The World This Week: Global Goals vs Global Greed

The United Nations General Assembly has formally adopted 17 Sustainable Development Goals (SDG), which among other things promise to end poverty and hunger on the planet by 2030.

As world leaders, pious do-gooders and wheeler dealers congregate in New York at this time of the year, Pope Francis has stolen the limelight. Even Chinese President Xi Jinping is not getting the same attention. The first Latin American pope visited Cuba before showing up in the US and has ruffled many feathers. In a stirring speech at the United Nations, he championed the environment, assailed inequality and declared that “lodging, labor and land” are the “absolute minimum” for every human being.

As Bob Dylan once sang in 1964, “The Times They Are A Changin’” and even the institution that once enthusiastically engaged in the Inquisition is now infected by left-leaning tree-hugging sentiments. It was not always so. In the 1980s, Margaret Thatcher and Ronald Reagan set out to roll back the excesses of the 1960s. They believed in Darwinian dynamism and the zeitgeist of their era was captured by Gordon Gekko, a character in the 1987 film titled Wall Street. In a dramatic speech a la Hollywood, Gekko decried deficits, blasted bureaucracy, advocated shareholder rights, extolled the evolutionary spirit and declared that “greed is good.”

Martin Shkreli, a New York hedge fund boss-turned-pharmaceutical entrepreneur, is the modern-day Gordon Gekko. Turing Pharmaceuticals, Shkreli’s company, bought rights to a 62-year-old drug named Daraprim. This drug treats toxoplasmosis, a parasitic affliction that affects people with compromised immune systems such as those suffering from cancer and HIV/AIDS. It costs $1 to manufacture a pill of Daraprim. It was being sold for $13.50, but Shkreli raised the price by nearly 5,500% to $750. In an interview with the BBC, he claimed that he was only selling an Aston Martin for the price of a Toyota instead of the earlier price of a bicycle. The profits, he argued, would be ploughed back into research to develop newer and better drugs.

Shkreli’s actions and comments led to outrage. A storm raged on Twitter. Even pharmaceutical groups that, in the words of The Washington Post, have a reputation for circling their wagons and protecting their own have given Shkreli the boot. The truth is that Shkreli, the son of immigrants, is only emulating other pharmaceutical companies. In 2014, the US Congress summoned Gilead Sciences to explain the $1,000-a-day or $84,000-a-course price tag for Sovaldi, its hepatitis C medicine. There are other similar cases.

At the heart of this issue is a simple question: Is greed good?

Proponents of this philosophy believe that human beings are self-interested if not selfish. They function best when they are left to pursue their interests. Prices act as signals for society to allocate resources efficiently. Furthermore, decisions are made instantaneously through demand and supply, obviating the need for a cumbersome, tardy and oppressive bureaucracy.

Opponents of this philosophy contend that markets are unjust. Some have too much power because they own too many of the world’s resources and make most major decisions. More importantly, markets fail to consider long term issues such as environmental pollution that is threatening the health of billions in emerging economies, causing extinction of other species and leading to climate change on a scale that might imperil human survival itself.

Markets have been on a roll since the 1980s. The collapse of the Soviet Union in 1991 made economists the new high priests of society and markets were seen as salvation. Yet they have not fulfilled their promise even in the US, the Holy Land of the modern economic system.

Health care is a classic example of the limits of markets. Uncle Sam spends 17.1% of its $17.5 trillion GDP on health care. Yet Americans do not live as long as Germans, Swedes, Japanese, Australians and the Canadians. Despite Barack Obama’s health reforms, far too many Americans still do not have any access to health care.

The United Kingdom is a society that has long embraced markets and provided the intellectual underpinning for the current economic system, starting from Adam Smith. It is home to the bustling City of London, the mecca of finance. Yet the UK flinches at greed in health care. In the aftermath of World War II, Clement Attlee’s Labour Party government implemented the National Health Service (NHS) that even Margaret Thatcher did not dare to destroy. Health care is now considered a right in Britain and in Europe. Surprisingly, these supposedly inefficient Europeans spend much less on health care than the purportedly efficient Americans.

Intellectually, Shkreli is just articulating what many in Wall Street and the Republican Party hold as an article of faith. If Shkreli cannot make profits, he will have no incentive to produce drugs or make new ones. It is not from the benevolence of doctors, scientists or executives that we expect lifesaving drugs or treatment “but from their regard to their own interest.” Even Hillary Clinton who has spoken out against price-gouging accepts this premise.

Yet it might be time to try something different. This has been a week when the CEO of Volkswagen has resigned because of the “diesel dupe” in which his company’s cars were able to change performance when being tested. To boost profits, the German giant was selling cars emitting nitrogen oxide pollutants up to 40 times above the legal limit in the US. Pope Francis is right in saying “that a true “right of the environment” does exist” and similarly there is a true right to health care. The third Global Goal promises “healthy lives” and “well-being for all at all ages.” This cannot be achieved through the self-interest of people like Shkreli.

Adam Smith, the father of capitalism, argued in The Theory of Moral Sentiments that human beings have a natural tendency to care about the well-being of others. Hence, he argued for education for all that would be funded by the public purse. This implied that the haves would fund the schooling of have-nots, at least in part. This principle has been accepted and extended to health care in most rich countries. If the US accepts this principle and sets out to reform its avaricious, opaque and expensive health care system, the world will be a healthier place.

The author is the Founder, CEO & Editor-in-Chief of Fair Observer. This article was first published in fairobserver.com.