The Cost of Cheap part 2: First Remove the Mote from Thine Own Eye
by, May 29th, 2010 at 03:32 PM (1026 Views)
Strawberries rotted in the field.
Beaches choked with oil.
Illegal Immigration took my job.
Yes, these are more costs associated with the functioning of our Cheap American society. Before I dive in, I want to explain how two of these items (Oil Spills and Rotting Produce) are related to cheap, since some readers might be confused. I will tie immigration in as I proceed.
Believe me, I understand that farmers letting strawberries go to rot in the field in order to raise the price of strawberries so that they could make a profit (actually, more like survive), was a bad solution to their problem. However, this action is more a result of a flawed system that is designed to keep market prices as cheap and profitable as possible at the cost of our core values. The system is littered with so much waste and hidden costs that if the truth were known, the public would be outraged. The sad part is that we do know and we chose to turn a blind eye. As for oil, on the other hand, people may have trouble seeing oil as cheap. They see the huge profits raked in by the oil industry and the rising prices at the pump, but they donít understand the true costs that they are not paying directly. The indirect costs include security, military, and environmental issues. There may be more that I do not list here since I do not work inside the system and can not observe all the problems. I can; however, address myself to the food issues better and from experience in the business world I can deduce much of the problems within other industries.
Further, I want to state that my post is not about blame to any specific person. I will admit that I get just as angry over these horrible actions as the next person; however, I realize that I am as much a part of the problem as the people who commit the act. In fact, we are all to blame and it is not because we are all evil. Wait; let me restate this premise better. What I believe is that we are all evil to some extent or other, but not necessarily criminally evil. We like to think we are above it, but we canít hide from our human nature. Take for example throwing away a half eaten meal. Here you are being evil in two ways. First, you are wasting food that someone else may need. Second, you were a glutton for getting more than you really needed. Again, this is not about blame but understanding. We are all part of the problem. Collectively, humans have a hard time understanding that all of the small evils we do on a regular day-to-day basis become scaled up within a large society or big institution. We waste a bun, a bread company wastes hundreds. We throw away half a meal, a restaurant throws out hundreds. We spill a few drops of oil, an oil company spills millions of gallons.
The hardest part for people to grasp is that human society is so interconnected. The information is right before our eyes, yet we chose to ignore it. Our American banks almost fail through greed and folly and the whole world suffers. Greece may fall into bankruptcy and our already teetering economy may stumble. An oil rig in the Gulf of Mexico explodes and our food prices could go up along with gas prices. A hurricane hits the gulf and construction labor and materials rise. All aspects of our society can have a devastating effect on others. Chaos theory applies here. A butterfly flaps its wings in Brazil and Tennessee has a flood. A business in China takes a shortcut and an industry in America disappears. Countries can no longer afford to look only at the immediate problem or themselves when tackling economic issues or crisis.
For instance, when the flap over strawberry growers letting their crops go to waste in the fields hit the airwaves, people actually accused the growers of being greedy. These are the same growers who loose their homes because the market makes the crop they grew cheaper than it cost to grow it. These are the same farmers who work from dawn to dusk and still have to get help from Farm-Aid just to survive. As for myself, I donít blame them. I blame the system. I do feel sorry that our system and society is so flawed that a sensible solution could not be achieved. Our economic system continues to put more and more priority on making money quick instead of making money for the long haul, profits over sustainability. Thus, when a problem like an overabundant crop arises, farmers are taught to take the quickest and most cost effective action, destroy most of the crop. In our system asking for help from the market is not a solution. If a buyer sees a chance to take advantage of another personís problem, they do. Instead of thinking about the need to maintain reliable growers in the long run, our system looks at the short term ability to knock the cost down. Thus, our economy is willing to risk future outages or the complete inability to produce an item for a quick buck now.
There was also mention of the fact that local food banks could have made use of the excess produce at a reduced price for doing the labor. Because of our sue happy mentality, the farmers could not allow the food banks onto their property for fear of being sued if someone hurt themselves while picking strawberries. Another solution bandied about was for the farmers to just give the stuff away. The problem with this solution is how do the farmers cover the costs of planting? Do they just swallow the costs so that we have free strawberry shortcake? If they fold, who will plant the next crop? Who will feed their kids when they are kicked out into the street?
A system that valued the sustainability of our country would have thought the problem out better. The entire problem would have been analyzed. First, because of heavy watering to avoid freezing, which was costly for the farmers and destructive to the community, the strawberry crop came in early and very abundant. As a result the price the farmers could get was far lower then it cost them to grow the product and send it to market. Second, because they need to make money to sustain their ability to grow in future years, a solution to the abundance would have to be found that would at least reimburse them for their costs. The market could be willing to help hold the purchase price or find ways to make use of the excess in a profitable way for all parties. If the market was not able to help, then the local community could help in exchange for a much reduced cost. They could have offered to waive any liability to the farmer for allowing food bank volunteers to harvest the crop.
Illegal Immigration also ties in with the false cost of cheap products. The problem comes from two directions. One, Illegal immigrates being hired by companies at low wages (under the table) to help keep labor costs down and two, our companies going to Mexico to exploit cheap labor and helping to keep the country that way for higher profit from cheap items. Both actions continually feed into the immigration crisis. Yes, I know there is still more to this problem, but these facts are a large part of the issue that we support through our purchases. The cheap cost of our groceries hides higher medical costs, higher security risks, higher insurance, greater disease risks, etc. The list goes on and on.
Now, let us take a look at the oil industry. The spill in the Gulf of Mexico is a result of our participation in a system, more like our demand, of cheap fuel prices. Believe it or not, I think oil can be retrieved anywhere in the world safely. Gasp! Do I believe that it will be done? No! What? Again, I believe oil can be retrieved safety and environmentally responsibly, but I donít have faith that humans, including Americans, can do so. This is also the reason I cannot take Nuclear power as a serious energy option. Our economy is based upon finding the cheapest risk/benefit option available. However, there is no magic answer to this question. There are no alarms that go off before a company pushes the risk factor too far. Our entire market economy is one giant, continuous experiment that only comes to light when a major accident or crisis happens. The sad part is that we know the history and we still continue to fall for it. BP tells us that they can safely extract oil close to shore a mile down. However, they do not tell you that some executive who does not have the knowledge to make a proper safety decision will choose to focus on profits over risk. Boommmmmm! Eleven people lose their lives and an entire costal system, economically and environmentally, is devastated for years to come. We have seen this time and time again with nuclear energy as well as oil production. Minimizing risk takes time and money, which cuts into profits. You donít mess with profits. Someone will always put profits ahead of risks.
In addition, we are all part of this system. We put our desire to buy, buy, buy above the risks we are supporting. We donít want to pay the true cost for getting gasoline safely, so we allow companies to take huge risks and reward them when they get away with it. We are playing a world wide game of Russian roulette and we are starting to lose. The only way to change the system is to change ourselves. Quit wanting everything. Quit buying junk you just donít need. Quit living without sacrificing any wants or desires. These changes may be hard, but so are paying the steeper costs of cleaning up, because some costs carry on for decades.