From time to time this blog has suggested that the present fashion for management education based on financial imperatives has led to distortions that are damaging, can lead to short term thinking only and in fact mean that capitalism today is not about capital, or real investment or delivery of goods and services, but financial churning.
This piece about Big Pharma in "Naked Capitalism" gives a leading example of what can happen. Given the context of this activity, the provision of medication for the sick via health services based either on public funding or varied means of private funding, often insurance, it could be dangerous in real ways.
Companies need profit and a surplus for real investment, reserves and to counter cyclical movements in the markets generally. But extraction of monies at this level runs counter to what should be the real purpose of the production of drugs and medications.
What we see here are the complex company structures, emphasis on accounting above activity and sleights of hand that are now all too common across many sectors of the economy. All too often the result of extractive rent seeking of this kind leads to failures in provision and a collapse of services or production.
It is possible that health services are particularly vulnerable to this kind of financial operation. Is this what doctors are for?