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Why Bargains are Bad

by Marq de Villiers

Bargain-hunting has become a cultural obsession (my father in law, bless him, used to drive a good way across town so he could buy day-old bread that a flyer had promised was a nickel a loaf cheaper; my neighbor trolls the Internet for wine a dollar cheaper, or a lawnmower he can get for a hundreds buck off — whether or not he needs another lawnmower). Thrift hasn’t disappeared; it just mutated into the endless search for cheaper stuff.

This search has had many savagely negative effects: it has persuaded manufacturers to set price, rather than quality or service, as the single prime necessity. It no longer matters that something lasts, or does what it was supposed to for longer than it takes to unwrap it, as long as it was cheaper than the competition. This means that things can no longer be fixed, only thrown away, and the next cheap thing bought in its stead. It has driven down wages, and led to the globalized search for an ever cheaper work force. It has led to a world in which advertising tells greater and greater lies. It has led to a world in which predatory discounters routinely drive smaller businesses into bankruptcy, devastating small towns everywhere. It rewards scale. It led to Wal-Mart, the world’s largest retailer, and arch pusher of vast amounts of Adam Smith’s unnecessary things.

Much has been made recently of Wal-Mart’s plans to reduce its environmental impact, and to enforce environmental and social standards on the millions of suppliers that fill its stores. Wal-Mart has switched to environmentally benign light bulbs in its stores. Its trucks are no longer kept idling while their drivers take a lunch break. But meanwhile, Wal-Mart still keeps its prices as low as possible. It works this way: a factory in a small town, say Winchester, Virginia, makes, say, rubber goods. Call it, oh, Rubbermaid for short. It is a good-sized firm, and it has always operated in a socially responsibly way — it has a stable workforce, pays livable wages, makes products that endure, and sells a good many of them to Wal-Mart. By 1994, the company was doing so well that it was voted the most-admired American company by Fortune magazine.

But a few years later, as Joe Bageant put it in Deer Hunting with Jesus, “North America’s largest plastic products company was a foundering corporation, brought down by the boys from Benton, Arkansas… In 2001, Wal-Mart’s executive management team heavied up on Rubbermaid, demanding ridiculously low prices despite an 80 per cent increase in the cost of raw materials, and personal pleas from Rubbermaid CEO Joseph Galli. Galli begged. Wal-Mart stood firm. Later, when Rubbermaid refused to go along with Wal-Mart’s utterly unworkable price, Wal-Mart dropped the hammer. It pulled Rubbermaid products off the shelves, replacing them with knockoffs… After seeing its sales drop 30 per cent, Rubbermaid caved.” Rubbermaid shut down 69 of its 400 facilities, fired eleven thousand workers and planned to shift half its production to what it delicately called “low-cost countries.” Five years later, Rubbermaid’s profit was up — net income of $108 million. But the workers were still out of work, and the town devastated. “The fact that stock rises — and its owners along with it — in the wake of mass firings says more about what corporations consider an asset than a million mealy-mouthed Human Resources brochures and Wal-Mart smocks,” as Laura Penny so trenchantly put it.

What is gained? It is easier to see what is lost. Workmanship and product integrity are lost. Paying jobs are lost, and workers who feel good about themselves and where they work. A good corporate citizen is lost, and with it a tax base for another small town. In a larger sense, a culture that understood standards, workmanship, and the value of craft is degraded, along with the sturdy but apparently obsolete capitalist notion that competition leads to stronger, more highly evolved industries through the process of “creative destruction.” Instead, we get price wars and the relentless erosion of standards. We get big box stores with no roots and no conscience. We get the commodification of jobs that has ravaged the middle class.

So ask again, who benefits? Here’s the answer: when Caterpillar moved its operations to right-to-work (i.e. anti-union) states with low wages, its employees could no longer afford to buy houses or send their kids to college, but the company’s profit jumped, in 2006, by more than 70 per cent, and the CEO got more than $14 million in what is laughingly called “compensation.” You can call it compensation, if you like. I call it swindling.

So what happens when we stop shopping?

This is the great conundrum. The economy is built on consumption and the early obsolescence of things provide jobs, and keep the economy ticking over. How do you manage a transition, if people stop spending? Before, you could always rely on technological advance. People could stop buying buggies, and the buggy manufacturers went out of business, but people bought cars instead, and car makers prospered. But what happens if they stop buying something — and buy nothing to replace it? If men stopped shaving, thousands of workers would be laid off, because their jobs are to make razors and razor blades and batteries for shavers, and shaving cream and lotions, and devising marketing campaigns for shaving systems. This dilemma is replicated in every industry, in every town, in every region, in every country. Andrew Revkin, The New York Times’s wise ecology correspondent, pondered the question not long ago, though he put it this way: How do you grow an economy without the jobs and the taxes that these unnecessary things produce? And he added: “The market, unfortunately, does not differentiate between good and bad. If the people want junk, the market will provide. So we have to fall back on the conscience of our business leaders.” In which he was surely being sardonic.

But in Revkin’s question lie the seeds of an answer. He asked, how do you grow an economy without the taxes and jobs… ? The beginning of the answer surely is, don’t grow. As Tim Jackson puts it, “consuming less may be the single biggest thing you can do to save carbon emissions, and yet no one dares to mention it. Because if we did, it would threaten economic growth, the very thing that is causing the problem in the first place.”

Marq de Villiers is an award-winning writer of books and articles on exploration, history, politics, and travel. He is also a graduate of the London School of Economics, and his latest book puts his training in economics to good use. Our Way Out: Principles for a Post-Apocalyptic World offers a refreshing menu of economic options for an overly consumptive population living on an environmentally stressed planet.

Remembering History

Comment to Tim Murray and Tom Butler

by Lisi Krall

It is worthwhile to recall history as we ponder Tim Murray’s proposition that we direct our “energy into stopping economic growth” rather than saving “the environment piecemeal” through conservation efforts.  It’s enlightening to go back to Thomas Jefferson just to gain some perspective on what happened when the market economy was fertilized with the industrial revolution.  Thomas Jefferson, writing in preindustrial America, thought one of the attributes of our nation that would enable us to “become happy and prosperous people” was the fact that we possessed “a chosen country, with room enough for our descendants to the hundredth and thousandth generation.”  Do the math, because it gives you some perspective on Jefferson’s world.  Apparently Jefferson thought we had a big enough unsettled country for agricultural expansion to take place for 20,000 years.   Clearly, Jefferson didn’t anticipate what was coming.  The pace and reach of economic expansion were beyond anything he could have imagined as he looked westward from Monticello at the turn of the 19th century.  Yet little more than a century after Jefferson wrote these words the country had become an industrial giant and most of the land had been given over to private ownership.

It was this pace of economic expansion coupled with a mostly wild country that gave rise to the conservation movement in the United States.  It quickly became abundantly clear that in the wake of our great economic experiment, nothing would be sacred and there was much to lose. In the United States, the conservation movement literally grew out of the rapacious speed and reach of 19th and 20th century capitalism and in this sense was very organic.  The preservation arm of the conservation movement became manifest in a wilderness ethos.  The wilderness ethos spoke to something foreboding about our so- called economic progress, the fact that we clearly had the capacity to put an end to the magic and pulse of a mostly untrammeled country in no short order.  The conservation movement, especially the preservation branch of that movement, helped us to think more critically about the meaning of progress and the place of humans on the earth.  Preservation was a cultural response to the most egregious impulses of capitalism.   It was a cultural meditation and institutional grappling with what a healthy human ecology should look like and when it was necessary to stop so-called economic progress for the sake of something more important.  It led John Collier to comment:

The profit-motive finds no use in Wilderness; and Wilderness can perish utterly in its remote silences, without bringing the profit-seeking temple down in ruin on men’s heads. Wilderness therefore, as a symbol of all in the human aspiration and caring which holds itself out from the profit-pursuing imperative, can safely be crushed down.  One after another of the absolutism of profit-pursuit has been somewhat tamed, somewhat restrained, during the century behind us.  There remains Wilderness, as a fact and an aspiration: Wilderness, which by its very definition says to the money-profit motive: You shall not enter here.

We might ask ourselves whether we would have the same impulse to stop economic growth were it not for all the preservation and conservation that has heretofore taken place.

I don’t think there’s any question that the form the preservation movement has taken has been historically conditioned.  Preservation has functioned on the basis of setting aside wild places and otherwise leaving the economic engine of capitalism in place. No one would disagree with the fact that we’ve reached a different historical moment where those involved in preservation and conservation need to be more vocal about ending an economic arrangement based on growth.  In fact, the limits to this historically specific preservation strategy have been understood for quite some time.  In the mid 20th century Aldo Leopold makes a “plea for the preservation of some tag-ends of wilderness, as museum pieces, for the edification of those who may one day wish to see, feel, or study the origins of their cultural inheritance.”  Clearly he understood the limitations of this approach.  Yet it is one thing to acknowledge this and another to claim, as Murray does, that if our energy “to save the environment piecemeal had been put into lobbying for a steady state economy, development pressure everywhere would have ceased, and habitat would be safe everywhere.”  Tom Butler is right, “there is no way to prove or disprove this opinion,” but I would offer that history tells us that preservation has made a remarkable difference, not only in the integrity of that which has been preserved, but also in extending a cultural ‘habit of thought’ and cultivating a wilderness ethos.

Tim Murray is correct in his sense that if we can’t stop the growth machine we are going to lose the war.  But as Tom Butler points out, what we preserve can at least provide “the seedbed of recovery for wildness to begin the long dance of evolutionary flowering again after this dark episode of human-caused extinction.”  And ending our efforts to preserve and conserve would be, as Butler also tells us, “an ethical breach with our fellow members of the biotic community.”   We stand a much better chance of winning the war by our preservation and conservation efforts, by retaining something of the pulse of the wild places on earth.  In the shadow of these places we continue to cultivate an awareness of limits and can at least measure the extent of our loss.  In a world where the when-to- stop rule is vague, these are not insignificant contributions to changing our path.

I would also add that we seem to have made little headway in our economic discourse on the issue of ending growth.  I doubt very seriously this has had anything to do with the time and energy spent on conservation and preservation. In fact, it’s likely that the efforts at preservation and conservation have had a more profound influence on our thinking about the limits to economic expansion than anything else has.  Rather than target our frustration about the lack of movement on the no-growth front at the conservation movement, we might do better to analyze why so little progress has distilled from our no-growth rhetoric.

I have no doubt the historical moment has arrived where the preservation movement needs to speak out more explicitly about the problem of economic growth in an effort to save what is wild.  But it is equally important that those who speak out against economic growth bring the loss of the wild and the need for a healthy human ecology to a central and pivotal focus in their discussions of scale.  No-growth discussions about optimal scale don’t elaborate on how much of what is wild should remain wild, instead, these discussions deal in the vague world of costs and benefits and promoting development without growth. These discussions evaluate whether we’ve gone beyond an optimal scale when “the cost to all of us of displacing the Earth’s ecosystems begin to exceed the value of the extra wealth produced” or when the benefits of growth are overshadowed by the costs. Without greater clarity on the true meaning of development and optimal scale we no-growth advocates might succeed in orchestrating a perfectly domesticated steady-state world, where we are all half crazy for want of a diverse and magical external world to resonate with our genome and our psyche.

Lisi Krall is a professor of economics at the State University of New York at Cortland, a member of CASSE’s executive board, and the author of Proving Up: Domesticating Land in U.S. History.