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Pit Opening Program?

Discussion in 'off topic' started by redcogs, Feb 21, 2011.

  1. MichaelC

    MichaelC pfm Member

    "My point is if you do not think how the profit is generated then you are at risk of causing great damage, like Enron, Bear Stearns etc." I very much doubt it.

    The oil example was just to show you an instance, we all use oil based products without really thinking of the bribery and corruption it generates or the misery it causes many people who's lives are affected by the pollution. So what do you suggest? To be fair though that is a very good point and opens up a whole new debate...eg do we unilaterally further regulate to the extent, for example, energy companies to ensure there can be no bribery, to ensure there can be no pollution and in achieving that aim we render them impotent in the international markets such that they can't compete with the consequential damaging effects on the UK economy? Or do we seek international agreement (and to what extent?) before implementing such change? Do we accept that certain countries will not implement such change? What should we do in relation to those countries that do not implement change? And so on...it's not easy at all.

    Incidentally, and something that may brighten your day, the Bribery Act which is eventually due to come into force is legislation led by the OECD which means that it )or variations upon the theme) will be introduced by many countries, but not all.
     
  2. russel

    russel ./_dazed_and_confused

    Isn't this just another argument showing that pursuit of short term profits are producing long term damage? . After all in a true market system the cost of a product should include the externality cost and in the case of oil this is not so. With regards to a country having to live with a high cost of oil I cannot see it as a bad thing. Europe copes better with high oil prices than America does, in fact when oil prices start to really rise, as they will in the next few years, America is going have to restructure its society to cope and in some cases this is happening, see the flight to the city centres from the suburbs.


    I am glad that the bribery act is coming in but there also appears to be action needed with respect to lobby groups. Trueman first warned of "The Military Industrial Complex" in his remarkably prescient speech, all it seems to have done is alerted Big Tobacco, Big Pharma, The Healthcare Industry, The Banks, Prisons(in the US) as to what they can do. The finance industry spent 5 billion in the US last year lobbying. Its just a form of corruption and its something people need to get to grips with otherwise we will just end up with corporate oligarchies and no free market or freedom at all.
     
  3. MichaelC

    MichaelC pfm Member

    "Isn't this just another argument showing that pursuit of short term profits are producing long term damage?"

    Far from it. Whilst in any economy there will be those who are solely focused on short term profit I would suggest to you that most in business are focusing on profit, focusing on sustainable profit. This is key - yes I want jam today but equally I want jam tomorrow and the day after and the day after that and so on. So not only am I concentrating on making profit now I am equally concentrating on building long term value.

    Am I producing long term damage? I very much hope not.

    "After all in a true market system the cost of a product should include the externality cost and in the case of oil this is not so."

    What do you mean by the externality cost? A contribution to society, say through taxes?? Due regard to the environment, say through having to observe prescribed operating conditions?? And so on??

    Let's take oil as an example. And a good example it is too, particularly in light of BP/GOM disaster. Some in the pursuit of profit cut corners. This is an area requiring greater compliance - I would hazard to suggest that appropriate rules are in place for operating in the oil industry BUT the rules were not inthe BP/GOM instance being complied with as fully as they should have been. I wholeheartedly accept where any business fails in this regard then they must suffer the consequence (be it financial penalties, operational restrictions, greater compliance checks etc).

    "With regards to a country having to live with a high cost of oil I cannot see it as a bad thing. Europe copes better with high oil prices than America does, in fact when oil prices start to really rise, as they will in the next few years, America is going have to restructure its society to cope and in some cases this is happening, see the flight to the city centres from the suburbs."

    I don't know about any country having to live with a high cost of oil - it will only cause harm to an economy until such time that alternative energy sources are refined. For the time being we are reliant on oil, gas, nuclear, renewables until such time that something more efficient comes along.

    Amercia may well have a major wake up call over the coming years when it comes to the price of oil.

    To bring us back to the original thrust of this thread - will coal play a part here in the UK? Personally I doubt it. I suspect the extraction costs and the ability to burn coal in a clean manner will be the limiting factors.
     

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