Monday, 14 March 2011

Ok, enough is enough.

Over the past year or so, I have noticed that two news events seem to be in the headlines almost continuously:

  1. Corporations making billions of dollars profit (some of them after having been bailed out by taxpayers) and  paying out huge bonuses to their employees and shareholders.
  2. "Acts of Nature" - earthquakes, fires, floods and tsunamis - devastating vast areas of Australia, New Zealand, Japan, Haiti, Chile, etc. and causing billions of dollars of damage as well as causing deaths, spreading disease, and creating poverty, homelessness and hardship across huge sections of the population.

Of course, these events are in no way linked.  You can't blame an earthquake on Microsoft (no matter how much you want to), any more than you can link the profits of Wal Mart to an eclipse of the moon.


But there is a coincidental link between these unrelated events. Compare these two tables:






The first one shows the profits made in 2009 by the top 10 companies worldwide - after tax.  The second shows the estimated costs of the most recent natural disasters.  Not much in it is there?  Corporations actually earned about $30 billion more in profits (in one year) than the total projected costs inflicted by the four recent disasters I've listed.


I think it's pretty obvious where I'm heading.  Isn't it about time that we started asking, even demanding, that these massive profits are put to a better use than lining the pockets of traders, bankers and investors who already have more money than they could ever spend in their lives?  Imagine if the corporations all turned round and said: "This year, we are going to give all our profits to rebuilding the nations and lives destroyed by natural disasters".  I can't think of a single downside, can you?

  1. Obviously the nations most devastated would get the injection of cash needed to get them back on their feet as quickly as possible.
  2. The big corporations (and those who profit from them) would get an enormous amount of positive PR for giving away their entire year's profits.  No advertising campaign on Earth could achieve the same immediate and long lasting effect.
  3. Pressure on important global economies would be diminished as there would be no need to borrow excessive amounts to rebuild.
  4. Any political or religious objections would be overcome, as the money would go purely to natural disaster zones, and would be put solely to humanitarian use regardless of the race or religion (or the amount of oil in the country ).
  5. The corporations would still have roughly $3.6bn in profit each to do with as they wished.

So how do we make this happen?  I don't know if it ever will, but getting the idea out there is at least a start.  I don't expect everyone to necessarily agree with me, especially those who would lose out of they didn't get their bonuses/dividends/etc. but I would value your thoughts on this regardless.

One last thought:  I've already pledged to give whatever bonus I receive this year to charity, and I want to repeat it here.  How many of you are willing to do the same?  What have you got to lose?  Your house?  Your family?  Your entire livelihood?  Or just a new iPod and a laptop?  Think about it.

2 comments:

  1. A fair amout of these Profits get paid as dividends to shareholders, shareholders are more often than not institutional investors, whose funds sell units to pension and other retail investment schemes. This would clobber the markets and impact real people's life savings or retirement income. Don't you think they should have the choice whether they wish to give to a worthy cause? Before they have to turn off the heating in their granny flat to pay for the tsunami in Japan?

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  2. Thanks for the comment, Anonymous. The suggestion here is that this is a one off. I think people would be willing to forgo growth in their investments for one short period, in order to make a real difference to the world. Or they could heat their granny flats.

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