Is Oprah Winfrey’s Pursuit of Profit Different From Anyone Else’s?

On a Facebook trail today, one of my friends posted a link to the Forbes.com “World’s 100 Most Powerful Women” article, beaming because Oprah Winfrey pocketed $275 million followed by Ellen DeGeneres with $35 million and Tyra Banks with $30 million. While my friend is ecstatic about the success of these three women (as am I), she has, over the past year, only had negative things to say about oil and insurance companies. She characterizes oil companies as composed of people who, in her own words “… are greedy for the political manner at which they take the natural resources that has been given, the wars and poverty and wildlife that have suffered due to the demand for this resource. It is not a free market per se but a conquest and exploitation.” Now is it necessarily the case that oil companies are only comprised of leaders whose primary goal is to rape and pillage natural resources through conquest and expansion? The corollary to this is that Oprah, Ellen, and Tyra run wholly virtuous companies who are not in business to make as much profit as possible. Obviously, my argument is that neither of the two previous statements is true. Corporations are run by people, and the same type of people that work for oil and insurance companies work for Oprah, Ellen, and Tyra. In a nutshell, people are people.

Both oil and insurance companies are low margin businesses that provide jobs for millions of people, and must compete in the marketplace to provide goods and services just the same as Oprah. In the case of oil companies, those profits are plowed back into exploration so that my friend can continue to drive her car wherever she pleases. Insurance companies have a fiduciary responsibility to keep an integral pool of reserves so they can pay both current and future claims. Now, have oil companies ever intentionally harmed the environment? I can’t say. Have they made serious environmental mistakes that could have been avoided? Absolutely. Yet I would challenge anyone reading this post to demonstrate that the destruction of natural resources is part and parcel standard practice within the petroleum industry in America. Rarely do we hear about oil spills or other environmental degradation associated with oil companies. New technologies over the course of the past thirty years have made oil exploration one of the most clean and efficient industries imaginable. And regarding health insurance companies, as I have written before, this is an industry that operates on an average of 3.3% profit. When I hear political “leaders” like Howard Dean make misleading statements such as “insurance companies take 27% off the top,” I cringe because if there is anything like that percentage taken off the top the purpose is to put this money into reserves in order to pay claims. Now have there been questionable practices in the insurance industry? Absolutely. Is this representative of the industry as a whole? I think not, but my friend does and apparently so does Howard Dean, who should know better.

Now when I defend oil and insurance companies, my friend says that it is laudable for Oprah to make huge profits because she is an entertainer, but it is not a good thing for oil and insurance companies to make the little profit they do since humans “cannot survive without medical specialists, medications, heat, air etc.” So her logic is first, that we cannot survive without these things, and second, that because oil and insurance have become necessities, they don’t deserve to make profits, even though their average profit margins are about 8% and 3.3% respectively. The fact is we have survived the vast majority of human existence without these things. The modern oil industry has only been in existence about 150 years. Yet somehow we survived for thousands of years prior. The concept of health insurance industry has been around for about 300 years, but hospital and medical expense policies weren’t introduced until the first half of the 20th century. So how were people faring before health insurance companies? Obviously, not as well as they are now. Within our capitalist system, these industries were created from nothing and stepped in to fill a need in the marketplace, which has made them very successful over the course of their relatively young existence. Yet today, we have our own government, and my friend, demonizing companies that provide great jobs, contribute to our economy, and pay taxes, while providing goods and service that people want, need and desire. The fact that they have now become “necessary for survival” should not change their status as freely running, for-profit entities.

If my friend wants to create a non-profit oil or insurance company, then as an American, she has the freedom and the privilege to do so and compete in the marketplace. Rather than running down legitimate companies that are operating within the law, I would suggest she show some appreciation for the free market in America that is the envy of the world, which has provided her (and of course, Oprah) with a standard of living that is unparalleled in the world. It is capitalism that has pulled literally hundreds of millions of Americans out of grinding poverty since the beginning of the industrial revolution. For those who are less fortunate in America, it is the responsibility of individuals such as her and me to meet their needs and provide them with a hand up instead of a handout. We the people are our brother’s keepers, not corporations or government, because corporations and government are both made up of people. We may band together as corporations and governments to help people, but if this were happening at the individual, family, religious institution, and local charity levels, there would be no need for corporations and governments to get involved. So my advice would be before anyone looks to corporations or government, look to yourself first. I think this would be good advice for my incredibly blessed, but equally unappreciative, friend.

Tagged as: Capitalism, Oprah