Let us, for a moment, set aside economies of scale. Let us set aside utility functions and indifference curves, supply and demand, risk and return. There is a beguiling sense of certainty to be had from economics. Its dazzling flurry of intersecting lines and arcane derivations box reality into a series of discreet quantities, subject to its infallible metrics.
But economics is not infallible. Enthralled by its mesmerizing precision, one can easily lose sight of the reason we study economics. Economics is a powerful tool for the relief of suffering, not an arsenal of all-consuming truths meant to bludgeon the humanity out of any argument (along with the skulls of those who would doubt its righteousness).
I myself am sometimes guilty of forgetting that behind its lines and equations are people. People who suffer. People who bleed. People who go hungry and fall ill. People who die.
Nowhere is this more evident than in the developing world. Weak governmental constraints and often nonexistent regulatory prescriptions make developing nations ripe for the establishment of export processing zones. So desperate is the developing world for foreign investment that these EPZs often have no limits on the amount of pollution they can dump or emit (though pollution and unsustainable business practices are pervasive, even outside of EPZs). This pollution compromises the integrity of living systems and, by extension, impairs the ability of those within them to function.
Though production in these environments spans the full gamut of export goods, for the purposes of this article, consider only the clothes you are wearing. Chances are a significant percentage (if not all) of them were produced in a developing area. This is unsurprising, as these products tend to offer the best value.
What makes them competitive, however, are the costs their price tags fail to reflect. Pick one such garment from among those you are wearing (anything made in the third world). The emissions from the fossil fuels utilized in its production were entirely uncontrolled. The labor that produced it came from the lowest bidders, the most destitute individuals, too desperate to refuse any wage.
The chemical waste and other byproducts released in that garment's refinement were dumped in the most convenient available location, be that in a river or lake, in which people bathe or from which people drink, or in the middle of a community, to degrade the air or soil upon which its inhabitants rely in order to survive.
That garment was produced in an environment inhospitable to human life, with many workers in EPZs succumbing to fatal or debilitating injuries or illnesses.
By contrast, goods manufactured in the developed world carry price tags that more closely reflect their true cost to produce. The coalescence of strong government and civil society has yielded environmental regulations that prevent firms from saturating their environments with externalized production costs. Emissions are tightly controlled, painstaking measures are taken to safely dispose of chemical waste, the threat of fines and imprisonment safeguards our rivers, lakes, and other natural resources.
Developed markets provide wages that reflect the true value of labor and are subject to legislative constraints which prevent desperate workers from being exploited or subjected to hostile working conditions. These measures, however, are costly. The price of your aforementioned garment does not reflect that cost.
The cost you were spared when paying for that garment is a cost that was externalized to the local environment from whence it came. It fouls the air, rendering it unbreathable. It taints water, rendering it undrinkable. It renders arable land infertile, further subordinating the local populace to the employ of labor-intensive factories. It complicates pregnancies, robbing children of their potential even before they have exited the womb.
This is the cost of our consumption. This is the misery that fuels our prosperity. For those unfortunate victims of birth, every poison borne by their environment, every poison that courses through their ecosystem and, consequently, their own bodies, is a cost reduction on our merchandise, passed along to the consumer as a savings.
Some who have studied abroad have seen this firsthand. Not those of us, like me, who opted for cushy, semester-long vacations in Western Europe, but those braver souls, driven by some inexplicable compassion or desire for truth, who have subjected themselves to the desolation of the truly impoverished.
Of course, there are rational arguments to account for these circumstances, arguments I would usually champion. I could talk about labor dynamics, utility, developmental successes, or the relative value of human capital, but today, I just don't have it in me. Perhaps this fine vintage has gotten the best of me?
So let us raise our imported goblets in toast: to the sick, the hungry, the exploited, whose nightmares subsidize our consumption that we might chase the American dream. We salute you.
