this clearer than how money operates.
While capitalism has always suffered from the flawed assumption of "exclusive gain", the idea of who gets included has shrunk. A century ago, a corporation was expected to serve not only the shareholders, but the suppliers, the employees, the customers, and the larger society. This is what was taught at the Harvard Business School when it first opened in 1924, whose graduates go on to shape businesses everywhere.
Over time, as the economics of accounting evolved, the quantification of profit became dominant over the more qualitative social values. Today a corporation's entire goal is defined as maximizing shareholder return. This gets more narrowed, prioritizing short term profits over everything else.
We saw an example locally when MAXXAM corporation used junk bond money to take over the Humboldt county Pacific Lumber company in 1985. For over a century, this company had been economically, and relatively environmentally, harvesting redwood, but Charles Hurwitz had convinced Houston bankers to front the money for a hostile takeover. He then raided the pension fund and doubled the rate of harvest, clearcutting as fast as possible to pay off the high interest loans. Big money "now" was more prized than sustainability. Two decades later, the company filed for bankruptcy.
ENRON corporation was formed in the mid 80's, and rapidly grew to become a significant player in energy commodities. By 2001, it was the darling of Wall Street, held up as an example for all. However, in October, 2001, it was revealed as a massive fraud, using questionable accounting techniques to make their profits look good each quarter, while hiding significant losses off book. The stock crashed with the largest bankruptcy due to fraud on record, impoverishing all their employees, and some company officers went to jail.
But fraud and bankruptcy are not the only ways companies are damaged by exclusive focus on money. Boeing corporation began building airplanes in 1917, becoming a major manufacturer during WW2, and continued to grow as domestic airlines expanded after the war, with a corporate ethic of excellence, safety, and ingenuity.
In 1997, facing increased global competition, Boeing merged with McDonnell Douglas, which had a corporate focus on Wall Street. The merged company chose stock value over excellence, ignoring that making a product safe and well produced takes time. The result was decreased worker satisfaction, and loss of production quality. The recent news of parts falling off Boeing planes has hurt the company economically.
Last year a Norfolk Southern freight train derailed in East Palestine, Ohio, creating a hazardous material fire that burned for days, forcing evacuation of the local community of 4,800 people, with unknown impact on the local environment and water supplies. This is the result of corporate decisions to make trains longer (1.75 miles in this case), while cutting safety inspectors and train staff, all to save money. This is typical of the entire railroad industry.
Exclusive focus on money has other adverse social impact as well. In 2004, a second year Harvard student, Mark Zuckerberg, created the foundation for Facebook, originally a program for comparing which college women were "hotter". This typically sophomoric, culturally misogynistic goal might fit into a college venue, but Facebook now has almost 3 billon daily users around the world, many of whom get all their news from this source. Online advertisers, and platform algorithms, keep a viewer locked into their screen time, creating a $500 billion dollar company. Combined with the explosive growth of smartphones, now almost 5 billion globally, we have seen a significant rise in online bullying, depression, and suicide among teenagers.
Closer to home, the drama around the Palace Hotel in Ukiah results from one man buying a derelict property at a discount, expecting to make a profit by doing nothing, rejecting serious bids to restore the building, while holding out for maximum return on his investment, expecting millions of dollars of tax payer funds to make that happen. Each day the building deteriorates further.
Money is only a concept, totally elastic when manipulated by those in control, able to be created out of nothing, and disconnected from reality for long periods of time. However, the experience of life is much more than that. As long as we sacrifice life for money, we all lose eventually.
