Connected Capitalism?

In the first week of 2013 I decided to begin the year by reading a book that promotes capitalism. Why? Because my goal this year is to read outside my comfort zone. 

The book of choice:  Neville Isdell & David Beasley “Inside Coca Cola: A CEO’s Life Story of Building the World’s Most Popular Brand” (2011, St Martins Press, New York).

Why this book? Well, last year my sister and I argued about the benefits and problems of capitalism which in itself is not unusual because we both agree to disagree about most things political especially when it comes to money and society. Anyhow, we were discussing how we had quite polar opposite views and ended up in a slightly heated discussion about Coca Cola (Coke).

Prior to this particular discussion I had watched a documentary on the depletion of water tables in rural India that the local communities blamed on the production of Coke in their area. However, my sister had just read the book cited above. She insisted I read the book before bagging Coke. I was at her house just a few days ago, saw the book in a pile and took it as my holiday reading. Its at least an interesting perspective. 


In this book, Isdell (former CEO of Coca Cola) argues that there was no proof that Coke created the depletion of the water tables in India and that the report he’d read indicated that depletion was the result of overuse by farmers in these areas and that the water tables have continued to decline at the same rate since Coke has withdrawn from the area. What Isdell does not say is – who funded the report, how were the water tables measured before and after Coke operated in the region, how was water use by farmers measured, what was the amount of water required to sustain the Coke plant to name a few questions. 

Given he states he has an explicit bias to Coke, I am still not willing to take his word for it. 

Additionally, he promotes Coke as a moral corporate citizen. Whatever that means. In his mind, it appears to mean that certain percentage of Coke’s profits are redistributed to the communities within which Coke operates. I was amused to see him argue (and to be fair, he argued well, even if I do disagree), that spending $25 million building a Coke bottling factory in Afghanistan was more beneficial to the community than building a Hospital.  His reasons were simply that the Coke bottling plant would provide 350 jobs which meant the government could collect employee and company taxes to build and sustain their own Hospital and employees could afford to pay for medical treatment. So his argument is that 350 employees would sustain the building and operation costs of a Hospital in Afghanistan so that they could then pay to use the services they have already subsidised through their taxes? Oh, right. 

Moreover, introducing an unnecessary product into a destabilised country claiming some moral victory when this was simply for profitability and acquisition of majority market share in Afghanistan is not responsible. What about the waste caused by the production of coke (including the plastics in which the drinks are sold), the extraction of resources to develop the technology used to make the product saleable, the lack of health benefits to a country that is suffering…I could go on. 

But Isdell claims that this is necessary to alleviate poverty. No. Building Coke bottling operations in developing countries is not in the best interest of the community, no matter which way you view it. It creates more problems than it solves. It uses precious water resources in these countries to make an inferior product and then charges those communities for the consumption of the inferior product even though the superior product – water, is or at least ought to be freely available. 

Isdell calls this ‘connected capitalism’ – the partnership between corporations, NGO’s and governments who work together to create profits in order to resolve poverty. There already exists terms for this kind of partnership – ‘Crony Capitalism’ and ‘Fascism’. Business and government should never be in partnership with each other since history tells us it leads to bribery, corruption and the implementation of the Police state as corporations force governments to enact laws that protect their business interests. It creates class divisions and ensures that poverty always remains to legitimise corporate profit making. 

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2 comments

  1. I don't like Coca-Cola very much, they're a bit naughty.But I disagree with your last comments "Business and government should never be in partnership with each other since history tells us it leads to bribery, corruption and the implementation of the Police state".Sure, corporations exercise great influence on democratic governments due to a wealth of resources disposable on lobbying and the leverage that comes with huge levels of capital (which they can move incessantly from market-to-market). But this isn't to say that it happens every time Government and Business hop into bed together.It's an unignorable reality that corporations and government depend on relationships with each other, and often this is due to mutual interests and benefits which do flow-on to citizens and taxpayers (e.g. toll-roads). Alongside normal service-provision contracts, PPPs are often viable and cost-effective and sometimes the best possible mechanism to deliver services governments have little expertise in. Of course we have to be cautious in identifying the motivations of the private sector in providing public services, but that isn't to say that it can't be done and done well.

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  2. Sorry for the delayed response!! I agree pragmatically speaking, that as long as we have the kind of economic system we have,that such partnerships are inevitable. I guess what I was trying to get at was not that government should be in charge of everything (I most definitely do not think that!) but instead, that private interests should never have any delegated powers that enable them to restrict the rights and freedoms of individuals. Private corporations are not democratically elected, and I just don't think that any government can pretend they are by proxy.

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