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But surprise, a lot of that air pollution is coming right back at us, carried by wind currents.
37
Distribution
So, what happens after all these resources are turned into products? Well, it moves here, for distribu-
tion. Now distribution means “selling all this toxic contaminated junk as quickly as possible.” The goal
here is to keep the prices down, keep the people buying and keep the inventory moving.
How do they keep the prices down? Well, they don’t pay the store workers very much
38
and skimp on
health insurance every time they can. It’s all about externalizing the costs.
39
What that means is the real
costs of making stuff aren’t captured in the price. In other words, we aren’t really paying for the stuff
we buy.
37 “North America has been sprinkled with a dash of Asia! A dust
cloud from China crossed the Pacific Ocean recently and rained
Asian dust from Alaska to Florida.” Excerpted from The Pacific
Dust Express, in “Science @ NASA,” May 17, 2001: http://sci-
ence.nasa.gov/headlines/y2001/ast17may_1.htm; and “U.S. Gets
More Asian Air Pollution than Thought” on UC Davis News and
Information, July 19, 2005; http://www.news.ucdavis.edu/search/
news_detail.lasso?id=7415&title=U.S.%20Gets%20More%20
Asian%20Air%20Pollution%20Than%20Thought; and “Evidence
suggests a substantial Asian impact on both North American air
quality and regional radiative forcing, based on several factors: the
prevailing winds aloft blowing from the west, recent observa-
tions of trace gases and dust over North America, and numerical
simulations of transport and chemistry.” In Determine the Impacts
of Asian Emissions on North America; http://www.gfdl.noaa.gov/
aboutus/milestones/asian_emissions.html.
38 For example: “CEO Compensation 871 times as high as U.S. Wal-Mart
Workers, 50,000 times as much as Chinese Workers” from Wal-Mart’s
Pay Gap by Sarah Anderson, Institute for Policy Studies, 2005.
39 Earth Economics (eartheconomics.org) defines an externality as:
“Externality: An unintended and uncompensated loss or gain
in the welfare of one party resulting from an activity of another
party.” Another way to explain this is that there are many real costs
of producing things (like using water, dumping waste, contributing
to climate change, paying sick worker’s medical care) which are
incurred by producing things, but are ignored by the company
owners. Since the company owners don’t pay for these real costs,
but shift them onto the public and the environment, they are said
to “externalize” them which means making someone else pay
for them. That is what I mean when I say that the prices of many
goods don’t reflect the true cost of making the things. Someone
else is paying for the doctors bills, the longer hike to get water
after local water is polluted or gone, the impacts of climate
change, the cost of the asthma inhaler and more costs incurred
from the extraction, production, distribution and disposal of stuff.
See also the following excerpt from David Korten, When
Corporations Rule the World, (1995): “If some portion of the cost
of producing a product are borne by third parties who in no way
participate in or benefit from the transaction, then economists
say the costs have been externalized and the price of the product
is distorted accordingly. Another way of putting it is that every
externalized cost involves privatizing a gain and socializing its
associated costs onto the community.
Externalized costs don’t go away—they are simply ignored by
those who benefit from making the decisions that result in others
incurring them. For example, when a forest products corporation
obtains rights to clear-cut Forest Service land at give away prices
and leaves behind a devastated habitat, the company reaps the
immediate profit and the society bears the long term cost. When
logging companies are contracted by the Mitsubishi Corporation
to cut the forests of the Penan tribes people of Sarawak the corpo-
ration bears no cost for devastating native culture and ways of life.
Similarly, Dow Chemical externalizes production costs when it
dumps wastes without adequate treatment, thus passing the result-
ing costs of air, water and soil pollution onto the community in the
form of additional health costs, discomfort, lost working days, a
need to buy bottled water, and the cost of cleaning up what has
been contaminated. Wal-Mart externalizes costs when it buys from
Chinese contractors who pay their workers too little to maintain
their basic physical and mental health or fail to maintain adequate
worker safety standards and then dismiss without compensation
those workers who are injured.
When the seller retains the benefit of the externalized cost, this
represents an unearned profit—an important source of market
inefficiency. Passing the benefit to the buyer in the form of a lower
price creates still another source of inefficiency by encourag-
ing forms of consumption that use finite resources inefficiently.
For example, the more the environmental and social costs of
producing and driving an automobile are externalized, the more
automobiles people buy and the more they drive them. Urban
sprawl increases, more of our productive lands are paved over,
more pollutants are released, petroleum reserves are depleted
more rapidly, and voters favor highway construction over public
transportation, sidewalks, and bicycle paths.
Yet rather than demanding that costs be fully internalized, the
corporate libertarians are active advocates of eliminating govern-
ment regulation, pointing to potential cost savings for consumers