The 21st century and the rise of the multinational corporation
UnitedHealth Group Inc. (NYSE: UNH) is in talks to buy some or all of Brazilian insurer and hospital operator Amil Participacoes SA (BOVESPA: AMIL3), according to Reuters. Amil has a market cap of $4.47 billion. www.amil.com.br (h/t Dan Primack)
As the President and others debate healthcare and the economy, we see an increasingly failing system that is driving up costs and costing jobs across the entire nation.
At universities, government institutions, non-profits, and for-profit companies -- all enterprises across the board -- the single most significant cost increase over the last two decades is employee healthcare.
UNH is the largest health insurance provider in the nation; but the consequence of a free-market capitalist society is that they are driven by a fiduciary duty to increase shareholder value, not to serve the American public at large. They do so by driving up costs, and expanding to new markets. Their goals as a business are directly at odds with economic recovery for the United States and inevitably economic prosperity for its citizens.
What this means for important industries such as healthcare, energy, and education is that the costs will continue to increasingly become unaffordable for more and more Americans, as corporations bet on taking advantage of a global marketplace, starting first with the BRIC (Brazil, Russia, India, China) nations.
Multinational corporations will become more important and more powerful than nations and presidents as they control industries.
What can governments do to reign in the power of corporations in a 21st century world?
China, although many would disagree, probably serves as the most effective model; intense government regulation, process, and scrutiny. Although obviously it's ripe for corruption, their middle class is exploding (300m+) even as the majority are still in poverty.
The 2000s served as a good example of what happens when governments -- specifically the American government -- does nothing. The market does not restrain itself, it exposes itself.
