Are You a Victim of Predatory Capitalism?

Trusting your employer or service provider can carry a high price.

Posted Sep 21, 2012

Though admirable as a humanist ideal, study after study has shown that in the real world socialism doesn’t work very well. Sadly, it leaves the work force insufficiently motivated to put forth its best effort—simply because it doesn’t finally “pay” to do so. So such a political or commercial system ends up stunting individual initiative, and also leaves the economy floundering.

On the other hand, capitalism—and competition—is regularly extolled as bringing out the best in us. It prods us to be more productive and remunerates our efforts accordingly. At least, capitalism at its best does that.

But in this country today, we seem to have drifted toward a mutant (cancerous?) form of capitalism, or free enterprise. One that's under-regulated, dysregulated—or both. One that's all too likely to reward those who excel not in generating useful products or fertile ideas, but rather in manipulating and deceiving the populace for personal gain. One that enables cold-blooded individualists to craftily “work” the system to their economic advantage (loopholes, anyone?). These relentless opportunists—or corporations—frequently prevent others from succeeding through hard work, diligence, and perseverance. In other words, the American Way (not to mention the American Dream) has become increasingly perverted.

So, for example, we have private equity firms—which don’t so much “run” corporations as take them over and “raid” them. (Think Gordon Gekko and someone currently seeking high—well, very high—office.) In practice, this whole “greed is good” ethic (derived in part from the highly influential novels of “pop” theorist Ayn Rand) hurts the middle class and, alas, undermines the very foundations of democracy. For here is a corrupted form of capitalism calculated not so much to produce more revenue for the corporations it takes charge of as to transfer their assets into the pockets of those who’ve taken them over. This is capitalism as vulture-like self-enrichment. Or, regrettably, capitalism without a conscience. If, for the owners to achieve their mercenary purpose, workers must be fired or have their pensions voided, or if the business itself must be driven into bankruptcy, then so be it. After all, it’s just business, right?

A second insidious form of what I see as “culpable capitalism” relates to the service industry. Consider a recent article by Brad Tuttle in Time (09/06/12) entitled: “Proof That Loyalty Is for Suckers: Best Customers Get Penalized with Higher Bills.” This piece delineates a common practice among service providers of TV and wireless, auto and home insurance, and other subscription services. In this industry it’s become almost standard to “sock it to” longer-term clients. Note how Tuttle’s piece begins—half-humorously removing all the layers of deceptive gloss from the message such service providers impart to these unwary consumers: “We appreciate your business. And as thanks for being a loyal customer all these years, we’re going to overcharge you [!].”

Obviously, raising prices for such consumers is flagrantly to take advantage of them—to “reward” their longstanding loyalty and trust by methodically exploiting them. But, once again, business is business. And it’s repeatedly been demonstrated that this underhanded practice virtually ensures providers increased profits from such non-complaining, non-comparison-shopping customers. Yet are not such practices downright predatory? Do they not betray what, in olden days, would have been a well-nigh sacred bond between provider and patron? Even in today’s amplified what-the-market-will-bear world, shouldn’t such a "seasoned" buyer/seller relationship count for something?

. . . No, not really (heavy sigh).

In the current climate of predatory capitalism—which perceives people, cynically and disrespectfully, as dehumanized objects—all that counts is beefing up the bottom line. Implicitly, the thinking seems to be that if you’ve succeeded in putting together something akin to a captive audience, it’s only fair to “milk” that audience for all it’s worth. If overcharging them (though not particularly ethical) is perfectly legal and it’s practically guaranteed that you won’t lose their business by doing so, then—for the sweet sake of profits and shareholders alike—don’t you actually have a competitive, and “ethical,” responsibility to, well, rip them off?

Such capitalistic practices have unfortunately become more and more the American Way—or, might I say, the American Wrong. It is a capitalism that clearly has lost its moral compass. And it’s hardly one we have much reason to be proud of.

© 2012 Leon F. Seltzer, Ph.D.  All Rights Reserved.

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