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Let them eat cake!

A recent report published by Oxfam has highlighted that it is the world’s poor who will suffer most as Climate Change progresses.  This group hasn’t been top of the developed world’s agenda during the financial crisis and as austerity measures are introduced the moves to reduce Climate Change have slowed down or even stalled.

Politicians (particularly in the US and Australia it seems) don’t want to do anything that might affect the jobs and lifestyle of their voter base.  Whilst resistance to a shift towards a low carbon economy entrenches itself in typical political finger pointing, the predicament of the world’s poor worsens daily.

True, the developed nations throw out a little aid now and then, but it never seems quite enough to strengthen the most needy countries, only just enough to keep some people alive and make for good TV and political PR.  If there is so much desire to protect the capitalist model then genuine capitalism should be allowed to flourish within a socially responsible legal framework.  By this I mean that if businesses in developing countries are negatively impacting on the lives of those in developing countries, then they should be made to pay – an extension of the ‘polluter pays’ principle.  In the case of Climate Change, if a company’s activities are contributing to Climate Change, then there should be a price set to ensure that enough money is transferred, from corporate profits, to the people of developed countries who are most impacted.  Those who have little or no infrastructure or centralised social protection should be supported by the companies who have made their lives worse.

Don’t get me wrong, I am not making an anti-capitalism statement here; far from it, I am an advocate of capitalism, but what we need is a new form of capitalism – social capitalism.  Shareholders should personally be held accountable for the activities of the companies in which they invest.  If we assume that company directors act in the interest of shareholders, then they operate in a moral vacuum; the shareholders are the ones who guide the directors of the company and can give the Romanesque thumbs up or thumbs down to the way in which a company impacts on the lives of people, of animals and the impact on our collective environment.

If the shareholders were ‘taxed’ on their dividends and growth from their investments, to provide funds to assist those who are ‘hurt’ by the profits, then we might find a universal shift to improving corporate responsibility.  Almost overnight the directors of companies would be instructed by the owners of the company, the shareholders, to improve their social and environmental impact.  Those companies with the lowest impact would be rated higher than those with the worst; this is something the capitalist model would do very well.  A higher rating would give a higher share price and therefore constitute a ‘better’ investment.  In this case, unlike the current model, being ‘better’ doesn’t just mean for shareholders, but for the employees and all stakeholders and those impacted by the activities of companies.  The pursuit of profit would still be the goal, but the true costs of corporate activity would be reflected in the share price.

At the moment, the share price of companies doesn’t seem to factor in the blood and environmental destruction costs of their activities.  Some shareholders might make a donation to charity to help ‘those poor people over there’ and all of us see a tiny proportion of our taxes being used for Aid programmes, but this is nowhere near the true cost of the impact of our current and highly distorted system.

One final note, and I am sorry it has to be a sad one.  Whilst reports like the one from Oxfam are issued and Climate Change impacts on the very existence of so many millions, there are commodity speculators who are making money out of second-guessing the price movements of the most staple foods.  Maybe we should start the process of change with this particular group of individuals. Does anyone have any suggestions about what we might do with them?


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