Wednesday, September 27, 2006

Business Tax

Marx supposed that because supply determines cost, and cost determines profit, it was artificial scarcity that drove the economy. With the creation of a communist society, there would be a superadbundance of goods, bypassing greedy merchants and allowing humans to work on other, perhaps more noble pursuits. The market would be intentionally saturated.

Of course, sound economics resides in making sure consumer goods break down on a regular basis. Take AC delco for example. They ran some ads a few years back suggesting that if you didn't use AC delco parts, you would have to walk away from your stranded vehicle in search of help. That same year, Consumer Reports had an issue comparing car parts. By far the lowest of the batch was AC delco. I thought it was odd at the time that their ads would suggest one thing, but the real-life stats would suggest another. This is about the time I stopped watching commercials, because I was convinced that all they wanted to do was lie to me to get me to buy their products. I also read that AC delco parts are used on most GM vehicles.

If you make lightbulbs that never go out, pretty soon everyone has lightbulbs that don't go out, and would only need to replace the ones that broke. This is not enough revenue to keep a company afloat. If the factory that makes the lightbulbs is less stringent with their production methods, a higher failure rate will result. If the failure rate is high enough, the market will not be so saturated, which will keep demand high enough to turn a profit.

So people are making shoddy merchandise to keep the market stable, so what? If it were just the parts, and the parts could be refurbished/recycled, I probably wouldn't care so much. It's the packaging, the energy of production, of shipping, of all the paper pushing and product advertising in between. Ask the worker if he feels proud at the end of the day making shoddy car parts so his boss can keep paying for that GM SUV. Ask the mechanic who has to replace all these parts all the time. Ask the consumers that have to fork over money to keep these businesses afloat. Businesses excise a "tax" to keep the markets sustainable.

2 Comments:

Blogger Drunken Tune said...

There was a time I thought that businesses purposefully made shoddy goods simply because it was cost-effective. As in your light bulb example, it just costs less to manufacture bad merchandise. There's always been that other element there, but I used to think that the profit was the driving force - it's been a while since I've seen differently, the dependence on the consumer.

You make more than an excellent point. If this message got the same airtime as advertisements, there'd be a whole lot of angry pinko commies in the streets. Or there'd be a spike in blood pressure medication sales.

27 September, 2006 20:35  
Blogger Delta said...

Good point. In an economy where the means of production are communally owned and people cooperate towards goals, instead of a small minority competing for them by trying to extract the most profit for the least cost from the majority, goods would likely be of much higher quality and with a lesser environmental cost.

If the workers in the factory own the factory and can derive no profit from selling crap, then they will have every interest to make higher quality products. Not only will they have to spend less time making the same part over and over again, but they will earn the respect of their peers and the community, not to mention the self-respect of knowing that one is doing a great job.

30 September, 2006 17:07  

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