Cannibal Capitalism- the Rich Must Eat the Rich

We live in a world that increasingly is becoming one market. In this new global economy, the disparity between rich and poor grows. Through the increased communications of our time, the gap between rich and poor is more clearly exposed than ever before.

In this new world, millionaires are simply secure bystanders. The truly rich must be defined as those who have reached billionaire status. It is this class of people who bear the obligation to create positive social change.

Free market economics has never had a playbook that included a social conscience, however. Supply and demand has a limited set of rules, and playing nice has never been among them.

Public opinion can have an effect on market trends-from making a supplier less popular, and less profitable, to causing the creation of government legislation that will negatively impact the bottom line. And while this impact cannot be overlooked, it is probably balanced out by the billion-dollar business’s ability to effect government and legislation through financial influence.

I believe that the true opportunity for social progress lies through the framing of such progress in profitable terms for the super rich. I believe that the true profit potential in a market place that has become as extremely financially polarized as the current world market is through the cannibalistic invasion of markets by successful businesses into other markets.

Let me explain this principle with an example. The Wal-Mart Company is truly a financially successful company. They face several public relation challenges, most notably their practice of not supplying health insurance to their employees, and paying wages that do not empower their employees with sufficiently livable incomes.

The Wal-Mart Company has also established a business practice of controlling costs by controlling as many possible circumstances in the cost process as possible.

In my vision of cannibalistic capitalism, the Wal-Mart Company would take the following steps:

They would analyze the medical market, and find that the reason they cannot afford to supply medical coverage lies in the exorbitant profit margins of the medical services market.

As Wal-Mart well knows, when any industry has too high of a profit margin, it leaves itself open to drastic invasion by a competitor willing to cut costs.

In the medical industry, this is true in multiple areas. First, medical colleges charge huge fees for schooling. This contributes to the process of doctors and staff who graduate from them, charging huge fees for their services.

Secondly, the insurance industry, which pays these doctors for the insured, also has huge profit margins.

And third, there is the pharmaceutical industry, which has perhaps the highest profit margin of all.

Wal-Mart has just this week begun a national price war on generic drugs, offering many at $4 for a month’s supply. I would suggest that this should be just the tip of the iceberg.

What Wal-Mart should do is begin a takeover of the entire medical industry.

The Walton family, who now boast four members with fortunes of over $20 billion each, should found a series of medical colleges, where they supply free tuition, in exchange for lifelong contracts of the doctor and staffs they train. These doctors will then work at Wal-Mart funded medical centers across America, at reasonable wages.

By controlling the cost of education, and the cost of medical staff, Wal-Mart would cut out two huge profit centers-middlemen, so to speak-that currently help drive medical costs beyond the reach of many Americans.

By lowering costs in this fashion, they could create a medical services industry, which would allow Americans to bypass the insurance industry altogether-and eliminate another middleman, and huge profit center-the hospital industry.

And with this new medical service industry, now low cost, like everything else Wal-Mart does, they can provide free health care to all of their employees.

By taking the next step-purchasing pharmaceutical companies and lowering costs and prices-they can lower their cost of employee benefits even more.

Similarly, Wal-Mart could also increase employee benefits by building apartment buildings above their current stores, and offering low rent housing. Current employees would benefit from low rent and easy access to work, and other residents would increase shopping time.

By supplying these human resource benefits, Wal-Mart would not only answer their public relations critics, but increase profitability, and branch into new areas of revenue that currently are ripe for invasion because of their bulging profit lines.

Increasingly in the 21st Century, I believe that it will be the companies that invest into human benefits, which will survive. Companies with skyrocketing profits who do not re-invest them into human benefits will be cannibalized by companies who do.

Human concerns-the cost of living, food, rent, medical needs, utilities, and the basics of life-are the true growth market of the 21st century. With possibly 40% of the world’s population living in poverty, it will be the companies who successfully address these needs that remain powerful, and grow into the giants of the next century.

Companies who look to expand fields of revenue by invading markets that are bloated with excessive profit margins are the ones who will grow fastest, and run the least risk. If there is a defined need-such as pharmaceuticals-and there are companies posting almost obscene profits, it only makes sense for someone else to come along and do the same thing cheaper, and take away their business.

In a free market economy, where supply and demand rule, there need be only a clever analysis of supply for obvious demands for a company to grow. If a company has it’s own capital, it can always find a market where it can provide quality for a lower price, and thereby automatically create a superior demand.

And in a world economy where there is a growing divide between rich and poor, the smart companies will learn to feed on the well-fed carcasses of the rich. Every industry that cheats consumers through excessive profiteering should become the prime target of any company that has the resources to produce for the same market.

In the end, the only argument that will convince billionaires to help society is profit. But, with clever analysis of the free market, the best profit will inevitably be found in long-term benefits made to society.

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