Social Policy in Ontario

Don’t call it a scandal: Volkswagen corruption is a syndrome

Posted on September 24, 2015 in Policy Context

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TheGlobeandMail.com – ROB/Commentary
Sep. 22, 2015.   Henry Mintzberg

Henry Mintzberg is the Cleghorn professor of management studies at McGill University in Montreal and author of Rebalancing Society: Radical Renewal Beyond Left, Right, and Center.

What were they thinking?

That’s the question on everyone’s mind as the Volkswagen crisis unfolds. That question makes a big assumption: that the company’s leaders were thinking about anything beyond their greed. About decency, about our environment, about their progeny.

Okay, so you will not buy a Volkswagen. A Chevrolet instead? Watch out for the ignition. Or how about a Toyota? Just duck as the airbag comes your way. Do you, by any chance, see a pattern? Have we been thinking?

In Europe, the United States, Japan and most everywhere else, something is going on. There is a level of sheer corruption that transcends the automobile industry.

How about banking in the United States and Europe? How about politics, most everywhere? Now Brazil is receiving a lot of attention, while the utter corruption of U.S. politics – private money in public elections, a level of lobbying out of control – carries merrily along.

A good deal of the corruption is criminal, and so can be prosecuted. So why don’t we prosecute corporate criminals, and not just corporate crimes? And why don’t we set the fines to indicate that corporate crime doesn’t pay?

If you wish to steal, don’t grab somebody’s iPhone; the government will throw the book at you.

Devise some financial manoeuvre – a little more clever than a Ponzi scheme – to defraud many people of much money. If you wish to commit manslaughter, don’t do it as the driver of a car; do it as the designer of the car. Executives and engineers at General Motors knew there were problems with those ignition switches, which led to multiple fatalities, yet they have walked off scot-free.

Far more insidious, however, is the legal corruption, because it is so prevalent. Goldman Sachs allegedly manipulated the market for recycled aluminum so that it could siphon off $5-billion (U.S.) by moving ingots from one warehouse to another. What were they thinking? That’s easy: $5-billion.

The company claimed to have broken no law. And that is precisely the problem: Our societies are being destroyed by this legal corruption.

University professors are in cahoots with pharmaceutical companies that think nothing of charging hundreds of thousands of dollars for life-and-death products that cost them hundreds of dollars to produce. And economists who cannot see past markets support such nonsense. Are they thinking at all? Some markets. This is the exploitation of monopolies called patents whose prices are not being regulated. And not just any old monopolies: People have to die for want of these, for the sake of obscene profiteering. What kind of a society tolerates this?

Are you seeing the pattern? It’s not a scandal; it’s a syndrome. The Volkswagen affair is just a blatant case of an accelerating trend. Expect it to get worse, because we are living in a world where predatory capitalism is triumphing.

In 1989, pundits declared that capitalism had triumphed. Wrong. Balance triumphed. The developed countries of the West were balanced back then.

Think of the United States after the Second World War – higher levels of taxation, fairer distribution of wealth, generous welfare programs – and with all that, remarkable development, political and social as well as economic. The communist states of Eastern Europe collapsed because they were utterly out of balance, with so much power concentrated in their public sectors.

It turns out the Berlin Wall fell on us: Predatory capitalism has been triumphing since 1989, throwing much of the world out of balance, on the side of private sectors. They are dominating government and much of society, with the consequences described above.

What were they thinking at Volkswagen?

Okay, so this particular company was particularly dumb. But how many others are close behind, just a bit smarter to keep out of the spotlight?

Remember the 1989 concept of “the end of history,” the widely accepted claim that human society had reached perfection, thanks to our relentless greed?

Well, watch out: Unless we get our act together, here it comes.

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Tags: economy, featured, globalization, ideology, privatization, standard of living

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