Marco Arment comments smartly on this NYT story describing the arrangement among stores like H&M and Wal-Mart and their suppliers, whereby the suppliers give stores credit for unsold products and instruct stores to destroy the items instead of sending them back:
It’s unfair to criticize these two companies for a practice that’s incredibly common in the entire industry, spanning nearly every product category and nearly every major retailer.
The wastefulness of this is disgusting, but I’m not sure who’s really at fault, if anyone. When you consider the entire story, rather than the narrow view presented by a sensational, low-information New York Times article, it’s hard to come up with a better solution that’s realistic, practical, and economical for the involved parties.
If we take levels of consumption in the United States as normative, then no, there probably isn’t a realistic alternative. But you don’t even need to be all that far on the left to think that any economy whose health is dependent on untenable perpetual rates of consumption is a poor candidate for normative standards of behavior. The wastefulness of the credit-and-destroy arrangement is obvious, but why does the absence of an obvious at-fault party vindicate that arrangement? Surely there are such things as economic institutions and economic structures, some of which are more or less wasteful (and more or less just) than others.
The problem isn’t that Wal-Mart’s suppliers don’t want to pay to have unsold clothes shipped back to them, or that Wal-Mart ruins perfectly usable clothes. Under the circumstances, both parties are probably acting reasonably. The problem is that ours is a constitutionally insatiable economic system and, to the extent that we participate in it, we consume far too much, paying only a fraction of the real-world costs of our choices. “Externalities,” the bloodless abstracta of economists, are the costs or benefits of a given transaction that aren’t priced into it. Instead of treating them as overlooked incidentals, however, maybe we should think about our economic system as crucially dependent on some externalities never being priced in. True energy, environmental, and labor costs, on this view, aren’t reflected in our prices because they simply cannot be if status quo commerce is to continue.
The great hope for American economic recovery is that consumers will resume their epic consumption, which will spur job creation, lending, home-buying, and perhaps even result in bank solvency. To succeed, we literally need to convert the resources of the world into capital – capital that can be lent to us to permit our continued economic digestion. But the financial crisis has only made plain our longstanding need. Long before the “vampire squid” metaphor crystallized people’s suspicions about the relationship of finance capitalism to the real economy, a certain someone else used vampirism to characterize the relationship of the “real economy” to the real people who comprise it: “Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks.” Instead of blaming Wal-Mart, or clothing manufacturers, or consumers, we might think twice about the incessant consumption on which American capitalism is predicated. If the United States manages to borrow itself back into vitality, we might come to regard ourselves again as the eternal, angelic “shining city upon a hill” of recent political mythology. But vampires live forever, too, and eventually we’ll run out of warm bodies.