Ordinary Gweilo

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Barking (up the wrong tree)

I see that the SCMP is apparently still printing nonsense (paid subscription required) from Simon Patkin. I hadn’t noticed his article last Friday (mainly, I suppose because I didn’t read the paper that day), but there have been a steady stream of letters to the editor pointing out the stupidity of his views so I went back to find out what he had said.  it was well worth the effort.

It seems Simon is still deeply concerned about the Hunghom Peninsula business (when SHKP and NWD bowed to pressure from campaigners and decided to renovate rather than demolish several apartment blocks).

Capitalism is based on the ethical foundation that man (and woman) must be free to use his mind to express his thoughts and to produce things based on his own thinking. In this way, capitalism alone allows man to choose the values that he thinks will help sustain his life, to rationally create these goods or services and to keep the rewards. This is all the Hunghom developers wanted to do.

It is this system of morality that the state must protect by enshrining the right to life, liberty, property, free speech and the pursuit of happiness. There is no place for mob rule or green theory here – just limited accountable government. For companies, this morality includes protecting the rights of their shareholders above trees and animals to maximise profits.

Trees? Animals? What’s that got to do with Hunghom Peninsula?

Simon’s idea of the ethical foundation for capitalism is really rather eccentric. If you were to ask people what that meant, my guess is that 99.9% of respondents would say that companies have to act ethically, towards their employees, customers and the general public, and that they have an obligation to consider the environmental impact of what they do. Which is exactly what the two property developers did with regard to Hunghom Peninsula. They made a commercial decision that demolishing perfectly good brand-new apartments was very likely to upset potential customers.

If Simon actually ran a real company I think he would probably understand this rather than claiming that the developers were "brought to their knees". Instead, sitting in his "free-market think-tank" (which I’m guessing is him and his computer in the spare bedroom) he comes up with these total absurd arguments.

Actually, I like to imagine Simon as a small businessman driving through a red light on his way to see a customer. When stopped by a policeman he would explain that he had no choice, because he has to behave rationally and waiting at traffic lights is reducing his profits – and his shareholders would never allow that.

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4 responses to “Barking (up the wrong tree)”

  1. simon patkin avatar
    simon patkin

    I’ll make this brief. I believe your commentary substitutes rationality for cheap ad hominems (“barmy,nonsense” etc. ), appeals to authority (“my guess is 99.9% of people think…”,) false analogies (running red lights to see a customer)and downright misrepresentations – red lights are there to save lives.
    If you want to be taken seriously, I suggest you take your writing seriously too.
    Finally, I cannot see your real name listed in your blog.

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  2. Chris avatar
    Chris

    Yes, yes, but do you disagree with the substantive points I made here and in my previous post on this subject?
    My point is that capitalism only works because capitalists moderate their desire to make money. Just as I’m sure you wouldn’t really go through red traffic lights, sensible businessmen don’t do things that upset large numbers of people.
    Do you dispute my assertion that the overwhelming majority of people would view the ethics of capitalism in the way that I described them rather than as the need to maximise profits at the expense of everything else?

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  3. simon patkin avatar
    simon patkin

    I think you are posing a false dichotomy when you say maximizing profits at the expense of everything else. It is not usually a case of either or. People can maximize long term profits by listening to the public through research surveys…. e.g. more people want x colour shoes this way. If someone puts out a product that is demonstrably dangerous, they will quickly (in a few seconds) lose a reputation that takes years to build
    They can also influence decisions by coming out with new products. Let’s try to find a nice uncontroversial example such as a new product that can (say)improve battery efficiency by 50%.
    That product did not exist before and someone, through their own thought process has brought that into existence.
    Should that person listen to others and not put that product out because it might cause workers in factories to lose their jobs? Maybe the battery workers’ union whip the public into a frenzy? Here the inventer should assert his right to come out with new product. (most people can be batter workers, but it takes a lot more mental effort to improve battery efficiency).
    What if the inventer tests the product and finds it safe, but then an NGO (working with the unions) asserts that it could be unsafe but comes out with no proof – again the inventer must assert his right to produce, rather than give even more money to that same NGO – just to keep it happy
    The whole idea of not doing something because it makes many people “upset” panders to their emotions – especially if they are irrational.
    The test should be the rationality of the argument, not whether someone else feels upset. Mind you – the company should also actively come out and put its side of the story.
    I think there needs to be big reform in the way land is allocated (and I agree that it is wrong to stop auctions to control the prices – but that is for another time and another article.)

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  4. Chris avatar
    Chris

    I don’t think that your example is relevant to the argument you were putting forward in your SCMP article. Of course I’d agree that the company should exploit their new invention, just as I would argue that it is beneficial to the US economy to import toys, garments, etc., from China, the rest of Asia, Mexico, or wherever they are cheapest. Trade Unions and lobbyists will be against it, but their arguments are irrational and should be resisted.
    Unfortunately what is quite likely to happen with an invention such as the one you describe is that a large company would buy up the rights and supress it because it it might harm sales of their existing products. There are plenty of real-life cases of this, and it happens because companies are trying to maximise their profits. The patent system tends to make it easier for large companies to behave in this way (but let’s not get distracted on that).
    Anyway, the point at issue is whether a company should do something that is profitable but unpopular. You’re right that companies often fail to put forward a good argument and do sometimes behave irrationally as a result. I’d also agree with you that environmentalists present things as ‘black and white’ when science doesn’t back that up and the reality is more complex.
    However, the particular example you chose to write about seems much less debatable. We are talking about some apartments that have been built very recently and which are undoubtedly inhabitable. Knocking them down to build larger apartments might maximise profits but it makes little sense in any other regard. In fact it is not a rational thing to do – unless you believe that that profitability is the only criteria.
    My interpretation is the SHKP and NWD concluded that they couldn’t convince the general public that demolition was a sensible course of action, and so they changed their plans. I find it hard to fault the logic of that.

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