Corporations and capitalism are a human invention. Basically our human inventions have been causing our civilization to not respond rationally to the depletion of resources or climate change. Does capitalism structurally lead to disasters? Under a perfect system where every contribution is fairly priced, where knowledge is perfect, where there are multiple suppliers and buyers, then capitalism works fairly well. Unfortunately there are many contributions that are not fairly priced. The unpriced factors are very important.
Many individuals, acting in their own independent and rational self-interest, will ultimately deplete a shared limited resource. This true even when it is clear that it is not in anyone's long-term interest for this to happen. This phenomenon is described as "The Tragedy of the Commons" by Garrett Hardin and first published in the journal Science in 1968.
In my U of M MBA class, we ran the fishing game that models the Tragedy of the Commons. Even though the class was focused on social responsibility, the group could not negotiate a private solution of agreed limits - the official non-government solution. Our guest instructor said that he had run the fishing game under many conditions, yet always the fisheries ended up overfished even to the point of no recovery.
The fishing game is actually a perfect model of fishing problems throughout the world:
Overfishing:
The most famous case is the collapse of the New England Cod fishery due to overfishing and adverse habitat changes. Canadian catches of Atlantic Cod peaked at 775,000 tons in 1980's and declined to 50,000 tons in 1995, a drop of 90%. Even now, the New England cod population is not recovering, but even declining. Yet, the Atlantic cod are still being fished.
Atlantic swordfish populations are also in severe decline. In the early 1800's, swordfish were caught using hand lines and rod and reel, and averaged 300-400 pounds. Now most swordfish are caught before the have a chance to spawn, at below 100 pounds. Other Atlantic billfish populations are also in severe decline.
Along the West Coast of the US, catches of rockfish or groundfish have declined by 70% during the last two decades. Bocaccio (marketed ad Red Snapper,left) catches have declined by 98% since 1969).In 2002, emergency closures of the rockfish fishery were instituted.
Overfished species also include the Bluefin tuna, Alaskan Halibut, and Salmon. According to the Food and Agriculture Organization of the United Nations, 52% of the world's fisheries are fully exploited (fished at maximum level) and 16% are over exploited, and 7% are depleted. Seven of the top ten marine species, which account for 30% of the catch, are fully exploited or over exploited.
(Fishing the Ocean)
If the Tragedy of the Commons is real, then we should be able to find many real life examples, which we can:
- Limited Natural Energy Resources are being depleted rapidly with little development of alternative sources.
- Toxins like mercury are released into the environment even to the point where it is no longer safe to eat many fish from Minnesota lakes.
- Companies use "greenwashing" which basically trashes the public trust that companies actually do do green friendly actions.
- A few rich people have been running a long term campaign trashing the government so we no longer have enough trust in government for government to intervene to protect the commons.
- The public trust in buying a safe food product can be trashed by one company with poor standards having an E. Coli incident.
- A banking system that everyone trusts to be able borrow money freely for a reasonable price crashes because of greed-based housing scam.
- Foreign knock-off goods deplete the trust and the market for the original goods.
- For years, we told people to maximize individual profit with no restrictions. They did. Now we have persuade the people who most profited by this system to contribute their power to moving to a different version of capitalism before the entire system collapses. Capitalism is a human invention that we can modify. In case like over fishing, we need to empower and use government.
There are many screaming warning signs but will the richest 1% respond before total collapse. The experience of the model fishing game and the real-life fishing grounds says no.
We have before us the whole human race intelligence and wisdom test.