Page 4 - DIY Investor Magazine | Issue 38

Aug 2023 4
DIY Investor Magazine ·
The editorial is usually the final flurry as we put the issue to bed and head off for something refreshing; six hundred enjoyable words to establish a proposition.
However, in this instance I’ll pose the question in the title and invite your thoughts. The reptilian Gordon Gekko may have inspired a generation to flaunt a Motorola ‘brick’ and a Whale Tail Porsche, but is there a line beyond which profit at any cost, becomes morally indefensible?
Benito Mussolini introduced the concept of Supercapitalism in a speech in 1933, and it was further explored in Robert Reich’s 2007 book ‘Supercapitalism: The transformation of business, democracy and everyday life’ in which he posits that ‘capitalism has invaded democracy’ because of ‘consumers like you and me who want better deals, and from investors like us who want better returns’.
Following countless sewage spills, some of it hit the fan
when Thames Water made headlines for shoveling money to shareholders, ignoring decaying infrastructure and building up a £14bn debt pile. The £3.3m fine it received for fouling was the corporate equivalent of tossing a few coins in a swear box.
Water companies have collectively paid out £60bn in dividends since privatisation, largely based on massive borrowing. On his unlikely journey from punk legend to environmental campaigner, Fergal Sharkey said ‘not a single penny of public money should be spent bailing out this company’. Watch this space, and your bills.
Against the backdrop of a rapidly escalating climate emergency the Tories’ almost aggressive support of fossil fuel extraction defies logic. The ‘energy security’ argument seems hollow given that oil and gas trade on international wholesale markets.
Energy companies are effectively being given the golden ticket of decades of government support for business as usual, on the promise of developing alternative energy, at some point between now and 2050.
So, do you invest in ‘gilt-edged’ oil and gas, or do the ‘right’ thing and back green energy; spoiler alert, the HydrogenOne investment fund launched at 100p in 2021 is trading at 48p. Government support of aviation is even more baffling.
Predominantly foreign-owned airports are in a feeding frenzy for expansion, presumably because somebody twigged that the sector could become toxic as the climate crisis worsens.
Aviation is the fastest growing source of GHGs and the most difficult sector to decarbonise. Set to be challenged in the courts, the government’s risible Jet Zero strategy propones
that a combination of carbon offsets, ‘sustainable aviation fuel’ and carbon capture can accommodate 70% growth whilst still achieving net zero by 2050. ‘Fantasy’ doesn’t even come close.
Where France is clamping down on domestic flights, Mr Sunak recently made it easier for his mates to get to their third homes in Cornwall by halving APD, saying, ‘I’ll be flying as I normally would’. Oh dear. Airlines are staggering under the weight of their profits, unencumbered by duty on aviation fuel, and placing orders for planes that will still be belching out toxic fug when 2050 comes and goes; their greenwashing adverts are mirrored by government ‘guilt free flying’ gaslighting.
And it is this government influence in the later stages of capitalism, that can skew markets and inform investment decisions; do you trust the fossil fuel leopards to change their spots whilst taking the dividends, or put a pin into a list of new kids on the block and do the investing equivalent of backing Lucky Jim in the 2.30 at Kempton Park?
And don’t bother complaining, because when capitalism invades democracy, the right to dissent is removed.
We’d love to hear what you think ask@diyinvestor.net
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