Capitalism is one of the great utopian systems, based on difficult moral commands: free exchange, with no coercion, and respct for individual rights and individual property. Consider what it says should happen when one needs to hire people to do a a difficult, dangerous job, such as working a sixteen-hour shift in a factory casting iron pipes from molten metal. The capitalist employer would offer a contract which completely compensated the employee for the disutility of taking such a job. Suppose, for instance, that there is some substantial chance that the employee would get sucked into a piece of machinery and spend three hours screaming for help before anyone could hear him over the cacophony, while the machine sanded off his arm. The employer then offer a benefit so valuable that the employee is indifferent between keeping his arm and getting the benefit. There are many ways to design such a contract, depending on the desires of the parties, but under capitalism every single one of them is right, provided they both agree to it, and under every single one, employees wouldn't mind getting their arm sanded off in order to have that benefit, even after the fact. From the other side, employers could reduce the amputation benefits they must offer by making their factories safer, and so lowering the probability of amputations. They would spend money on workplace safety, until each extra dollar for safety reduced the benefits they had to offer by just a dollar. Nobody could squeeze out more profits by neglecting the safety of their workers.
In real life, of course, we have companies which make a few billion dollars a year by killing the people who work in their pipe factories (1, 2, 3).
The really appalling thing is that other companies in the same industry are just as profitable, and immensely more decent. McWane isn't being driven to kill people by implacable market forces: they're just too vicious and stupid to make money any other way. Human beings may not be good enough for socialism, but we're not smart enough for capitalism, either.
Posted at January 29, 2003 12:14 | permanent link