PCR: Yes, I can remember when I was going to university, we were taught that corporations had responsibility to shareholders but also to employees, to customers, to the communities...and that they had to balance those. But what happened, I can't remember exactly when, but all of the responsibilities were eliminated, except to shareholders. And so, as Noam Chomsky said earlier, if you get pressure to move jobs offshore where the labor costs are substantially slower and the profits rise, and you resist, then Wall Street simply says 'if you resist we're going to finance a takeover, and we'll have somebody there who will move them.'
So it's this sort of short-run focus on profits that makes it hard, or in fact I would say impossible, like Chomsky believes, for these kinds of issues to be responsibly dealt with. So if everyone is operating on a short run basis, focused only on return to executives and shareholders, then you destroy the system. And what surprises me is how many corporate interests fund groups and economists to go around saying that there is no global warming -- they still deny it as a climate problem. This is very prominent among what they call free market economists. It's seen as some sort of government propaganda in order to takeover business or to limit growth.
If you look at economic theory even, it supports these kinds of notions because the science is built up on a production function known as the Stiglitz Solow Production Function -- two Nobel Laureates. And the assumption is that man-made capital is a perfect substitute for Nature's capital. And so what that says is you can never run out of resources. And so the whole notion of depletion or depleting the sinks in the environment...they can absorb waste -- it's difficult to get economists to even think about that. So you even have, on top of the other failure, you have this sort of major intellectual failure.
Rob: It seems like...
NC: If I could make one suggestion. I'd suggest that you invite Bob Solow on the program because I'm pretty confident, though he would understand the logic of what Paul just described, he would not accept the consequences. That'd be interesting to hear why.
Rob: Well we can work on that. It seems like both of you agree that it's basically the nature of the corporation that is causing the problem.
PCR: It's the incentive...it's the incentives placed before them.
NC: Yeah, exactly.
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