The ongoing takeover battle for British Pharmaceutical giant AstraZeneca shows the inherent contradictions in Free-Market Capitalist thinking, and in particular the conflict between what is good for the people, and what is good for the massive corporations that bestride our planet.
Free Market theory is unequivocal – you let businesses do what they want, and competition will ensure they generate vast wealth which will benefit us all. Except of course it doesn’t work that way, which is why the government is in such a quandary over whether to let the takeover by Pfizer go ahead.
It is obvious to everyone that the only thing that matters to Pfizer is making money for themselves, and that they will stop at nothing to achieve that. If it benefits them financially then you can guarantee that jobs will be lost, research operations will be closed down or moved abroad, communities will be destroyed, and a major part of the British Pharmaceutical industry decimated. The British government also knows full-well that any guarantee it gets from Pfizer in advance of the takeover won’t be worth the paper it’s written on*. Just as with the takeover of Cadburys by Kraft a few years ago, once the deal is complete they will go ahead and do whatever they want. (And in any case what is the use of a ‘five year’ guarantee – what Pfizer are currently offering – compared to the decades it has taken to build AstraZeneca into the company it is today).
In addition, Pfizer’s promise to move its headquarters to the UK for tax purposes (as the UK currently has lower corporation tax than the US) will of course only last until another country undercuts our rate of tax, at which point they will be off. (This is the so-called ‘race to the bottom’, where countries compete to offer the lowest tax rate to businesses: with the only winners being the corporations who play countries off against each other, and the losers being ordinary people who see their public services relentlessly cut as a result of the lost tax-revenue).
So the politicians stutter and prevaricate, unable to admit that the economic philosophy they sell to us is fundamentally flawed, while business leaders rub their hands in glee at the prospect of yet more wealth being transferred into their greedy hands from the impoverished masses . Until we have a political system that truly speaks for the interests of ordinary people, and an economic system that shares wealth equitably, takeovers like this will continue, and the increasing division of our society between the haves and the have-nots will only get worse.