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THE PROFIT ADDICTION

By Stuart Sim

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The Montréal Review, August 2012

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"Addicted to Profit: Reclaiming Our Lives from the Free Market" by Stuart Sim ( Edinburgh University Press, 2012)

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It is one thing to strive to make a profit out of your skills and talents, something else entirely to indulge in profiteering or to assume that absolutely every area of your life must yield a financial profit. Unfortunately, profiteering is now rife in the world of business, particularly in banking and the finance industry, and adherents to neoliberal economic theory are adamant that the profit motive should guide all our actions. This is a topic I cover in detail in my new book Addicted to Profit: Reclaiming Our Lives from the Free Market. There, I investigate how, in the wake of the progressive deregulation of the market in the last few decades, the pursuit of profit has been distorting our values of late. Neoliberal economics and globalization have come to dominate the global political scene, and what they demand above all is profit.

It has been one of the most depressing aspects of life in the West in recent years to observe the extent to which politicians have absorbed the neoliberal creed, and how the profit motive has been more and more widely applied to public sector activities. In the UK, for example, it is government policy to open up the education system to the profit motive, on the grounds that this will lead to greater efficiency and a higher level of service being offered to 'consumers' (as those of us who work in education are constantly being instructed to call our students). So schools are being taken over by 'entrepreneurs', whose main goal, of course, is to make money out of the exercise. The political class in the UK is obsessed with the profit motive to the extent that they really can be described as suffering from a profit addiction, unable to stop themselves demanding that the profit motive be introduced into every area of the public sector. Most countries in the West have gone down this route to at least some extent recently, being encouraged by neoliberal economists to imitate the American model of a minimal public sector - in areas like health, for example - as much as possible.

Where possible in the UK, the public sector is being broken up and sold to the private sector, again the justification being that this will improve efficiency and service - and will also cost less. It is instructive to note in this respect where this efficiency has landed us with the London Olympics. The company hired to handle security there, G4S, failed to come up with enough staff (despite having years to set up the project) and the army and the police had to be drafted in at the last moment to cover the shortfall - at the taxpayers' expense naturally.

The worst example of the addiction to profit can be found in the credit crisis of 2007-8, which is still with us several years down the line. In order to win the ridiculously high bonuses on offer for increasing their employers' profit margins, traders took more and more risks until the system just collapsed. We're all still suffering in the aftermath of that. The pursuit of profit is also driving the current search for new oilfields in remote locations, as other sources either begin to decline or to be found inadequate to meet an increasing demand for fuel around the world, particularly in up-and-coming economies such as China and India. The more fossil fuel we use, then the worse that global warming becomes, but most of the oil companies are firmly in the sceptic (or 'denialist' as it has been dubbed), camp when it comes to that issue. Neoliberalism requires constant growth, and constant growth can only mean increasing fuel use. Few governments are brave enough to question this model, or to move significantly into green technology, and the corporate sector is always likely to take up the easiest option and to invest in proven, and still relatively cheap to produce and use, fuel technology - which means oil.

Public service is viewed largely with disdain by the Western political class in general, whose funding comes largely from big corporations they are at pains to avoid upsetting. So markets continue to be deregulated and the public sector to be reduced in line with the principles laid down by the guru of neoliberal economics, Milton Friedman. Friedman insisted that companies existed solely to make profit for their shareholders, and that absolutely anything that militated against that, such as contributing to social causes, was effectively stealing from the shareholders. It is also stealing from the shareholders not to find the cheapest source for the production of your products, hence the mass outsourcing of production to the developing world that has been occurring over the last few decades.

In Addicted to Profit I examine how the profit motive has been allowed to infiltrate a series of areas where it can only cause harm: health, education, the arts, the list goes on. Do we really believe that the American healthcare system is the ideal we should all follow? Do private, corporate-owned, universities really provide a better education and value to the community? Is artistic creation really about producing only what sells and makes large profits? Does an unregulated market really benefit the whole of humankind? I don't believe so in any of these cases, and Addicted to Profit is a call for action to resist the neoliberal juggernaut and to recognize that our lives needn't be all about profit: that indeed they are impoverished if we let ourselves be drawn into the profit addiction.

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Stuart Sim is Professor of Critical Theory, Northumbria University, Newcastle upon Tyne, UK.

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