Monday, September 18, 2006


CAPITALISM KILLS: Wal-Mart and Amerada Hess [PA Archives]
By Thomas Riggins

The free enterprise system, AKA the free market, AKA capitalism, is an economic system, as we all know, that is dedicated to maximizing profits at any cost. Neither ethics, morality, honor, the environment, nor human life itself will be spared by this system and its quest to put profits before people (and everything else). Here are some more case studies of the system at work. The previous three case studies in this series can be found in the archives.

CASE 4. One of the duties of the Labor Department is to protect children from exploitation by American corporations. We know from history that the business class will ruthlessly seize upon children to exploit every last cent they can out of them in order to increase their corporate wealth. The Bushites represent the business class to the exclusion of almost every other segment of society. So you can expect these ultra-right Republicans, with the President in the forefront hypocritically masking his greed behind the pieties of a "born again" Christian, to see to it that no child is left behind unexploited.

A perfect example is revealed in the New York Times for 11-1-05: "Labor Dept. Is Rebuked Over Pact With Wal-Mart: Agreement Addressed Child Labor Rules," by Steven Greenhouse.

Wal-Mart is famous for violating labor laws. The article quotes Representative George Miller (Dem Calif.) who says, "The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws. The sweetheart deal put Wal-Mart employees at risk, undermined government effectiveness, and further undermined public confidence that the government is acting on its behalf."

So, what is all this about? The Labor Department found 85 violations of the child labor law (for children 17 and younger) in Wal-Mart stores in Arkansas, New Hampshire and Connecticut. Wal-Mart, among other things, was having the children work with dangerous machinery such as cardboard balers and chain saws.

Wal-Mart had to settle with the Feds -- not the Feds of old, who were not so hot themselves, but the new Bush Feds. It seems that there is a big Republican donor at Wal-Mart and the donor's interests, not those of the children, are what the Labor Department wants to protect. Here is what they did. 1. Wal-Mart paid a cosmetic fine of $135,540 (peanuts for this multibillion dollar corporate criminal). 2. The Labor Department agreed to give the company 15 days advance notice before they inspect again! It is not likely they will find future violations. 3. Even if Wal-Mart is too stupid to clean up its act in the 15 days before the "inspection" and they get caught violating the law, there will be no citations or fines if they clean up their act in the next 10 days. 4. It gets better! This settlement agreement was largely written by Wal-Mart's own lawyers and the Labor Department left its "own legal division out of the settlement process." Sweet! And finally, 5. The Labor Department agreed to "to let Wal-Mart jointly develop news releases" with it about the violations and the settlement.

The foxes are indeed watching the hen house.

CASE 5. This is from the "Metro Briefing" in the New York Times of 11-23-05 ("Oil Company Settles Gouging Complaint") Acting under the maxim that it is an ill wind that blows nobody any good, certain oil companies seemingly could not resist breaking the law in order to price gouge and make extra profits from the human tragedy of Hurricane Katrina. They wouldn't be capitalist corporations if they didn't follow their own version of 'seize the day.'

So what did they do? This story is only about one state, New Jersey (but don't think this behavior was not more widespread). New Jersey accused Amerada Hess of gouging "drivers with higher gas prices" due to the storm. Hess and others (Motiva/Shell, Sunoco, and independent sellers) were charged with having "artificially inflated prices and increased prices more than once every 24 hours, the state limit." It is evidently okay to do this once every 24 hours but not more than once. Anyway – it’s stealing.

The result? Hess, which of course admitted no wrongdoing, agreed to pay the state $372,391 for its court costs. Some of this will go to the poor. Hess also agreed to obey the law in the future -- big of them. The capitalist state is appeased. Why doesn't Hess have to turn over all the money it gouged to a fund to help the poor? No, it gets to keep its ill-gotten profits. You only end up on Riker's Island for petty-theft it seems (Hess is NYC-based). Cases against the other culprits are still pending. If the Hess settlement is any indication, we can affirm that crime (corporate crime, that is) pays.

--Thomas Riggins is the book review editor of Political Affairs and can be reached at

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