Slog Music

Music, Nightlife,
and Drinks

Friday, June 7, 2013

The Costs of Capitalism

Posted by on Fri, Jun 7, 2013 at 8:45 AM

This important sentence is in a post, "Walmart Turns Workers Into Welfare Queens," Cienna Madrid made yesterday:

Walmart's wages and benefits are so low that many of its employees are forced to turn to the government for aid, costing taxpayers between $900,000 and $1.75 million per store, according to a report released last week by congressional Democrats.

As you can see, the people who are really on welfare are not the workers but the owners (the six Waltons) who have externalized some of the costs of running that massive operation. With that in mind, let's visit the London School of Economics and listen to something the social activist Raj Patel says near the start of his lecture "The Value of Nothing":

Patel states:
Prices don't tell us much. Prices hide things. Think of a hamburger. A Big Mac goes for a pound eighty eight. But if the beef was raised on land that used to be a rainforest, the price of that burger would be nearer to two hundred dollars. There is a value that might be assigned to the eco-systemic services that are lost through transforming a rainforest into pasture. There are costs associated with the loss of biodiversity. Costs with the loss of carbon sequestration and deteriorated water cycles. All of that has costs that are hidden from us at the checkout... These costs are paid by somebody but not the McDonald's Corporation.
This is yet another reason why there is no such thing as a free market. The value of the market is not natural but fabricated. Hayek was completely wrong about prices; the information they contain is monstrously incorrect when one considers the real picture, which is always the big picture.

Ultimately, the externalization of costs is "endemic to capitalism." This is what the game is about: "squeezing out these costs."

If you are a CEO trying to keep costs down and profits up, if you do not try to externalize costs you will be fired by your shareholders.


Comments (8) RSS

Oldest First Unregistered On Registered On Add a comment
Aaron 1
Charles, please take the time to get your links right. Here's the one you meant to include:…
Posted by Aaron on June 7, 2013 at 9:31 AM · Report this
Charles Mudede 2
And you should take the time to double check my double checking.
Posted by Charles Mudede on June 7, 2013 at 9:39 AM · Report this
Aaron 3
Okay. Using an RSS reader, so I see it as you publish it, not the revised version. But thanks for catching and correcting (post RSS). (Could be I'm grumpy about something else I read elsewhere, so much bitterness around immigration and the DREAMers out there.)
Posted by Aaron on June 7, 2013 at 9:48 AM · Report this
Thank you Charles, I’ve being saying the same thing for years (though not as well) for anyone still not convinced think about the cup of coffee/can of Coke/ shot of Jim Beam you had when you woke up this morning, and then think about how it came to be in your home, and then consider how much of that was publicly funded or subsidized.
Posted by Merchant Seaman on June 7, 2013 at 10:19 AM · Report this
See this as well for an example for a big box store concluding that low wages are bad for business. Costco is at least trying to internalize their costs, and by advocating in favor of a higher minimum wage, they are looking to turn it into a competitive advantage.…
Posted by nullbull on June 7, 2013 at 10:19 AM · Report this
Posted by Timothy on June 7, 2013 at 11:22 AM · Report this

Density and expensive housing costs reduces buying power.

Density = Theft

It makes people poor.

Cities are expensive.

Suburbs are cheap.

Suburbs make poor people rich.
Posted by Supreme Ruler Of The Universe http://_ on June 7, 2013 at 11:28 AM · Report this
This is also true of global warming and the environment. Advocates of nuclear power bring up how cheap it is, but I wonder what the costs would be in the Federal government didn't pick up the tab on nuclear waste disposal.
Posted by Strangest on June 7, 2013 at 1:10 PM · Report this

Add a comment

Commenting on this item is available only to registered commenters.

All contents © Index Newspapers, LLC
1535 11th Ave (Third Floor), Seattle, WA 98122
Contact | Privacy Policy | Terms of Use | Takedown Policy