Tag Archives: Politics

Here is a term used in economics, “externalities”. It means costs incurred as a result of running a business that are not picked up by the business, but by those living in the communities in which they operate.

A simple example is water pollution caused by pouring untreated factory waste into rivers, causing illness, increasing burdens on health services, affecting work attendance and reducing incomes of the afflicted and family members drawn into their care and support.

Cigarette smokers, whilst suffering from addiction, often choose to smoke and some justify the health burdens they impose on their families and communities by buying into a belief that the direct taxes they pay on cigarette purchases more than compensate for any health treatments required resulting from tobacco smoking.

Again this argument ignores the emotional and economic pain incurred by non-smokers who love and care for them, as well as the illnesses and disabilities imposed through secondary smoking, particularly on children, including pre-natal babies.

Another argument to justify smoking is perpetuated along the lines of personal freedoms and the concept of individual liberties. This argues that freedom to smoke is a choice that adults should be able to make, but the logic is not extended to acknowledge the known addictive properties of cigarettes, nor the imposition of polluted air, health problems, suffering of bereavement resulting from this “free choice” on those who do not have that choice, (children), or those who choose not to smoke, (fellow citizens, family and friends). It also fails to recognise the lying and deceptions systematically carried out by the managers of tobacco firms around the world.

The taxes paid directly by smokers raise cigarette prices at the point of purchase, but corporate tax laws allow the multinational corporations and their shareholders to continue to profit relentlessly from the manufacturing process. Which is why courts apply huge fines on the corporations challenged by group actions in the USA and Canada in order to penalise the cynical profiteers.

We know smoking kills; slowly, painfully, distressingly and expensively. This is written on packets around the world along with clear images of the ghastly health issues brought about by smoking. Despite this customers continue to queue to buy cigarettes. In the UK queues for treatment at hospitals are growing and no one calls to ban cigarettes and smoking despite the externalities imposed by this industry’s operations on the NHS.

Finally, today’s news unveils an horrendous story. In Delhi a deadly factory fire has killed “dozens.” Companies choosing to use low wage labour in loosely regulated or un-regulated economies to produce machine parts, clothing, household products and handbags, (in this instance), are doing so to improve profitability in wealthy, consumer-based nations where the customers live.

The corporations making the choice to source manufacturing in low wage economies are simply shifting the burden of employment costs directly onto the workers in these places. Low wage means: wage slavery (not enough income to risk time off for the fear of being unable to feed a family); it means no pension; it means no factory safety standards; it means no personal protection equipment for workers; it means the costs of production are externalised and carried on the backs of the lowest paid people the companies can find. This is so that we in the UK, for example, can get low price products that feed into our consumption-oriented world.

If the people in India, in this case, were paid properly, worked in safe environments, had health cover and pensions, they would not be so cheap to employ and the comparison to more local production sites would be more equitable. The Indian economy would have to move to a healthier, more sustainable and more independent model.

Of course this would change the economics of the globe. Would that not be a good thing? Could we not move to economies in which people have local work in sustainable businesses, regulated by the communities in which they operate?

https://www.theguardian.com/world/2019/dec/08/delhi-fire-india-factory-dozens-dead

In writing the above I recognise that the Conservative Party in England is pushing to de-regulate the economy there to push the externalities of all goods and services onto the backs of UK resident workers and their families, whilst the rich get richer through lower costs of production and higher corporate profits and shareholder dividends. They dream of an “Off-shore Singapore”.

I refer you back to my earlier post Fat Blond Bloke.

I also refer you to Naomi Klein’s book, No Logo.

CLP 08/12/2020