The High Cost of Cheap

As I finished reading Gordon Laird’s new book The Price of A Bargain:The Quest for Cheap and the Death of Globalization news reports began to filter in on my computer’s ticker about a new oil spill in the San Francisco Bay. Apparently the spill came from a tanker and had covered approximately three miles by the following day. Unfortunate in its timeliness as far as my reading of the book went, the spill illustrated rather succinctly one of the multiple dangers of a world built around the consumer’s desire for inexpensive products. It’s a world where the only ideology is profit and where those profits are made by driving down prices which entails driving down labor and other production costs. It functions best where there are governments willing to assist the megacorporation in doing exactly that. To start with the most obvious. under the tyranny of the neoliberal market, the US government reinvented itself to serve the needs of global capitalism while the communist-in-name-only regime in Beijing handed over its people and environment to that same marketplace. The result of these bargains made by the respective governments are the story Laird tells.

9780230614918Laird begins each section with an anecdotal tale about some aspect of capitalism’s globalization process and those it affects. From the big box shoppers in North America and Europe to the manufacturing centers of China and from the massive ports of Los Angeles to the homeless individual displaced by the corporate race to the bottom, the narrative describes the nature of these phenomena. The reader is introduced to the health problems suffered by those near the factories producing cheap goods and the increase in the incidence of asthma in the ports cities of Los Angeles county. All of this is backed up with statistics and reportage that proves over and over again that the situation Laird describes is not isolated, but the norm. The economic fallout is presented as well. Laird is spot on in his description of the collusion between capitalist and government to lower wages, purchase materials on the cheap, create an economy based on debt and the transfer of debt and ignore the consequences. He describes how that collusion puts people out of work, moving the responsibility for their welfare onto the taxpayer while the government simultaneously undoes whatever safety nets designed precisely for the purpose of helping capitalism’s castoffs. Although he never comes out and says it directly, Laird’s book provides the reader with clear and familiar examples of the shortcomings of monopoly capitalism. He describes a paradox where most national economies depend on low-cost consumerism at the exact moment that such consumerism is stumbling. Why? Because it is dependent on unsustainable factors like cheap labor, cheap transport, trade imbalances, consumer debt and cheap oil.

In addition, he describes how the very construction of the discount marketplace virtually ensures its own destruction. After all, he writes, prices can only go so low before there is no longer any profit in their selling. More importantly, as regards the current economic situation is the fact of energy resources and their consumption. In a chapter titled “All is Plastic” Laird breaks down the essential link between the price and availability of fossil fuels and the price and availability of bargain goods. From the plastic most of the goods are made from to the cheap fuel used to transport them around the globe, cheap and available hydrocarbons are essential. This means that eventually the consumer will have to accept higher prices to compensate for fuel costs or the corporation will have to decrease its rate of profit even further–something difficult to accomplish since lower rates of profits require more sales to compensate. Laird suggests that this explains why Wal-Mart and other major discounters are looking for new customers in Asia and looking to move some of their manufacturing operations closer to the source of fuel. When one considers this latter fact, the claims that the wars and occupations of Iraq and Afghanistan are about oil and natural gas don’t seem far fetched at all. After all, if those military exercises succeed in the way Washington wants them to, then the way will be open for anything Wall Street wants in that region.

Laird’s book is a fine piece of reportage on a world where the economy’s collateral damage includes oil spills and the poisoning of China’s (and other developing nations) working poor; the low wages and illegal labor practices of Wal-Mart leading to the ultimate collapse of a system based on minimizing costs, high volume sales and low profit margins; and a world where debt is the cornerstone of the economy. It is, to paraphrase Laird, a system that represents capitalism in its ultimate creative and destructive capacity. Most likely, it is also our future.

Ron Jacobs is the author of The Way The Wind Blew: A History of the Weather Underground and Tripping Through the American Night, and the novels Short Order Frame Up and The Co-Conspirator's Tale. His third novel All the Sinners, Saints is a companion to the previous two and was published early in 2013. Read other articles by Ron.

3 comments on this article so far ...

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  1. bozh said on November 9th, 2009 at 11:39am #

    Blaming solely gov’ts won’t obtain an elucidation. Blaming or evaluating the role of governance and thus the constitution in drive for profits and thus control of lower classes surely will.
    The crux of the matter, appears drive for control of other people and perpetuation of the governance or system of rule that allows or even commands that people, where all the wealth is, be used for also killing sprees.

    In short, if no wealth-money, we obtain less of cia, fbi, lying media. Also fewer generals; poorer pols; smaller army; fewer arms, etc. go figure!

  2. rg the lg said on November 9th, 2009 at 8:22pm #

    Gov’t, society … whatever … can it not simply be you and me?

    Are we, each of us, not complicit by sitting idly by?

    I think so. Will that thought change my behavior?

    No. My behavior and the behavior of all who read here will remain unchanged.



  3. thecelt said on November 9th, 2009 at 8:32pm #

    You changing your behavior has little to do with it. Its when you get together with those of your class to change collectively, that is the backbone of the thing. And people are doing it every day. Its not a matter of sitting idly by. We (well clearly not you) are starving and dying. We simply have no choice…thus we act. But dont look to the “middle class” for this action. Thier class allegiances remain steadfastly with those that would watch them ground under, just as is happening to my class right now. If you want to know what collective action looks like, go live in a poor neighborhood. Its the only way we have to survive…helping each other get things done.