Can Procurement Save Capitalism?

At times, I could almost go back to my teenage years and be a socialist again. And then you look at the hard evidence, and Venezuela is just the latest example, and you quickly realise that socialism and communism don't work in terms of providing the greatest number of people with a reasonable standard of living, security and opportunity. (Don’t quote China please, that country now bears no resemblance to anything Marx would have recognised).

But then you see stories like this in the Guardian  and doubts creep in. In the latest of a string of examples of price "gouging", a US pharma firm hiked the price of acne cream by 3,900% in less than 18 months. (It's not even clear it works).

We've seen similar moves in the UK where firms have bought drugs that are no longer on controlled NHS tariffs and pushed though huge price increases. The UK government has now said they will legislate to stop this, but it all stinks basically.

This is capitalism at its worse, interpreted by ruthless individuals as the right to do everything and anything to make as much money as humanly possible, no matter what the consequences. We could think of various other examples in sectors such as banking, and even professional services at certain times (for instance, some of the lawyers who represented miners with claims for diseases caused by their work).

The fact is that when free markets work well they bring benefit to the community and the world ultimately. But too many markets aren't free and open, and it is there that the problems start. We can usually identify the imperfections that allow exploitation and greed to run free in any particular market. It may be lack of competition or regulations actually provide barriers to entry, or consumers suffer from asymmetry of information that leads to exploitation.

It is also clear that sometimes - not always, but sometimes - procurement can play a role in correcting these problems. Procurement professionals can take steps to encourage open markets, we can fight against monopolies and oligopolies, we can campaign where regulation works against an effective market or where we see blatant exploitation.

It's not as obvious a campaign maybe as something like the CIPS work on modern slavery (which is to be applauded) but it would be good to see the profession taking an active position in support of effective markets. It is something that Public Spend Forum is putting at the centre of its agenda, but it applies to all markets, not just public sector.

You might argue it goes beyond the procurement executives remit in any single organisation, but surely better functioning markets benefits everyone, economically and socially, in the end?

"Nice to meet you, Louise. What do you do"?

"Oh, I work in procurement - I try to make capitalism work better for humankind".

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