Sunday, June 16, 2019

Capitalist Responsibility and Opioids

One response to the spread of opioid addiction has been a campaign of moral condemnation against the Sackler family, the “secretive family making billions from the opioid crisis.” (Glazek, Esquire, 2017) Or, to be more precise, against the main branch of the Sackler family, inasmuch as Elizabeth, daughter of the eldest of the three brothers who founded the pharmaceutical dynasty, has publicly disassociated her branch of the family from the scandal.
Sackler-owned Purdue Pharma was the first company to launch an opioid painkiller—OxyContin in 1996—and the first to capture the dominant share of the new market, accounting for over half of prescriptions by 2001. At least 100,000 people in the United States alone have died by overdosing on its drugs. Under direct pressure from the Sacklers, Purdue Pharma’s executives continued pushing OxyContin long after they became aware of its addictive properties. They even planned to make more money by treating the addicts created by their own products. The business behavior of the Sacklers has caused an enormous amount of human suffering, not only to adults but to babies already addicted in the womb.
Ample reason, you may well think, to justify moral condemnation. And yet such condemnation flouts a long-established convention by which capitalists are not held morally or legally responsible for their business behavior. They are personally answerable for any crimes they may commit in their personal capacity, but not for acts performed in the course of “doing business,” that is, while acting as capitalists.
This convention is entrenched in the legal forms of the limited liability company and in the corporation. It finds reflection in the dominant discourse concerning wealthy “philanthropists,” including, until recently, the Sacklers, who were honored for their generous donations to worthy causes but never embarrassed by questions about how their fortunes were made. Dr. Jekyll keeps Mr. Hyde well hidden in the shadows: he does not mind entreaties to “do more good” (i.e., give more money), but dislikes demands to “do less harm” (in the process of making him money).

Marx’s Torchlight

Karl Marx caught Mr. Hyde in the powerful beam of his torchlight. He broke into the “secret abode” where the capitalist “does business” and exposed its inner workings. And yet, he too is inclined to absolve the capitalist of personal responsibility. In the 1867 preface to the first German edition of Capital, Marx says that his is the theoretical approach least liable to “make the individual responsible for relations whose creature he socially remains.” He does not exclude assigning some responsibility to individuals, but not much because people are molded by the network of social relations within which they live.
A note of moral indignation does nonetheless creep into the text of Volume I of Capital as Marx documents the callous exploitation of workers—many of them, let us recall, young children—in 19th century Britain. Marx seems to question whether the capitalist is a human being at all. In Chapter 10, on the length of the working day, he identifies the capitalist with two figures borrowed from European folklore: a “werewolf hungry for surplus-labor” and a “vampire thirsty for the living blood of labor.” The Christian culture in which Marx, despite his atheism, was immersed associated the werewolf and the vampire with evil spirits and, ultimately, with the devil. At some level, I suspect, Marx viewed the capitalist’s single-minded obsession with accumulating capital (“making money”) as a variety of demonic possession.
An argument commonly made by socialists is that capitalist firms have to be ruthless in order to maximize profit and survive competition with other firms. A firm run by soft-hearted managers would be at a great disadvantage in the competitive struggle and sooner or later would be driven out of business, either through bankruptcy or a hostile takeover. Being driven out of business would not help anyone. Nor does moral condemnation serve any useful purpose. The only solution, therefore, is to abolish the whole capitalist system and to replace production for profit with production for use under democratic control.
I have often used this argument myself. I still think there is much truth in it. However, it now seems to me somewhat exaggerated and oversimplified.

Publicly Traded Versus Privately Owned

A crucial distinction needs to be made between publicly traded companies that issue stocks and shares and companies that are privately owned—often by members of a single family—and closed to outside investors. The strongest and most urgent external pressures to maximize profits and share prices come from shareholders and the capital market, and therefore affect only public companies. Private companies are immune to such pressures. This gives them some leeway that public companies lack. For example, a traditional family-owned firm may be able to avoid laying off workers when business is slack, provided that the downturn does not last too long.
This is the reason why those entrepreneurs who pursue other goals besides profit-making (they are few, but they exist) choose to create private companies. If, later on, such a company decides to go public in order to raise additional capital, the founder gradually loses control, the “other goals” fall by the wayside, and the company ends up as a “normal” capitalist enterprise.  This is the story of Anita Roddick, founder and initial head of The Body Shop (see her book Business as Unusual: The Triumph of Anita Roddick, also pp. 51-53 in Joel Bakan, The Corporation: The Pathological Pursuit of Profit and Power).
Of course, even a private company cannot give too low a priority to profit-making if it wants to remain in business. For example, a certain level of profit is indispensable in order to maintain, repair, and replace machinery and equipment. Measures are occasionally necessary to defend market shares against the inroads of a competitor. A private company, however, can generally get by for long periods without actually maximizing profit.
This takes us back to the opioid crisis.
Highly germane to the question of the moral responsibility of the Sacklers is the fact that Purdue Pharma (makers of OcyContin) is wholly owned by members of the family. It is a private company. Its managers do not have to worry about shareholders, share price, or the stock market.
Nevertheless, the company relentlessly pursued maximum profits to the exclusion of all other considerations. When it launched OxyContin it was not responding to competitive pressures because it was the first company to market an addictive painkiller. Other publicly traded companies were then compelled to respond to competitive pressure from Purdue Pharma by marketing similar drugs of their own. The Sacklers could certainly have chosen not to act as they did. Their moral responsibility is therefore indisputable.

Corporate Culture

If there were no economic pressures forcing the Sacklers to act as they did, then what can explain their behavior? Here it is helpful to bring in the concept of “corporate culture,” or perhaps “business culture.” In an interview with Paul Jay at The Real News, Wendell Potter, a former health insurance executive turned whistleblower, is asked why he made no attempt at “change from within” before resigning. He replies that change from within is impossible because a company executive who even so much as raises a question of ethics is immediately dismissed. Such, he says, is the corporate culture.
Concepts of morality and humanity are utterly alien to this corporate culture. Very rarely is it a matter of ethically sensitive executives being reluctantly forced by external pressures to prioritize profits. Normally, the idea of doing anything other than prioritizing profits never enters their heads.
Corporate culture, however, does not exist in a vacuum. It is one of the means by which the capitalist system inculcates its values and outlook. It is still necessary to abolish the capitalist system.

Treat Them Humanely

Purdue Pharma, together with several other companies that have sold addictive painkillers, is now being sued for damages by public prosecutors at the municipal and state levels. (But not, thanks to Trump’s appointees, at the federal level.) Unfortunately, unless the dollar amounts involved are sufficiently large enough to cancel out accumulated profits, the risk of having to pay fines or compensation has no deterrent effect. The payments can just be written off as business expenses.
And even if Purdue Pharma is driven out of business, and even if all the Sacklers’ companies in various countries are driven out of business, the Sacklers themselves will surely find ways to preserve enough of their assets to live out the rest of their lives in luxury. However, if it turns out that I am wrong and they do end up destitute, I hope they are treated humanely: allotted places in a homeless shelter, permitted to apply for welfare for anyone else, and offered exorcism to free them of their diabolic possession. Stephen Shenfield How sane is a society that entrusts its vast technological capacity and productive power to tiny cabals of avaricious ‘werewolves and vampires’? How long is it going to be before we have finally had enough of their abuses? When are we going to bring the productive forces of society under the democratic control of society and put them to use in the public interest?

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