Thursday, October 14, 2010

What is Mine? Questions from Chile

Apparently, if you’re a trapped miner, Chile is a good place to be. Just look at the phenomenal effort expended by their government for their freedom.

If you’re a die-hard capitalist, however, the rescue of the trapped workers this week might send chills up your spine.

Because although watching the miners reach the surface became an emphatic celebration of humanity and life, the behind-the-scenes power play for orchestrating what we saw may only add new life to the discussion of how much government is a good thing.

More specifically, was the Chilean government able to achieve something big business couldn’t - or wouldn't?

Capitalists on the Defensive

Apparently, the Wall Street Journal is so concerned about the worldwide acclaim for Chile's utterly successful government-led rescue, they trotted out one of their most vociferous editorialists, Daniel Henninger, to proclaim that what we saw on live television was actually a triumph for capitalism.

And yes, private enterprise did play crucial roles in plucking the miners from their stone prison. As Henninger trumpets in his piece, the "Plan B" drill which bore the hole through which the miners were extricated was invented by a private American company. And pro-business experts claim that this and other contributions to the rescue effort in Chile comprise enough proof that capitalism was key for success in this case. But while the core of their assertion is correct, their hubris is inaccurate. If it was left to private industry to rescue the miners, how much quicker and more complete would their efforts have been compared with the single-minded focus ramrodded by the Chilean government?

How people answer that question is what unsettles free market champions like Heninger, clouds the public's perception of big business, and lubricates the debate over government controls of commerce.

Digging Money from Rocks

Granted, the mine collapse itself has already been described as a product of failures by both the mining company, which intentionally skirted safety rules, and the Chilean government inspectors, who overlooked safety violations. On that score, we got the same scenario that inevitably plays out whenever lower-level grunt workers are expected to carry on while upper management keeps itself safe and wealthy. This represents one of the classic flaws of capitalism, wherein the corollary between profits and worker safety often skews more towards the former at the expense of the latter.

Interestingly enough, corporate information for Compania Minera San Esteban Primera is missing or inaccessible to non-subscribers on two major mining industry websites, Mining Weekly and Global InfoMine. Is this corporate transparency gone bad or simply conventional proprietary confidentiality? Considering how eager the global media community must be for information related to the company, particularly since so many rumors have come out regarding their allegedly poor safety record, one would think San Esteban would be trying to put its best foot forward in the court of public opinion. But then, just like some political dictatorships, some companies don't give a hoot about what the general public thinks.

Just this past May, in Montcoal, West Virginia, 29 miners died in a massive underground explosion at the Upper Big Branch Mine. It became the state’s third major mining disaster in the past four years. The mine’s owner, Massey Energy, features a controversial and politically influential CEO in the personage of Don Blankenship, who has personally campaigned for years against increased oversight of mine safety in the United States. He blatantly champions profits over safety because he knows his workers won't flee - his is the only industry paying decent wages in their part of the country.

One has to wonder what Blankenship must be thinking to watch the Chilean government wrest control of the San Jose mine from its owner, San Esteban, and assert its authority over the rescue effort for the trapped miners. Chilean President Sebastian Pinera makes no apologies for his government’s assumption that they could administer a more coordinated and ultimately successful rescue scenario than private industry. Perhaps Pinera already new that San Esteban simply couldn't handle the emergency, and being a typical politician, he saw the opportunity to make a grand name for himself and his country. And if that was the case, then private industry has a right to quake in its boots.

Because indeed, to the naked eye, the government – which deployed its state-owned copper excavation company to run most of the operation - staged an indisputable victory. They had NASA dietitians design a custom diet for the miners, doctors made recommendations ranging from sunglasses to body-toning exercises, media experts coached the miners on how to handle their newfound fame, psychiatrists counseled on adaptation techniques, and 33 individual tents for each miner's family were set up on-site for their privacy. Would a private company have been as comprehensive in anticipating and responding to all of those needs?

All 33 miners were plucked without mishap from their underground prison, relatively healthy, in apparently good spirits, and happily reunited with loved ones. Who could have asked for a better outcome? Well, maybe at least one of the miners, whose wife only learned of his mistress after he got trapped.

Government or Private Industry?

Was the Chilean government correct in assuming that it had superior capabilities, initiative, and expertise to take over the miners’ rescue? Was its state-owned copper producer, Codelco, really better-equipped than San Esteban, which may still be billed for the $20 million rescue? Are there certain situations and crises where industry is either too lethargic or compromised – either economically or politically – to be as responsive and effective as government agencies?

Obviously, these questions don’t have easy answers, nor can immediate parallels be made between how capitalism works in Chile as opposed to the United States. For one thing, their economy, while robust by South American standards, still pales in comparison to ours. And their government, while remarkably stable by South American standards, is not as complex as ours.

Katrina Can't Compare

Take the debacle of Hurricane Katrina, for example. This is what a lot of media people are doing; comparing the Chilean mine event with our government’s much-maligned response to this natural disaster. Forget for a moment that the Chilean government was dealing with 33 people in a specific spot, even if it was hundreds of feet under rock. Katrina hit a swath of coastline populated by millions of people spread across multiple states who suffered varying degrees of devastation. You can't blame big business for hurricanes, either. For anybody to seriously compare the two seems foolhardy, but since speculation has started to rise, let's look at it further.

Even if Brownie really had done one “h*** of a job” and immediately coordinated a spectacular rescue for New Orleans, the Bush administration would likely have been accused in some quarters of trouncing states’ rights - as well as further enabling a municipal government already festering in corruption, ineffectiveness, and irresponsibility. The Chilean government may have been partially culpable in the San Jose mine collapse because of poor oversight, but the administrations of Mayor Ray Nagan and his predecessors were already notorious for their ineptitude. Which was, of course, symptomatic of their citizenry’s blithe endorsement of all things carnal.

After months of wrangling over the appalling conditions in post-Katrina New Orleans, we learned that evacuation plans, disaster declarations, and even levee maintenance had been negligently administered by local agencies, and that communication fiefdoms among Louisiana policymakers helped obscure reality and minimize responses. Blaming the federal government for all this mess has been the easy way out, but doesn’t address all of the causes for why the world saw a deplorable execution of post-Katrina support.

Ground Zero Can't, Either

How about other mammoth emergencies which required sophisticated rescues? Is the Chilean government really the new poster child for rapid response expertise?

Take 9-11, when trade unions - so often vilified by many conservatives, including me - systematically chopped up, blowtorched apart, sifted through, dug down, bulldozed through, trucked away, and washed down the entire Ground Zero site and surrounding properties in a matter of weeks. Granted, union labor in the United States is its own parallel universe, not quite private industry, and not quite government bureaucracy, but the union laborers were employed by private contractors. And the states of New York and New Jersey, along with the federal government, paid an estimated $3 billion just in overtime to get the work done.

But here again, 9-11 was one of those cataclysmic events which helped realign the course of history. It ranks right up there with Pearl Harbor when it comes to nationalist fervor, response, and ramifications. We'll have mostly forgotten about the Chilean mine rescue before this year is over.

Which really is what all of this speculation is about, isn't it? It's grasping at straws, trying to relate something that is emotional to another event which can help to justify our fascination with it. We can't just celebrate with the miners and their families. We can't just marvel at how a bunch of bureaucrats from a country we barely know anything about could orchestrate what, to us, looked like such a flawless rescue scenario. We automatically cast our gaze across the room to ogres like Massey's Blankenship, or wonder out loud if capitalists need to be even more assertive about justifying their existence, like the Journal's Henninger seems to be doing.

Then there's BP's Big Spill

Speaking of which, let's get back to the topic of the American company that made the drill bit for the "Plan B" rig. In his Journal editorial, Henninger claims "Capitalism saved the miners." While such a prejudiced perspective of the rescue ignores the roles that non-private-sector entities like NASA played in this event, Henninger does make the valid connection between the role of agile, innovative companies which can take advantage of free-market opportunities in ways many of us can't see. Until what they've invented becomes really, really necessary.

People like Massey's Blankenship, and even the Journal's Henninger, like to gut anti-capitalism arguments with broad strokes of social beneficence, claiming we owe all that is good to the profit motive. And to the extent that America's economic policies allow an entrepreneurial environment for exploring new ideas and being able to earn money from products people want, Blankenship and Henninger are correct: the free market can be a great thing.

But how accurate would it also be to ponder the scenario of a mining company dawdling over rescuing trapped miners to first analyze the benefits of doing so - and at what cost - to their bottom line? How many corporations would hold meetings of senior management not to plot the best course of rescue, but to minimize liabilities? I'm thinking here about British Petroleum's farcical oil spill this summer in the Gulf of Mexico. While fellow energy companies ended up stepping in with their own expertise to help cap the blown well, BP seemed bent on alienating as many people as it could, from employees and subcontractors to the government, the media, and business owners along the coast.

Yes, innovation finally brought an end to the BP disaster in the form of an unprecedented capping mechanism that had never before been deployed in such deep water. But we didn't hear too many people gushing about that feat of capitalistic creativity, did we? That's because so much oil had already gushed over the small businesses that were being pushed to insolvency from the crisis.

The Real Issue

Let's face it: there's too much audacity and hyperbole coming from many sides in the political and economic debates swirling around our country. And it's clouding the real issue, which is greed.

Uber-conservatives like Blankenship and Henninger spout platitudes about capitalism like it's the purest form of life. Uber-liberals like Nancy Pelosi and Harry Reid spout platitudes about government like it can bring utopia. But the real, hard, level field of truth lies more towards the middle of both of these passionate viewpoints, doesn't it?

Yes, we need a vibrant capitalistic economy where people are appropriately rewarded for their creativity, tenacity, and good old hard work. We need to safeguard the political and regulatory environment for players in this economy so they can innovate and produce those things that make our society vital and relevant.

But we also need to remember that the profit motive is not altruistic. In its purest state, the profit motive runs on only one fuel: greed. And while it has some built-in mechanisms for moderating the perpetration of harmful effects on society, those mechanisms often don't kick in until lives are lost or other people innocently lose a lot of money.

The trick is finding the balance between letting capitalists run amok and clamping down on them so hard that the economy suffocates to death. The Blankenship's and Henninger's of America may not see the need for this balance, but then, the Pelosi's and Reid's of America don't either.

Chile's newly-freed miners have been unwittingly basking in the glow of a surprisingly complex combination of both socialist and capitalist energies waging war behind the scenes. Hopefully these miners, as well as those economists extrapolating theoretical lessons from this event, will be prudent in their use of what they take away from what we've all witnessed.

Meanwhile, back at the mine, what about the other miners who've been unable to earn a paycheck while their workplace has been taken over for the rescue effort? Do they give a hoot about the bigger picture, or might they be more anxious for the government to leave so they can get back to work?

1 comment:

  1. "But the real, hard, level field of truth lies more towards the middle of both of these passionate viewpoints, doesn't it?"



Thank you for your feedback!