The cost of doing Business

It is the guardian again, not in anything specific; however generically speaking there is an issue that requires visibility.

Let’s take a look at the following headlines: “Ebola is in America – and within range of Big Pharma“, “How bet365 profits from Chinese punters who risk jail for gambling” and “Brutal competition batters supermarkets the world over“, here is the cost of doing business.

How is it relevant?

That is the first part, this is not about relevance, and also, these issues are not linked (as far as I can tell), but they do have something in common (other than that they were all in the Guardian on October 5th 2014). Let’s take a look at big pharma. The article comes from Julia Kollewe and is a good read, from the article I got the following parts:

Unfortunately, the standard economic model for drug development, in which industry takes all of the risk in R&D and gets a return on investment from successful products, does not work for diseases that primarily impact low-income countries and developing healthcare systems” and “GSK is developing a malaria vaccine that could be ready late next year and is expected to be sold on a not-for-profit basis. Its success rate was only about 30% in infants but better in toddlers, although final clinical results and data on the effect of a booster are still due“, last there is “Turner says two commissions are looking at alternative financial models. One idea is that governments could underpin the economic cost of drug development by committing early to buy the first 2m doses of a new vaccine, for example“. How is any of this ‘just accepted’? Let’s take a look at GlaxoSmithKline. It made 25 billion in 2013 with a net income of well over 5 billion (20% net income is amazingly good). Is that not enough? Is the issue not on how they come up with something, how it becomes a solution and then they make a fortune. So, why must they get ‘a set government incentive’? Why are we allowing for governments to bank on failure? Is their continued existence not based upon proven success? Now let’s take a look at the BBC article from May 10th 2012 (at http://www.bbc.com/news/business-17993945) where we see: “The programme obtained confidential tax agreements detailing plans to move profits off-shore to avoid what was a 28% corporate tax rate at the time. Those involved include pharmaceutical giant GlaxoSmithKline (GSK)“. So, not only are they ‘avoiding’ certain due invoices to the Coffers of Osborne, they want pre-ordered and ordained solutions? An anointed decree of set maximised profits. It reads like these boards of directors have a spine no stronger than a paperback, one that is comprised of balance sheets I might add.

So, as we say goodbye on how big pharma will find new ways to get loads of cash on possible medicinal solutions, we should take a look at number two.

Brutal competition batters supermarkets the world over’, the article states ‘observer writers’ yet gives us no names. When we look at certain parts we see a view that is incomplete, but seemingly not inaccurate “Aldi has made huge gains in market share in Australia, from about 3% in 2005 to 10% this year“, this means that the two running the show (Coles and Woolworths), will get a third to deal with. There is more to the entire situation, as we look at the price of milk in Australia “The battle for the hearts and dollars of Australian consumers has distressed the dairy industry, threatened small shopkeepers and prompted a Senate inquiry“, yet is that it? Consider that the dairy market is suddenly downgraded in revenue in excess of 20%, how can that be fair or even good to the supplier and when that is no longer an option, how will the consumer pay for milk when offers will dwindle to 2 suppliers? Then what will the market do?

Last there is ‘Revealed: how bet365 profits from Chinese punters who risk jail for gambling online’, which is an interesting article by Simon Goodley. It is the subtitle that gets us the first part “Bookmaker ‘rotates website addresses to keep ahead of authorities’, says employee“, which already implies that the cost of doing business and ethics are no longer in synch with one another. Ethicality has become a nuisance, especially when a business is actively ‘keeping ahead of the authorities‘.

Then we read “The gambling group says its legal advice is that it has broken no law by taking bets from the country“, is a local law the only part of legality?

When we consider Part 2 of the Serious Crime Act 2007 (UK), we see at sections 44 through to 46, three inchoate offences of intentionally encouraging or assisting an offence; encouraging or assisting an offence believing it will be committed; and encouraging or assisting offences believing one or more will be committed. Is that not the implied part of the ‘alleged’ crime when we see the term ‘keeping ahead of the authorities’?

When we look at section 48(3) we see that a person can only be found guilty of the offence under section 46 (encouraging or assisting offences believing that one or more will be committed) if the offence or offences that the jury find the defendant believed would be committed are specified in the indictment. Yet, this is not enough, for the most, it is not clear to me whether this applies to crimes outside the UK, however In Part 1 section 4 we see “For the purposes of section 1(1)(a), a person has been involved in serious crime elsewhere than in England and Wales if he;

(a) has committed a serious offence in a country outside England and Wales;
(b) has facilitated the commission by another person of a serious offence in a country outside England and Wales; or
(c) has conducted himself in a way that was likely to facilitate the commission by himself or another person of a serious offence in a country outside England and Wales (whether or not such an offence was committed).”

This seems to give enough to warrant it all (if the Jury would agree on this). So why is there such an abundance of acts and actions?

You see, the three articles are unrelated, but together they show a massive change in morale and ethics, the kind that people tend not to get back from. This might be the UK (to some extent), but it is clear that these events have been a fact in the US and are starting to get a more stringent grip to the acts of people in both Canada and Australia.

Now for the part that is linking these three views together. Let’s be clear, that this is a personal link, and as such it is debatable on many levels and also that is up to you to agree and disagree. I am not here to path the road for you, I merely speak of where the next place is, and how you get there is up to you. The press seems to favour emotion over logic (to a certain degree), you see, logic is all about reasoning and emotion is about (rashly) acting. The press gets more signals from the emotional reader, so as we react to soaps and reality TV, the press is having a field day cashing in on a league of events, all informative (in their viewpoint), yet overall not that result driven. Is it for that reason that we see a growing calendar on ‘human events’?

As we look at the big pharma piece we see a growing lack of ethicality. They state one thing, whilst pressing other avenues. The statement of moving in one direction, yet not willing to go the entire distance is something entirely unacceptable. We see the stories on how it is all so expensive to create a drug, yet the other side is not told, on how the top 20 are making in excess of half a trillion dollars, whilst in addition their net revenue is around 25%, which is one of the strongest profit margins. At this point we need to take a look at the initial premise of ‘pre-ordaining’ 2 million vaccines. How unbalanced is all this and with margins that large, why are they allowed these tax breaks?

The Bet365 issue could be regarded as an act, likely to be recklessly criminal. If there was no crime, these places could live on a static IP and we would not see the phrase ‘keeping ahead of the authorities‘. We have entered a stage of living where morality is not just taking a backseat, it is leaving the room, add to that a rapidly declining system of ethics and we end up with a change into chaos. You would wonder how a government would allow for that. Well, that is where the issue becomes murky. I think that for some time now, we have been living under a false pretence. Not unlike Sweden, where in 1917 the King’s powers were considerably reduced, becoming a figurehead with only limited political authority. A change that was done in that case for the good of the Swedish people, yet in many other nations big business made a similar change, only they did not remove power of those elected, as a long term strategy they placed themselves ABOVE the law. This is shown in several of my blogs and the acts BBC showed involving GlaxoSmithKline is only the smallest of examples. I discussed this in my blog ‘The Sanctimonious pretender‘ on August 30th where I stated: ‘Big firms consider leaving the Netherlands, says KPMG report‘, the quote “Some of the Netherlands’ biggest companies are considering leaving the country because of the worsening climate for entrepreneurs, according to a new report by consultants group KPMG“. Well, this is not about worsening climates, this is because nations with a monarchy require a fair bit of accountability, which is why the Netherlands and the United Kingdom has seen much stronger measures for the protection of the people and less so in favour of Big Business.

It is important that we seek solutions that require accountability for all, not just those who are not too rich. It is a tall order, but it can be done if we work together. We accept that there is a cost of doing business, but the view as agreed upon seems to differ as to what big business accepts as a valid cost and what everyone else thinks is a valid cost.

In a world of rapid degeneration of values like Ethics, Morality and Accountability we need to make sure that we see a stronger focus in these three values, if not, standing up to big business might no longer be an option.

 

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