The giant American automaker General Motors is filing for bankruptcy leaving many of its thousands of employees and investors wondering about their families’ future. General Motors is another example of the failed economic notion of Laissez-faire Capitalism.

         Simply, unregulated profit-seeking corporations cannot be trusted to conduct themselves in a manner of business that protects the Public from their greed and protects them from their own vanity, because their main objective is to make profits, not to be responsible to the overall health of society. “Now have come to you from your Lord proofs to open your eyes: if any will see, it will be for (the good of) his own soul; if any will be blind it will be to his own (harm): I am not (here) to watch over your doings.” [The Qur’an 6:104]

         Whenever profit-making conflicts with the Public interest, profit-making wins! Thus they become Predators on the Public, not Protectors of the Public. This is not a radical idea, but an obvious fact, if you think about it. Profit-seeking corporations exist to make a profit, and the more profit, the better. Anything which increases profits is good for them; and anything which decreases profits is bad. So they try to do whatever is necessary to make profits. This is the essence of Laissez-faire Capitalism – profit-seeking corporations are left alone to do whatever they choose to do in order to make profits, which is not only disastrous to the economy, but also destructive to society.

         The Islamic economic and financial system is based on a set of values, ideals, and morals, such as honesty, credibility, transparency, clear evidence, facilitation, co-operation and solidarity. These morals and ideals are fundamental because they ensure stability, security, and safety for all those involved in financial transactions.

         Unregulated profit-seeking corporations harm the public these five ways. I am speaking about the larger, publicly-traded, profit-seeking corporations like those whose stocks are traded on the stock exchanges. But the same ideas can apply to any unregulated profit-seeking corporation, even the smaller ones and the private ones.

         Defenders of Laissez-faire Capitalism point out that profit-seeking corporations can be a great force for good in the world, creating and providing wonderful goods and services that would be unavailable by any other means. But the reality is this; if the free market is left unregulated the harm to the public can be measured in five ways.

         1. NOT PAY TAXES -In order to maximize profits, they always seek to avoid or minimize their taxes.

         2. ELIMINATE COMPETION -In order to maximize profits, they always seek to eliminate or control their competition.

         3. CUT WAGES AND SALARIES – In order to maximize profits, they always seek to reduce their labor costs.

         4. DISREGARD THE ENVIRONMENT – In order to maximize profits, they always seek to avoid all environmental restraints.

         5. SELL DANGEROUS, HARMFUL PRODUCTS – In order to maximize profits, they are tempted to sell dangerous or harmful products such as those made with lead paint.

         So what should we do? The adoption of an Islamic-like economic system should be carefully analyzed by the west. No longer should economic policies be based on what is best for corporations; rather, economic policies should be established to advance social stability and human growth.

         The answer is reasonable regulations, applied fairly, so that all the companies are in the same boat and nobody gets any special advantage, would be a step in the right direction. Profit-seeking corporations that are left alone to do whatever they choose to do in order to make profits, leave our world in the hands of irresponsible materialists who only seek to increase their wealth much to the detriment of our world.

            Robert Miranda

rmiranda@wi.rr.com