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Massey coalmine: the logic of the market


Massey Mine Deaths a Result of Market Amorality

Tuesday
April 13
2:35 pm
 

By Roger Bybee

I started learning about workers’ place in our economic system back in high school, when I read my father’s copy of Louis Adamic’s classic book, Dynamite: The Story of Class Violence in America. The book—and subsequent experiences and observations in my life—persuaded me that exploitation and brutality are systemic, produced by a system driven by the relentless pursuit of profit at any cost.

In a previous piece on the Massey Energy coal-mine explosion that killed 29 non-union miners, I was totally riveted by the utter contempt in which Massey CEO Don Blankenship held safety regulations, unions and environmentalists and the impunity he has enjoyed up until now. I focused my outrage on Blankenship as a corporate outlaw; it was tempting to view Don Blankenship in isolation from the system that produced him and has kept him in power.

But I was jolted into remembering a fundamental lesson about the impact of the profit system when I read, thanks to Michael Whitney of FireDogLake, the Standard & Poors recommendation to buy Massey stock despite the bit of bother caused by the 29 deaths. Standard & Poors research arm released a favorable assessment of Massey stock value:

Massey Energy on Monday drew an upgrade to buy from hold at S&P Equity Research, while analysts cut their 2010 earnings estimate by 7 cents a share to $2.55 a share on production losses and costs following an explosion that killed 29 miners. “We believe that the financial impact of the Upper Big Branch mine tragedy to Massey Energy will be immaterial,” S&P said in a note to clients. “Our opinion is based on our analysis of industry mining accidents, Massey’s indemnification to litigation via insurance, and our belief that the company has ample capacity to mitigate most of the 1.6 million tons of production that was expected to be sold from Upper Big Branch.”

JUDGMENT BY THE MARKET

The judgment of the market is that the deaths of 29 miners are no big deal. Massey profits will continue to climb, so now’s a great time to buy up some Massey stock.

The deaths of the 29 miners were not brought on merely by Don Blankenship’s’ reckless disregard for miner lives; they were the product of an economic system that looks only at short-term profits and ignores any other consideration as too trivial and unworthy of further discussion.

Thus, S& P memo’s underlying message suddenly hit me like a truck: "the market " — treated as a sacred deity by politicians in both political parties and the only worthy source for evaluating the value of more and more aspects of American society, is entirely amoral. The market has no moral compass whatsoever.

The market has determined that the 29 deaths produced by Massey’s reckless disregard for miner safety were simply a product of astute financial calculations made by Blankenship and his top executives. Why comply with expensive safety rules when you can negotiate down fines and buy insurance, while barely denting Massey profits?

Perhaps Don Blankenship may not survive as CEO of Massey, as he is already facing pressure from the New York state pension fund and its manager, State Comptroller Thomas DeNapoli, to step down. But as flagrant as Blankenship’s conduct has been, there seems to be little chance that he could face criminal charges, as the New York Times reported.

Rather than invest in safer mining practices, the coal industry has invested instead in Congress with its campaign contributions. The legal payoffs have produced the policy payback sought by the mineowners: weak enforcement of safety regulation. As the NY Times reports:

Spending by the coal industry in Washington has surged in recent years, with the tab for its more than 100 lobbyists — almost all representing mine owners — jumping to $14 million, from less than $2.5 million in 2003.

Much of that is driven by industry opposition to new restrictions that could be imposed as part of an effort to combat climate change. But industry lobbyists have also looked for ways to limit or block new safety measures, like legislation adopted by the House in 2008 that would add new safety provisions, including tougher standards to contain explosions or fires inside mines.

The law-breaking by Massey has been so massive, and the human cost so great, that elected officials–especially Democrats–will probably soon join labor leaders like ex-miner and AFL-CIO President Rich Trumka and the United Steelworkers’ Leo Gerard in denouncing the greed of Blankenship and Massey.

REFRAMING DEBATE: WHO SHOULD ECONOMY SERVE? OR ARE WE ITS SERVANTS?

But up until now, despite with the Wall Street meltdown brought on by de-regulation of market manipulations , even members of the Progressive Caucus have been almost inaudible in challenging an economic system where all value is determined by the market.

Without labor and progressives unabashedly pointing out the roots of our economic crisis and events like the mine disaster, corporations and the Right will continue to dominate the debate over the nation’s economic direction.

But if the issue is reframed as a choice between subordinating our lives to the market or shaping the economy to serve human needs, no doubt the vast majority will choose the latter, and we can begin to move ahead on a progressive agenda for America–with worker safety a top priority.

Posted by Roger Bybee  · 

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