Here’s a debate where a friend, Reggie, posted a meme suggesting the immorality of the profit motive in certain contexts. I took issue with it and had a fun discussion with three gentlemen – Matt, Daniel, and Eugene – who seemed to hold the opinion that profit – either in general or in certain, wide-ranging contexts – is immoral.
As usual, names have been changed to protect the semi-innocent. If you were involved in this debate and either object to the way it is presented or would like it removed, just let me know. I’m not happy till you’re happy.
How do YOU think it went? Let me know in the comments!
Joseph E Shaw: Why must these never be operated for profit?
Reggie (who posted the meme): Not going there, Joe, but I am sure Matt will
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Daniel: Making profit on any of these creates a conflict of interest.
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Matt: So, predictably, here I am. Like a bad penny, I just turn up everywhere. Here’s my take on it, for whatever its worth.
The reality is this; if we only have $XX available to fund schools, prisons, or healthcare, it matters not whether the responsible party is government or private. The pie is only so big.
Government is not in the business of making a profit, so they spend 100% of their funds on the service. Corporations do not. Corporations have to make a profit to satisfy shareholders, and there are only two ways to do that. They can reduce costs, or they can sell something. They do both. The service provided to prisoners, students, or patients deteriorates as they cut corners. This puts lives at risk, and for students ensures educational deficits. We see that in U.S. performance against other developed nations.
The second thing corporations do is to advertise to children, increase the costs of prescription drugs, and cut back on health care for prisoners. Phone calls in prisons are also exorbitant, as well as the cost of toiletries, which prisoners have to pay. Prisoners are also forced to work for way less than the minimum wage to finance these expenses.
The biggest problem between public and private is the motivation. Companies want to make money. As much as possible. Government does not. As a general rule. The people working for either are the same. Government employees do not hail from a different life form. Their incentives do; government employees have a job to do. Private employees have a job and have to produce profit.
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Joseph E Shaw: I’m gonna quote from your post, Matt, just so I can keep myself straight. I’ve got the SKs (Shaw Kids) jumping on.my head at present, and I’m riddled with #ADHD
“Government is not in the business of making a profit, so they spend 100% of their funds on the service. Corporations do not.”
First … The question wasn’t whether we should have public or private schools. The question was is it wrong to profit off of education. Those are two different questions. Teachers profit individually off of education either way, as do administrative staff, and ancillary businesses like educational publishing and so on. If y’all’re gonna say it’s wrong to profit off of education, you have to include ALL profit from education, not just the ones you find easiest to demonize.(I said “demonize” with a smile and a wink…Im tryna be good natured, but I).
Outside of that, government might not turn a profit, but government will raid funds earmarked for other things (*cough* Social Security *cough*). Turning a 20% profit or funneling 20% of funds to pet projects unrelated to education has the same net effect.
Further, government does NOT spend 100% of its funds on educational services. I worked in public higher ed for 12 years. Multiple universities. The amount of organizational inefficiency in those places was so bad it makes you want to slap your Momma.
Also … it doesn’t have to be government vs corporations. There are lots of charter schools run by non-corporation private entities, churches, etc. Some run for-profit. Others are private non-profits. My kids attend a charter school. It’s the highest rated elementary school in the district.
One difference I’ve noticed about publics vs non-publics is the tendency to innovate with educational styles. My oldest son needs less structure and benefits from a Montessori style whereas SK2 needs someone standing behind him, smacking him in the head to keep him on task (The teachers keep him in line. They don’t smack him…I do, but they don’t).
I get what you’re saying, Michael. You think public education takes money that would have otherwise gone to profits and puts that to the benefit of the students. Right? Im not trying to belittle your point, but I’m not sure that’s the case. I think some private models can drive innovation and efficiency better than publics, and therefore make up the cost differential.
“The service provided to prisoners, students, or patients deteriorates as they cut corners.”
You think people don’t cut corners or face funding issues in governmental orgs? Are govt employees all angels in your view?
“We see that in U.S. performance against other developed nations.”
If the US Educational system is largely public, how does the lack of performance compared to the rest of the world impugn a profit and not the prevailing, non-profit, public model?
“The second thing corporations do is to advertise to children”
Something that already happens in public schools.
“The biggest problem between public and private is the motivation. Companies want to make money. As much as possible. Government does not.”
This is a restatement of the original question, not an explanation. I asked why it was wrong to profit off of these things (primarily education), and what you say here is essentially that people who want to make money off of education should not be able to do so because they want to make money off of education. That doesn’t explain anything.
What you have here is the inherent assumption, made by many who claim Socialism (which I do not.use as a pejorative, by the way) or tend toward that ideology – that profits are inherently bad and greed is not only a problem of only the free market economies, it is the driving motivation.
That’s a BIG assumption, and a false one at that.
“The people working for either are the same. Government employees do not hail from a different life form. Their incentives do; government employees have a job to do. Private employees have a job and have to produce profit.”
Yes, and it is that lack of safety net – that “provide value or lose your job” mentality – that drives efficiency and innovation. Its only when the incentive crosses thebline to Greed that things go south. But greed exists everywhere. As you said, the people working for either are the same.
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Joseph E Shaw: Hey Daniel. How is it a conflict of interest?
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Daniel: All three provide a conflict of interest. For example, why would pharmaceutical firms develop medications that cure diseases? If profit dictates what is developed, it would be in their best interest to develop new diseases and viral strains and then develop medications that leave one dependent for life. Cancer is a prime example. Pharmaceutical firms charge upwards of $1,000 per dose for chemotherapy drugs. They would be stupid to find a cure when they can milk the insurance companies and patients at these rates. The Epi-pen is another example. They charge upwards of $600 for a 20 cent dose of epinephrine, a drug that has been artificially synthesized for over 114 years. Do you remember Primatene Mist? It was the same drug but sold for $8.00 for 160+ doses. It was removed from the market because of CFC’s in the propellant. It has taken them over 7 years to get FDA approval for the non-CFC propellant version. Maybe Pfizer (maker of the epi pen)paid the FDA to slow the approval process for Amphastar (Primatene) so that they can enrich themselves with these exuberant profit margins? When profits are what is sought by these companies, anything goes. The monopolies are out of control and anybody that is against all this corporate greed and corruption is called a socialist. I disagree.
Private prisons? Now we have private corporations that are profiting from the incarceration, abuse and enslavement of the human species. You don’t see the conflict? If a company like GEO pays judges (under the table) to send more people to prison, you don’t think that it might effect their judgement? How about the police force that arrests people for petty misdemeanors and turn them into felonies. How about repeat offender laws? A driving on a suspended license charge is a misdemeanor. Have 3 within a five year period, that now becomes a felony warranting prison time. Now, let’s suspend people’s license for not paying a fine….no moving violation…just a fine…like a ticket for driving on a suspended license. Now we have essentially created a debtor’s prison which is supposed to be banned but somehow by twisting the laws we have made it happen. Now, they can sell the slave labor to Dept. of Transportation. D.O.T. will pay $10.00/hr to the private prison per man hour. Now they can profit from human slavery. Currently, the state gets the profit. They already rape the prisoners on phone calls and canteen. When profitability is the goal of incarceration, then justice can not be served. It is quite creepy, when you really think about it.
What is the goal with education? To make sure students learn or to make money? If your priority is profit, then the teaching of our children becomes an afterthought. Children that are not blessed with well to do parents have to remain uneducated. It is NOT ok that children that want an education have to be tens of thousands to hundreds of thousands in debt before they even have a job. That is fu. Especially, when other countries, like Germany, provide FREE education and post graduate studies as well as trade schools.
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Joseph E Shaw: The SKS’s are no longer jumping on my head, but they might as well be. I’mma quote you here, too, so I can keep my head on straight. I mean no disrespect by it. If I miss something, please let me know.
“Why would pharmaceutical firms develop medications that cure diseases?”
Because there are people who want medications that cure diseases.
“If profit dictates what is developed,”
The market dictates what is developed.
“it would be in their best interest to develop new diseases and viral strains and then develop medications that leave one dependent for life.”
People don’t want to buy that.
“Cancer is a prime example. Pharmaceutical firms charge upwards of $1,000 per dose for chemotherapy drugs. They would be stupid to find a cure when they can milk the insurance companies and patients at these rates.”
If you had Cancer, and one pharmaceutical company offered you a chemo pill for $1000, and another company offered you a cure for $2500, which would you purchase?
“The Epi-pen is another example. They charge upwards of $600 for a 20 cent dose of epinephrine, a drug that has been artificially synthesized for over 114 years. “
Yes. That’s what happens when one company (Mylan) has a monopoly. Monopolies are bad. It’s not profit that caused this. It’s a lack of competition and excessive regulation.
“When profits are what is sought by these companies, anything goes.”
When there is no competiton, anything goes. Profit + competition lowers prices. As new companies enter the market, watch as prices plummet.
“The monopolies are out of control”
Which monopolies?
“anybody that is against all this corporate greed and corruption is called a socialist. “
By whom?
“Private prisons? Now we have private corporations that are profiting from the incarceration, abuse and enslavement of the human species. You don’t see the conflict?”
No. Incarceration happens all the time. Abuse and enslavement are illegal. Abuse and enslavement are not a necessary result of profit. If there are companies out there enslaving and abusing prisoners, they should be shut down for breaking the law.
“If a company like GEO pays judges (under the table) to send more people to prison, you don’t think that it might effect their judgement?”
Once again…you are describing an illegal activity, not a function of profit.
“How about the police force that arrests people for petty misdemeanors and turn them into felonies.”
Another illegal activity that has nothing to do with profit.
[…you included lots more stuff that has nothing to do with profit…]
“When profitability is the goal of incarceration, then justice can not be served.”
If the government AND THE POPULACE was not already willing to turn a blind eye to these illegal miscarriages of justice, what you describe would not happen.
“What is the goal with education?”
To teach kids. Also: To teach adults. Also: To keep people from wandering around the streets all day, but mostly to teach people.
“If your priority is profit, then the teaching of our children becomes an afterthought.”
Why? Why does including profit necessarily make it the priority?
“Children that are not blessed with well to do parents have to remain uneducated.”
That’s b.s. i grew up on welfare. So did most of my friends. We are all educated.
“It is NOT ok that children that want an education have to be tens of thousands to hundreds of thousands in debt before they even have a job.”
They don’t have to be. They can pursue part time schooling. They can pursue careers that cover the cost of tuition. They are not forced to take out $100K loans for a degree in lesbian dance theory.
That’s not the result of profit. That’s the result of bad decision-making.
“Especially, when other countries, like Germany, provide FREE education and post graduate studies as well as trade schools.”
Germany provides free education? How do they pay their professors? Their administrators? Who pays to keep the lights on and heat during those cold, German winters?
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Joseph E Shaw: https://www.youtube.com/watch?v=ev_Uph_TLLo
Joseph E Shaw: https://www.youtube.com/watch?v=iPqdRqacpFk
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Daniel: I like the kid, but he isn’t sharp enough to get that old, greedy fu%$. Please, Mr. Friedman, with all due respect, do not rephrase my question. It is not the value of a human life that Ford put in their calculation but rather the fact that Ford knowingly built a defective vehicle, that will explode upon impact. The customer had no knowledge of this defect and was not told that they would have an additional one percent of risk of death to save $13.00. Gtfoh. Why didn’t Ford add the protective cap for the gas tank as an option? For $26.00. I, for one do not know a single person who would not take the $26.00 option. Hmmm…let me risk an untimely demise to save $26.00. Not happening. Why not just add it to the price and eliminate the risk? People take ideologies to extremes where they lose all their common sense.
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Joseph E Shaw: Let’s not devolve into name-calling here. The Nobe lPrize-winning Dr Friedman passed a long time ago. It seems rather disrespectful to refer to him as a greedy f*** when he is not here to defend himself,especially if you have no reason or evidence to make such crass conclusions.
The point Dr. Friedman was trying to make was not that Fordwas making a business decision, but rather that the student’s argument was based not on principle, but on a subjective, fiscal opinion about where to draw the line when it comes to the cost valuation of human life. And you’re doing the same thing.
It’s easy to say, with the benefit of hindsight, that they should have spent the extra $20 if it meant they would save lives. But Real Life™ isn’t always as easy as our theoretical ponderings. There are a lot of unknowns here. What was the statistical variance in the likelihood of death between the two scenarios? Was it that 1 out of every 200,000,000 Pintos will explode if you add this $20 part, but 1 out of every three will explode if they don’t? And did the executives say “You know what? Screw those people. I want to save $20!” Or was it more like there is a 0.049% chance someone will die with the better part and a 0.051% chance they will die without it? Was adding the part a simple process of sticking that new part into place, or would adding the part halt production so the line could be re-engineered? That’s WICKED expensive when car manufacturers have to do that. And when did they know? Hadthey already built and sold 250,000 cars when it became apparent the tiny part was a problem, or did they know from the start?
These contextual issues change our understanding of the situation somewhat because the truth is EVERY decision we make EVERY day carries with it a small amount of risk. If I decide to drive on the highway instead of the back road to get to work, there is a higher likelihood I will get into an accident. If I push out some code at work (I’m a programmer) that isn’t 100% validated and tested, there is a risk that something bad could happen in my applications further on down the line. How much of that risk am willing to accept to meet deadlines at work or get where I’m going on time? We make trade offs. Everyone does.
Even businesses make trade offs. Every time there’s an airline crash and they search through the wreckage to find the black box,someone says, “Why don’t they make the plane out of the stuff they use to make the black box?” and everyone laughs. The reality, as Dr. Friedman pointed out, is that airline and car manufacturers CAN build their cars and planes in such away that the probability of death is very minute, but if they did that, only Jeff Bezos and Mark Zuckerberg could afford to drive and fly. So they take what they believe are acceptable risks in order to cut costs the same way you might decide driving through that 25mph zone at 45 is an acceptable risk to get where you want to go on time.
If we’re going to argue – as both you and the young man from the video appear to do – that $20 clearly indicates culpability on the part of Ford,what we’re saying is the government can step in and say that $XXX is where wedraw the line for the cost of life when it comes to determining corporate culpability, which is not the kind of deciding power either of us (or eithe rthe kid or Dr. Friedman from the video) wants to give to the government or a corporation. IF, however, we decide on principle, we should say that businesses are free to make their products as risky or as safe as they like and the market is free to purchase those products, so long as they understand the risks. Dr.Friedman backs this up by saying the courts exist to determine fines and legal ramifications for companies like Ford who hide damning information from the public, and these courts are a welcome and necessary part of a free market, capitalist system.
This completely undermines everything the kid has to say.
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