How Capitalism Turned America Soviet

An easy-to-grasp history of insulin, through which Umair Haque compares the lies "fairy tales" of capitalism to the decline into poverty in Soviet Russia. I recommend reading the entire compelling article. He gave me a new appreciation of the inherent evil of unregulated corporate capitalism.

In 1971, a vial of insulin cost $2.  Today, it costs somewhere between $2–300. Do you know how much it costs to make one? Maybe $5, if that. That’s a stunning, crazy-making increase .

... companies  Instead, they began to make “improved” formulas, precisely so they ...

... some diabetics complain that natural, not synthetic, insulin is the best they have had — the problem is that they can’t get it anymore, because it is not “...— which is an inaccurate way to say that it is not as profitable as the “improved” varieties. Every time that a patent is about to expire, the drug companies “improve” insulin again, patent the new formula, stop producing the old one, and hike up the price. Bang! Insulin skyrockets by two orders of magnitude in a few decades.

... American economists... assume that capitalism is like a fairy tale — left to its own devices, markets will match supply and demand through prices, which nobody plans. 

Capitalism is made of corporations, and corporations do central planning, ... The difference is that unlike, say the NHS, or any kind of social institutions, corporations have precisely zero interest in planning for the public interest — they are only planning for their own private interest, by any means available to them.

...they made a plan — a clever and cunning one — to boost their profits, by building a perpetual system of monopolies. 

More “competition” and “innovation” didn’t yield lower prices — it yielded higher prices, year after year. New forms of insulin never got cheaper. All those new products, competing on the market, never lowered the price one penny. So here is the third part of the capitalist fairy tale: it says that competition and innovation will force capitalist to sell products just above marginal cost. But in the real world, those forces can be easily harnessed to maximize profits, too,...

... only corporations had the capital and labour to produce insulin [on] a large scale — and they turned that advantage into a system of monopolies which has lasted for over a century, but only yielded lower and lower quality insulin, at skyrocketing, eye-watering prices.

Thanks to capitalism allowed to do what capitalism does, the logical culmination isn’t mass prosperity and abundance, but a new kind of poverty, in which people ration things which are forever in shortage, but don’t need to be. People are charged crazy-making, absurd, predatory prices for the basics of life — healthcare, education, food, energy, finance, housing — all of which could easily be provided in affordable plenitude, but under capitalism, can’t and won’t be.

Guess where else life ended up this way? The Soviet Union. The average person began to live like a person in a much poorer country — while those who controlled the monopolies grew unimaginably wealthy. Rationing, poverty, downward mobility. Frustration, resentment, rage. Progress stalled. Society broke.

When Haque says "people ration things which are forever in shortage, but don’t need to be" he means "unregulated corporations ration things which are forever in shortage, but don’t need to be".

At the end Haque wished for a new kind of institution, government controlled, that sounds a lot like socialism. I too have hope that a new kind of corporation can help to solve the crisis, one subject to worker control, strict public good objectives, and periodic review.

...organization which will supply insulin to the world. It won’t maximize profits. It will just break even. We won’t own it — it will be owned by every Canadian. And what it will really maximize is a supply of affordable, plentiful, high-quality insulin, for the world, forevermore. 

image source (not recommended)

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Replies to This Discussion

Would something like Elizabeth Warren's Accountable Capitalism Act, requiring the largest corporations to, among other things, act in the best interests of customers, employees, and neighbors as well as shareholders, be a useful first step here in the States?

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