The EpiPen and banks: greed and capitalism alive and well

The EpiPen and banks: greed and capitalism alive and well

The Epipen and Wells Fargo are hitting high marks on the greed scale. It was the second time in a single week that lawmakers called a chief executive to Capitol Hill to answer for perceived wrongdoing.

WASHINGTON, September 22, 2016 – Greed and selfishness seem to be alive and well in sectors of our business community.  In a recent congressional hearing, lawmakers of both parties chastised Mylan’s chief executive, Heather Bresch, for amassing an $18 million salary while she evaded questions about how much money the pharmaceutical company made from a lifesaving allergy treatment.

Rep. Jason Chaffetz (R-Utah), chairman of the House Committee on Oversight and Government Reform, held up an EpiPen and emphasized the point that epinephrine, the “juice” inside Mylan’s device, costs about $1 a dose. The list price was recently raised to $608 for a pack of two pens, up about 500 per cent in a decade.

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This hearing came months after Martin Shkreli, former chief executive of Turing Pharmaceuticals, appeared in the same chamber because he had increased the price of a decades-old drug called Darparim from $13.50 to $750 a pill. “Here we go again,” said Rep. Chaffetz, “and my guess is if it’s happening in these two instances, it’s probably happening in others.”

It was the second time in a single week in September that lawmakers called a chief executive to Capitol Hill to answer for perceived wrongdoing.  Wells Fargo chief executive John Stumpf attempted to address questions about the creation of millions of sham accounts to boost sales. Sen. John Tester (D-Montana) said that the bank’s practice of opening bogus accounts for customers and charging them to do so had united Republicans and Democrats on the Senate Banking Committee on a major topic for the first time in a decade, “And not in a good way.”

The total cost of this fraudulent behavior at the nation’s largest retail bank was about $2.4 million in unauthorized fees between May 2011 and July 2015. Now, Wells Fargo has been made to pay $185 million in fines, plus restitution to its customers. Yet, chief executive John Stumpf remains in his job. Sen Elizabeth Warren (D-Mass.) argued that Carrie Tolstedt, the executive who was directly responsible for the consumer banking unit, should have to return at least some of the tens of millions of dollars in compensation she took upon being allowed to retire from the company.

This seems highly unlikely.

In the case of our drug companies, greed seems to be a driving engine.

Mylan’s price gouging is only the latest example of a growing trend.  The price of brand-name prescription drugs jumped 164 per cent between 2008 and 2015, according to ExpressScripts. In 2013, Americans spent an average $858 per person on prescription drugs, compared with an average of $400 in 19 other industrialized nations, according to a study published in the Journal of the American Medicsl Association in August.

Most developed countries negotiate prices with drug makers, but Congress has prohibited Medicare from doing that. Permitting Medicare to negotiate prices would set a benchmark for the entire health system, since it covers more than 55 million Americans.

It is time that we came to an understanding that capitalism is not an end in itself. Recognizing that free enterprise is the most efficient form of economic organization, and  affirming that the free  market is the only economic system which is consistent with other freedoms, some have tended to over-estimate its place in the lives of men and nations. And many who promote capitalism most loudly, like Wall Street and our large banks, really act more like socialists when they call for taxpayers to bail out their failed institutions.

“Crony capitalism,” which is really the economic system which dominates today, is hardly what Adam Smith, Milton Friedman,  Friedrich  Hayek and other philosophers of free enterprise had in mind.

In our Judeo-Christian tradition, the purpose of life is not the amassing of material goods, and the purpose of a society is not simply to provide the environment in which greed is given full sway. Our own society has provided its citizens with the most advanced standard of living in the world, yet our educational system is in a shambles, family life is increasingly precarious, drug use proliferates, racial tensions increase, and most Americans believe we are moving in the wrong direction.

Conservatives, in particular, have often betrayed their own larger calling by embracing a crass materialism which, in the end, is not radically different from that which Marxists embrace. To the extent that we believe man is simply a material being and his purpose in this world is to increase his material wealth, the twin philosophies of Marxism and, for example, the “selfishness” advocated by Ayn Rand and her followers, tend to merge.

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Discussing similar trends in England during the Thatcher years, Peregrine Worsthorne, editor of the Sunday Telegraph, noted that, “A healthy society needs both custodians and innovators. It needs custodians..It needs them because without people who feel an obligation to pass things on to the next generation, society falls apart, loses all its savor, all its beauty, all its charm, all its virtue.”

Simply because we believe that economic freedom is the best way to organize our economy does not mean that the amassing of wealth is the appropriate goal for individual lives. In “The Everlasting Man,” G.K. Chesterton provides this assessment of the materialist view of history:

“The materialist theory of history, that all politics and ethics are the expression of economics, is a very simple fallacy indeed. It consists simply of confusing the necessary conditions of life with the normal preoccupations of life, that are quite a different thing. It is like saying that because a man can only walk about on two legs, therefore he never walks about except to buy shoes and stockings.”

Chesterton points out that,

“Cows may be purely economic, in the sense that we cannot see that they do much beyond grazing and seeking better grazing grounds;  and that is why a history of cows in twelve volumes would not be very lively reading. Sheep and goats may be pure economists in their external action at least;  but that is why the sheep has hardly been a hero of epic wars and empires thought worthy of detailed narration;  and even the more active quadruped has not inspired a book for boys called Golden Deeds of Gallant Goats or any similar title.

But so far from the movements that make up the story of man being economic, we may say that the story only begins where the motive of the cows and sheep leaves off…It will be hard to maintain that the Arctic explorers went north with the same material motive that made the swallows go south.  And if you leave things like the religious wars and all the merely adventurous explorations out of the human story, it will not only cease to be human at all but cease to be a story at all. The outline of history is made of these decisive curves and angles determined by the will of men. Economic history would not even be history.”

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To believe that society’s most important purpose is to minister to man’s material needs, rather than his more complex spiritual requirements, is to misread man’s nature. Dante, writing in the 14th century in De Vulgari Eloquencia, described man in these terms:

“That as man has been endowed with a threefold life, namely vegetable, animal and rational, he journeys along a threefold road:  for insofar as he is vegetable, he seeks for what is useful, wherein he is like nature with the plants;  insofar as he is animal, he seeks for that which is pleasurable, wherein he is like nature with the brutes;  insofar as he is rational, he seeks for what is right—and in this he stands alone, or is a partaker of the nature of the angels.”

The selfishness which we have seen with banks and drug companies is hardly new. We have a history of tobacco companies hiding evidence of the danger of their product and auto companies covering up evidence of deadly defects in their cars, and an untold number of similar examples. Our problem is not so much that men and women are immoral as that many no longer recognize the existence of a moral standard. People have always lied, cheated and killed. It dates back to the Garden of Eden and Cain and Abel. Yet, they never argued that it was proper or that they had a moral right to do it.

This point was made by theologian Will Herberg in his book “Protestant, Catholic, Jew.”  He stated:

“….the really serious threat to morality in our time consists not in the multiplying violations of an accepted moral code, but in the fact that the very notions of morality or a moral code seems to be itself losing meaning..It is here that we find a breakdown of morality in a radical sense, almost without precedent in our Western society.”

Our society must understand the environment which has been created and  which has permitted selfishness and greed to grow. That understanding will be advanced by recognizing that capitalism is not an end in itself. When we look into the mirror we should not be ashamed of what we see.

We used to think that an individual’s morality was indicated by what that person did when no one was looking. In the case of Wells Fargo and Mylan,  we now know the answer; Now what about the rest of us?

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Allan C. Brownfeld
Received B.A. from the College of William and Mary, J.D. from the Marshall-Wythe School of Law of the College of William and Mary, and M.A. from the University of Maryland. Served as a member of the faculties of St. Stephen's Episcopal School, Alexandria, Virginia and the University College of the University of Maryland. The recipient of a Wall Street Journal Foundation Award, he has written for such newspapers as The Houston Press, The Washington Evening Star, The Richmond Times Dispatch, and The Cincinnati Enquirer. His column appeared for many years in Roll Call, the newspaper of Capitol Hill. His articles have appeared in The Yale Review, The Texas Quarterly, Orbis, Modern Age, The Michigan Quarterly, The Commonweal and The Christian Century. His essays have been reprinted in a number of text books for university courses in Government and Politics. For many years, his column appeared several times a week in papers such as The Washington Times, The Phoenix Gazette and the Orange County Register. He served as a member of the staff of the U.S. Senate Internal Security Subcommittee, as Assistant to the research director of the House Republican Conference and as a consultant to members of the U.S. Congress and to the Vice President. He is the author of five books and currently serves as Contributing Editor of The St. Croix Review, Associate Editor of The Lincoln Review and editor of Issues.