Tuesday, June 26, 2012

What Price of Cheap Products from China/Elsewhere

Extinction of the Galapagos tortise prompt me to write this. More of economist Graeme Maxton's wisdom:

"Modern economics has allowed almost all of us to ignore the costs of our damage to the planet. Yet we all have a responsibility for our world as well as to other species, in whatever form they live. This is partly our moral responsibility as the most intelligent form of life to have evolved. There are also scientific reasons for us to behave more responsibly. We are killing off hundreds of species of plants & animals without understanding the value of their ecosystems. Potential cures for diseases are literally going up in smoke for the sake of a one-time gain, to allow some logger or corrupt official to acquire a Rolex"- Graeme Maxton

China being known as the workshop/factory of the world is known for its abundance of cheap labor. We love low prices & few people are even aware of the consequences of low prices. As with the craze over mobile phones such as iphones, do people need to change their cellphones every so often when old one is still working? How many chargers & batteries gonna end up in landfills or incinerated giving off toxic fumes?

Graeme Maxton:
When a factory making plastics in China releases its toxic waste into a river, it does not include the cost of its actions in the price it charges the consumer. So the plastic is cheaper than it should be. People who buy the plastic are being subsidized by those living downstream, who pay part of the cost for it with their ill health. Dead fish & poisoned acquatic life pay part of the cost too, as do the oceans into which the river flows.

In classical economics, the plastics manufacturer is said to receive 'unearned' profits as a result of its action. A gain is made when it should not. Theory says that this is inefficient & therefore wrong. Moreover, the consumer of the plastic benefits unfairly too. A lower price is paid than it should be. This gives the consumer an unearned gain & because the product is cheaper than it should be, an incentive to use more.

Maxton sums up why i loathe the over-consumerism culture infesting this tiny island. Is also why i loathe the current ruling regime mentality of grow gdp at all costs like cancer approach.

"We measure progress in terms of growth, which depends on consumption, which needs us to use up more of the world's resources, which is dependent on externalizing costs to cut prices. Yet most of us feel no sense of shame for having allowed this, nor do we accept that we have a responsibility for creating the injustices that have ensued. We need to realize that every bar of soap we buy made from palm oil is adding to the problem"-Graeme Maxton

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