Capitalist Responsibility and Opioids

One response to the spread of opioid addiction has been a campaign of moral condemnation against the Sackler family, the “secretive family making billions from the opioid crisis.” (Glazek, Esquire, 2017) Or, to be more precise, against the main branch of the Sackler family, inasmuch as Elizabeth, daughter of the eldest of the three brothers who founded the pharmaceutical dynasty, has publicly disassociated her branch of the family from the scandal.

Sackler-owned Purdue Pharma was the first company to launch an opioid painkiller—OxyContin in 1996—and the first to capture the dominant share of the new market, accounting for over half of prescriptions by 2001. At least 100,000 people in the United States alone have died by overdosing on its drugs. Under direct pressure from the Sacklers, Purdue Pharma’s executives continued pushing OxyContin long after they became aware of its addictive properties. They even planned to make more money by treating the addicts created by their own products. The business behavior of the Sacklers has caused an enormous amount of human suffering, not only to adults but to babies already addicted in the womb.

Ample reason, you may well think, to justify moral condemnation. And yet such condemnation flouts a long-established convention by which capitalists are not held morally or legally responsible for their business behavior. They are personally answerable for any crimes they may commit in their personal capacity, but not for acts performed in the course of “doing business,” that is, while acting as capitalists.

This convention is entrenched in the legal forms of the limited liability company and in the corporation. It finds reflection in the dominant discourse concerning wealthy “philanthropists,” including, until recently, the Sacklers, who were honored for their generous donations to worthy causes but never embarrassed by questions about how their fortunes were made. Dr. Jekyll keeps Mr. Hyde well hidden in the shadows: he does not mind entreaties to “do more good” (i.e., give more money), but dislikes demands to “do less harm” (in the process of making him money).

Marx’s Torchlight

Karl Marx caught Mr. Hyde in the powerful beam of his torchlight. He broke into the “secret abode” where the capitalist “does business” and exposed its inner workings. And yet, he too is inclined to absolve the capitalist of personal responsibility. In the 1867 preface to the first German edition of Capital, Marx says that his is the theoretical approach least liable to “make the individual responsible for relations whose creature he socially remains.” He does not exclude assigning some responsibility to individuals, but not much because people are molded by the network of social relations within which they live.

A note of moral indignation does nonetheless creep into the text of Volume I of Capital as Marx documents the callous exploitation of workers—many of them, let us recall, young children—in 19th century Britain. Marx seems to question whether the capitalist is a human being at all. In Chapter 10, on the length of the working day, he identifies the capitalist with two figures borrowed from European folklore: a “werewolf hungry for surplus-labor” and a “vampire thirsty for the living blood of labor.” The Christian culture in which Marx, despite his atheism, was immersed associated the werewolf and the vampire with evil spirits and, ultimately, with the devil. At some level, I suspect, Marx viewed the capitalist’s single-minded obsession with accumulating capital (“making money”) as a variety of demonic possession.

An argument commonly made by socialists is that capitalist firms have to be ruthless in order to maximize profit and survive competition with other firms. A firm run by soft-hearted managers would be at a great disadvantage in the competitive struggle and sooner or later would be driven out of business, either through bankruptcy or a hostile takeover. Being driven out of business would not help anyone. Nor does moral condemnation serve any useful purpose. The only solution, therefore, is to abolish the whole capitalist system and to replace production for profit with production for use under democratic control.

I have often used this argument myself. I still think there is much truth in it. However, it now seems to me somewhat exaggerated and oversimplified.

Publicly Traded Versus Privately Owned

A crucial distinction needs to be made between publicly traded companies that issue stocks and shares and companies that are privately owned—often by members of a single family—and closed to outside investors. The strongest and most urgent external pressures to maximize profits and share prices come from shareholders and the capital market, and therefore affect only public companies. Private companies are immune to such pressures. This gives them some leeway that public companies lack. For example, a traditional family-owned firm may be able to avoid laying off workers when business is slack, provided that the downturn does not last too long.

This is the reason why those entrepreneurs who pursue other goals besides profit-making (they are few, but they exist) choose to create private companies. If, later on, such a company decides to go public in order to raise additional capital, the founder gradually loses control, the “other goals” fall by the wayside, and the company ends up as a “normal” capitalist enterprise. This is the story of Anita Roddick, founder and initial head of The Body Shop (see her book Business as Unusual: The Triumph of Anita Roddick, also pp. 51-53 in Joel Bakan, The Corporation: The Pathological Pursuit of Profit and Power).

Of course, even a private company cannot give too low a priority to profit-making if it wants to remain in business. For example, a certain level of profit is indispensable in order to maintain, repair, and replace machinery and equipment. Measures are occasionally necessary to defend market shares against the inroads of a competitor. A private company, however, can generally get by for long periods without actually maximizing profit.

This takes us back to the opioid crisis.

Highly germane to the question of the moral responsibility of the Sacklers is the fact that Purdue Pharma (makers of OcyContin) is wholly owned by members of the family. It is a private company. Its managers do not have to worry about shareholders, share price, or the stock market.

Nevertheless, the company relentlessly pursued maximum profits to the exclusion of all other considerations. When it launched OxyContin it was not responding to competitive pressures because it was the first company to market an addictive painkiller. Other publicly traded companies were then compelled to respond to competitive pressure from Purdue Pharma by marketing similar drugs of their own. The Sacklers could certainly have chosen not to act as they did. Their moral responsibility is therefore indisputable.

Corporate Culture

If there were no economic pressures forcing the Sacklers to act as they did, then what can explain their behavior? Here it is helpful to bring in the concept of “corporate culture,” or perhaps “business culture.” In an interview with Paul Jay at The Real News, Wendell Potter, a former health insurance executive turned whistleblower, is asked why he made no attempt at “change from within” before resigning. He replies that change from within is impossible because a company executive who even so much as raises a question of ethics is immediately dismissed. Such, he says, is the corporate culture.

Concepts of morality and humanity are utterly alien to this corporate culture. Very rarely is it a matter of ethically sensitive executives being reluctantly forced by external pressures to prioritize profits. Normally, the idea of doing anything other than prioritizing profits never enters their heads.

Corporate culture, however, does not exist in a vacuum. It is one of the means by which the capitalist system inculcates its values and outlook. It is still necessary to abolish the capitalist system.

Treat Them Humanely

Purdue Pharma, together with several other companies that have sold addictive painkillers, is now being sued for damages by public prosecutors at the municipal and state levels. (But not, thanks to Trump’s appointees, at the federal level.) Unfortunately, unless the dollar amounts involved are sufficiently large enough to cancel out accumulated profits, the risk of having to pay fines or compensation has no deterrent effect. The payments can just be written off as business expenses.

And even if Purdue Pharma is driven out of business, and even if all the Sacklers’ companies in various countries are driven out of business, the Sacklers themselves will surely find ways to preserve enough of their assets to live out the rest of their lives in luxury. However, if it turns out that I am wrong and they do end up destitute, I hope they are treated humanely: allotted places in a homeless shelter, permitted to apply for welfare for anyone else, and offered exorcism to free them of their diabolic possession.

An Anarcho-Coalitionism Rebuttal

Jeremiah Harding

In the search for truth, many well-intentioned seekers get trapped trying to blame an individual for the actions of many, or at least a small enough group that doling out punishments would be manageable. It’s understandable, but still fallacious, to claim that Purdue Pharmaceuticals “did” what Stephen Shenfield claims they did. For the reasons myself, and many other authors here, already stated, people are less addicted to the pill than they are the escape from circumstance. It’s not the substance – it’s the cage.

I’m honestly very surprised to hear from a self-described socialist that a change in a single element of vertical hierarchy could improve things this dramatically. Rather, the socialist response would typically agree with my premise, that the whole of society must be changed in order to fix this problem. In fact, many socialists I know see the capital structure as anathema to human happiness, and think drugs are a way the capital class prevents the workers’ revolt. While I am not a socialist, I tend to agree.

So it’s curious that he believes a prosecution of Purdue leadership would even treat the alleged “epidemic”, much less take strides in its cure. Marx believed that there was a separation of what he termed “use value” and “exchange value”. Use value was the immediate value to a worker who produced the thing and exchange value was its value to others, according to one of his rebuttals to Proudhon in Grundrisse.

Now, economic difference aside, what is the use value of an Oxycontin pill to a Purdue worker? Limited. The exchange value, however, is significant. Same to all employees up the vertical hierarchy. Even if we assume that socialism would be a good result to strive for, it beggars belief that a socialist would think taking down a CEO or two would prevent capitalist-trained workers from seeing the same exchange value they always saw in their pill production. They would probably keep doing their jobs, the CEO stepping aside, so a new head could affix to the serpent. Sack Sackler and a new sack will grow.

And this still doesn’t address fundamental societal concerns which cause addiction, to begin with. Junkies will pay whatever exchange value they need to in order to feel as though they escaped their sordid cage. See my piece. And without pill-shoving docs and street pushers, Purdue would be castrated. Sorta like how without troops, there would be no military-industrial complex, and without cops, there would be no prison industrial complex. Without the lower rungs on this vertical hierarchy, and the society which fosters addiction, Purdue would be totally powerless.

Decapitating this snake will not solve the problem. Sue Purdue, jail em all, and another business will take its place, or another CEO replace and repeat the cycle within Purdue. So how much is this really about “responsibility” or “ending capitalism”, and not just ineffectual hacking at branches? I think this problem goes too deep for this surface-level approach to strike true.

Something to consider, Stephen.

A Classical Liberal Rebuttal

Katherine Revello

In the first place, the author has created an artificial distinction between private companies and those with publicly traded stocks. Companies that trade stocks with members of the public—acting in their acquisitional capacities as private citizens—rather than between a closed member of individuals are still private entities. For example, though Walmart’s stock is publicly traded, the day-to-day operating decisions are not made a public council but by the members of the company’s board of directors. Membership on the board, again, is not determined by a public mandate but by the independent decisions of the private citizens who hold Walmart stock, including the Walton family, which founded the company.

This distinction, as well as the author’s assertion that so-called “public companies” are more driven by profit-motives than “private companies” is invalid. Of course, companies with privately traded stock are driven by profit motive; a business that does not turn a greater profit from one quarter to the next does not expand and grow. A local mom-and-pop hardware store will probably never be publicly traded because there’s simply not enough community demand to justify such a move. But that does not mean the owner is unmotivated by profit; greater profits are how that owner expands the services he offers and provides better benefits for his employees.

Besides, to pretend that drug companies are modern-day robber barons, is utterly ludicrous. Drug companies cannot market their product without the approval of the Food and Drug Administration, which means they operate in a space separate from the anarchic wilds capitalism’s detractors allege rule the free market. Regulation is done, ostensibly, in the name of consumer protection. Yet, the cost of complying with regulation drives up the cost of business. Before companies like Merck or Pfizer or Purdue Pharma can even market a drug to the public, they have to conduct research and pass the FDA trial process. On average, the price tag associated with this process is around $19 million. (Moore 2016) And this is only a small fraction of the cost associated with drug development. According to a 2014 study done by the Tufts Center for the Study of Drug Development, the lifetime cost of a drug is approximately $2.9 billion. This figure is “based on an average out-of-pocket cost of $1.4 billion and an estimate of $1.2 billion in returns that investors forego on that money during the 10-plus years a drug candidate spends in development.” (Mullin 2018) Further, “another $312 million is spent on postapproval development—studies to test new indications, formulations, and dosage strengths.” (Mullin 2018)

In short, it’s virtually impossible to make a quick buck in the drug industry, especially since, according to a study recently conducted by researchers at MIT, only 13.8% of drugs make it through the approval process. (Wong et. al. 2019)

Not only, then does government regulation drive up the cost of the drug business, which creates a barrier of entry into the market and prevents the kind of competition that benefits consumers’ wallets, but the in-industry costs associated with drug development are enormous. And the benefits are often deferred.

To attempt to paint drug companies as morally bankrupt entities interested only in profiting off the citizenry is absurd in light of these facts. Yes, the chemical compounds in drugs can be abused, but they can also be used to alleviate suffering. The choice to abuse drugs and use them in a manner other than prescribed by medical professionals is an individual choice. Drug companies cannot be held morally responsible for the decisions of others. One might as soon condemn car manufacturers for the suffering their product inflicts when in the hands of distracted and irresponsible drivers.

Works Cited

Moore, Thomas; Zhang, Hanzhe; Anderson, Gerard; and Alexander, G. Caleb. September 24, 2018. “Estimated Costs of Pivotal Trials for Novel Therapeutic Agents Approved by the US Food and Drug Administration, 2015-2016.” John Hopkins Bloomberg School of Public Health. for-new-drug-FDA-approval-are-fraction-of-total-tab.html

Mullin, Rick. November 24, 2014. “Cost to Develop New Pharmaceutical Drug Now Exceeds $2.5 Billion.” Scientific American. develop-new-pharmaceutical-drug-now-exceeds-2-5b/

Wong, Chi Heem; Siah, Kien Wei; and Lo, Andrew W. 2018. “Estimation of Clinical Trial Success Rates and Related Parameters.” Biostatistics, 20(3), pp. 273-286.

A Libertarian Rebuttal

Gregory J Zink

“It's not capitalism when the system is plagued with incomprehensible rules regarding mergers, acquisitions, and stock sales, along with wage controls, price controls, protectionism, corporate subsidies, international management of trade, complex and punishing corporate taxes, privileged government contracts to the military-industrial complex, and a foreign policy controlled by corporate interests and overseas investments. Add to this centralized federal mismanagement of farming, education, medicine, insurance, banking and welfare. This is not capitalism!”
~Ron Paul~

While I agree that the current state of affairs regarding corporate behaviour/ethics can largely be described as deceptive, destructive, and appauling I cannot agree that the Opioid Epidemic was purely the result of ruthless capitalism. The profit motive certainly did not help the situation (nested within the remnants of the free market), and Purdue Pharma’s actions/inactions on this file are offensive and likely criminal, but the bigger problem remains the corporate-governmental axis that aided and abetted the crisis.

Lobbying, campaign donations, tax evasion, cronyism, no bid contracts, revolving doors between the public and private sector, corporate welfare, and illicit gifts are all part of the toxic formula that has come to embody the corporatism of what is now slanderously described as “capitalism” from the Left. The opioid addiction issue has clearly highlighted the devastating consequences of fusing elite business interests with state power.

This is aptly demonstrated by looking closer at Purdue Pharma. They rank in the top 10% of total registered lobbyists (in terms of money spent) and are in the top 30% for political contributions in the USA. For the last decade they have made it a habit to contribute, on average, around $700,000 a year on cozying up to politicians for favourable policy implementation. And if this isn’t bad enough, 9 out of the 10 Purdue lobbyists have held government positions prior to their lobbying careers. This is the state-corporate nexus that is slowly destroying the increasingly deprived consumer and the residual traces of free enterprise. And all for a bloated leviathan that feeds handsomely regardless of which party takes the branches of government.

There are also a few questions that should be asked generally of the Opioid Epidemic:

What percentage of the blame should the user take for their opioid addiction?

Did Purdue know, prior to the public release of Oxycontin, that it was highly addictive?

How rigourous was the FDA in screening and approving opioid drugs for widespread use?

Why did so many medical professionals (including the AMA) not flag opioids as a destructive and excessive medication?

How did the medical community ignore the reality that once regulations were put in place to limit prescriptions that users would inevitably enter the black market to feed their addictions?

My point in all of this is that capitalism, in and of itself, is not the cause of all the problems surrounding the opioid epidemic. There were many actors involved with this tradgedy and each should be held accountable if they violated the law and basic justice. If the producers and distributors of opioid drugs are found to have knowingly concealed information about their deadliness then they should be fully on the hook for any damages caused. The communities shattered by this crisis deserve compensation and acknowledgment for their hardships. And finally, insisitng that Purdue Pharma is emblematic of “capitalism” is akin to accusing the Zedongs of being the torchbearers of “socialism”. Whether or not the Sacklers were “demonically possessed” by the profit motive does not justify the implication that socialist governance would have amounted to a saintly exorcism.

An Anarchist Rebuttal

Mae Fengari

One of the most common thought processes people have is “without the government, who would do ____.” In this case “Who would keep drugs off the streets?” The answer is simple; certainly not the government. The war on drugs has been waged for 48 years one would think that if it was an effective way of reducing the usage of dangerous substances, it would be over by now. Instead, it has created extensive black markets and worsened the drug cartels in Mexico. In the case of prescription opioids, these are legal substances being abused and causing addictions. Even with the restrictions placed by the government people are still able to obtain these opioids legally, and frequently. We assume that because the government places restrictions on an item, marijuana for example, it will become impossible to obtain. Yet, that is the opposite of the truth. Where there is a demand, there will always be a supply. People will turn to black markets to obtain opioids, just as they have been to buy marijuana, heroin, cocaine, and any other drug deemed illicit by the government.

In order to “abolish the capitalist system” there would need to be MORE government involvement in our economy, which has proven to be useless (unless you count the insurmountable national debt as usefulness). Capitalism is by no means perfect, especially when corporations are allowed to create monopolies; however that’s called corporatism, it’s a side effect of a market bogged down by regulations designed to “hamper corporations” while in actuality they are doing nothing but destroying small businesses. No competition means no standards to judge products by. These pharmaceutical companies have cornered the market, allowing them to advertise their products as “less addictive” without a real competitor to compare to. If the government became more involved (it seems impossible, I know. They already have their hands in every metaphorical cookie jar the market has to offer) they would destroy all the progress that has been previously made towards “fixing the economy.”

I do agree with you on one thing though; capitalists’ abjection of responsibility regarding the means of making their fortunes is a problem. It has been so ingrained in our minds that business is business; that you have to do what you have to do to make money. It does not matter who you have to trample to get where you want to go. Money has become such a focal point of human life that those without it suffer and those with excess are seen as greedy or evil (which, in a lot of cases, at least one of those descriptions is true). People donate money to causes because it makes them feel better, or they genuinely wish to help. But I don’t quite understand why we have put so much faith in money - its pedestal is quite undeserved. We have assigned value to inanimate objects that otherwise are simply metal, stone, or pieces of paper. On their own, they are nothing - why do we allow them to have so much power over our behavior? We all need to take responsibility for our actions, no matter our reasoning for the way we behave.

© 2018 by Zink Publishing Inc.

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