Tuesday, 28 November 2017

Don't buy what the system is sells

“While modern capitalism constantly develops new needs in order to increase consumption, people’s dissatisfaction remains the same as ever. Their lives no longer have any meaning beyond a rush to consume, and this consumption is used to justify the increasingly radical frustration of any creative activity or genuine human initiative — to the point that people no longer even see this lack of meaning as important.” -Canjuers

When you buy something, you most likely simply think of your money as mainly going to cover the production cost of the product you are buying. This is likely out of a sense of fairness of what the value of something should be derived from. However, this is quite far off from the truth. In reality, only a small portion of the price of something goes to cover the cost of making it. The majority of what you pay goes to a collection of persons that didn't involve in the production at all.

Here is a list of several of the other things you are paying for when you buy something at a store:

1) All the advertising that worked to influence you to buy it. (If you weren't yourself exposed to the advertising, then you are still paying to expose countless other people you don't know to the advertising. For example, when you buy a fast food meal, you are paying for someone in front of their television somewhere to see a commercial for that fast food meal. Is that really how you want to spend your money?)

2) The rent to the landlord who owns the commercial property which is being leased out to the store you are buying the product from. (This person of course did nothing to produce the product, but you need to help pay for his new luxury SUV nonetheless)

3) Dividends to the shareholders who own stock in the company you bought the product from, or who own stock in the manufacturer of the product (These moneyed traders did nothing to make the product)

Now let's look at the setup of the manufacturer of the product themselves. Usually, only half or less of the staff actually make the product. It would be great if the production staff could self-organize and self-manage, negating the need for management. It would also be great if the product was of enough real value to people that it doesn't need massive sales and marketing efforts to get people to buy it, but usually it does. Here is an example of an existing craft brewery in Canada, which shows that only 28% of the staff are involved in the actual production of the beer (along with the supply chain and quality assurance, the percentage is still only 44%, less than half). So when you buy a beer, over half your money is going to sales, accounting, and other non-brewing related jobs.

The above 44% of money that goes to actual production gets diluted down much further when the retail aspect is taken into account. The beer is sold nationwide, and is thus transported over massive distances. As beer is liquid, it weighs about 1 Kilogram per 1 Liter, making it very carbon intensive to move by internal combustion engines. When you buy the beer, you are paying for all that transportation, which can be measured in carbon-miles. Finally you pay for the all aspects associated with the retailing, including your own transportation costs to get there and back.

Compare this system with buying a beer a couple hundred years ago. A couple hundred years ago, you would walk down the street to the local brewpub, buy the beer directly from the brewers who did there own bookkeeping, and no marketing was required it was simply natural to buy the beer of your local community. The current system, by comparison has no much massive waste and unnecessary involvement from so many people. So how does the current system manage to work? Two things: 1) Increased production due to technology, whereby beer can be brewed on a larger scale due to automation of the process (It appears that for every one job saved in production by automation, about two jobs are created in non-production roles such as marketing and accounting. 2) Job specialization, whereby workers must educate themselves in one particular field, whereby they invest so much in that role that they can never switch positions, even if they want to (Example: Someone studies for many years to be an accountant. After being an accountant at the brewery for a while, they decide they want to involve in the actual brewing. They won't be able to make this shift, because they need to keep earning at the maximum they can to pay off their student loans and maintain their standard of living, as switching to a new role that they don't have specialized education in invariably would lead to a smaller pay cheque, and 3) Easy availability of fossil fuels. So, it appears that for every one job saved in production by automation, about two jobs are created in non-production roles such as marketing and accounting. Also, the fossil fuel use is not sustainable and is super-heating the planet. The system may work by its own internal logic, but it has enough flaws to make it clear that it is not an ideal system. So what is a better system?

What can you buy that doesn't involve a massive system where only a fraction of your money goes to the actual product? A good example is a local farmers' market.  Buying food directly from a local farmer cuts out the middle-men positions (the registration fee for most setting up a table at a farmer's market is usually fairly minor), and thus gives the farmer the best share possible, which seems to be the most fair way to distribute from the cost of the product. There aren't too many other selling arrangements similar to farmers' markets, but by seeking them out, your money can be spent more fairly, and some wind can be taken out of the system's sails.

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