Pope Francis, who visits the United States for the first time this week, has been eloquent in condemning the excesses of "unbridled capitalism." As he puts it, "The worship of the ancient golden calf has returned," producing widespread economic injustice as well as environmental damage to the Earth that has been placed in our care for future generations.
In a recent speech in Bolivia, he was characteristically blunt:
"An unfettered pursuit of money rules. The service of the common good is left behind. Once capital becomes an idol and guides people’s decisions, once greed for money presides over the entire socioeconomic system, it ruins society, it condemns and enslaves men and women, it destroys human fraternity, it sets people against one another and, as we clearly see, it even puts at risk our common home.”
If Francis' indictment is accurate, it shouldn't be hard to find examples to fit the pattern that he describes. And in fact it isn't. Consider, for example, what has happened in the last few days to the cost of Deraprim, a standard, 62-year-old drug used to treat cancer patients, AIDS patients and newborn babies whose mothers are infected with toxoplasmosis, a parasite. Until last week, the drug could be purchased for the not-inexpensive price of $13.50 a tablet. As of today, the drug's new owner is charging $750 for that same tablet.
Why? Because he can. In fact, former hedge-fund manager Martin Shkreli, 32, the founder and chief executive of Turing Pharmaceuticals, says that at $750 a pill, the drug is still underpriced.
As the New York Times reports, the Deraprim case is the latest in a trend in which long-established, basic drugs are being purchased by new companies, which then raise the price to extraordinary heights:
"Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics. Scott Spencer, general manager of Rodelis, said the company needed to invest to make sure the supply of the drug remained reliable. He said the company provided the drug free to certain needy patients.
In August, two members of Congress investigating generic drug price increases wrote to Valeant Pharmaceuticals after that company acquired two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals and promptly raised their prices by 525 percent and 212 percent respectively. Marathon had acquired the drugs from another company in 2013 and had quintupled their prices, according to the lawmakers, Senator Bernie Sanders, the Vermont independent who is seeking the Democratic nomination for president, and Representative Elijah E. Cummings, Democrat of Maryland.
Doxycycline was first approved for use almost 50 years ago. Its development costs had been repaid decades ago, and at $20 a bottle, it was clearly turning a profit for its previous owner. But judged by the ethics of the marketplace, its new owners are doing nothing wrong by raising its price by a multiple of 90. It's not their problem if some people will be denied access to these life-saving drugs at these new, higher prices. It's also not their problem if health-insurance companies are forced to jack up their rates to cover the costs of these long-established drugs. The new owners have control of a product that sick people need to remain alive, and they are willing, even eager, to leverage their customers' desperation in order to maximize their profit.
It's not evil. It's not unethical. It's just business, or so we are told. (And don't forget, Medicare is forbidden by law from trying to negotiate lower drug prices with Big Pharma.)
Then there's the Volkswagen story. According to the federal government, the company secretly installed software into its highly profitable line of diesel engines that could detect when the engine was being tested for emissions. Under that testing, emission controls would be activated and the engine would perform in a mode allowing it to pass the test. But in normal use, that same software would switch off emissions controls, allowing the car to accelerate faster even as it emitted pollutants at up to 40 times the allowable limit. In the United States alone, over a six-year period the company sold almost 500,000 cars installed with that "defeat device", in the process polluting the air that we all breath so its shareholders and executives could make a little more money.
“I personally am deeply sorry that we have broken the trust of our customers and the public,” a supposedly penitent Volkswagen Chief Executive Officer Martin Winterkorn said Sunday once the news broke. “We will do everything necessary in order to reverse the damage this has caused.”
The problem is, this wasn't an oversight or mistake of omission. You can't design such highly sophisticated software and install it in hundreds of thousands of cars across multiple product lines -- Passats, BMWs, Audis, Jettas, Beetles -- without a high-level corporate decision to do so. Most auto analysts believe it highly likely that Winterkorn himself -- an automotive engineer -- had to be aware of such a wide-ranging conspiracy to break the law. And while there's talk of potential criminal charges being filed against those at VW who perpetrated this fraud, I'll believe it when I see it. Somehow, what are crimes in other settings become something else entirely when committed in a corporate setting.
These are the type of excesses that Francis warns against, and as he notes, it's a matter of priorities. Capitalism may be the most productive economic system ever designed by the human mind, but it was not handed down to us as a sacred institution that we are barred from adapting to our own goals. It is a human invention just as a diesel engine is a human invention, and like a diesel, it can and should be adjusted to produce the desired outcome.
As the pope puts it:
"The first task is to put the economy at the service of peoples. Human beings and nature must not be at the service of money. Let us say NO to an economy of exclusion and inequality, where money rules, rather than service. That economy kills. That economy excludes. That economy destroys Mother Earth."