Tag Archives: economics: capitalism

Chart of the Week: Big Pharma Spends More on Marketing than Research

Pharmaceutical companies say that they need long patents that keep the price of their drugs high so that they can invest in research. But that’s not actually what they’re spending most of their money on. Instead, they’re spending more — sometimes twice as much — on advertising directly to doctors and consumers.

Data from the BBC, visualized by León Markovitz:

2“When do you cross the line from essential profits to profiteering?,” asked Dr Brian Druker, one of a group of physicians asking for price reductions.

Lisa Wade is a professor of sociology at Occidental College and the co-author of Gender: Ideas, Interactions, Institutions. You can follow her on Twitter and Facebook.

Designing for Profit: On “Instructions for Use”

Flashback Friday.

When companies offer instructions as to how much of their product to use, what do you think drives their decisions as to what advice to give?

Theory 1:  They give the best advice.

Theory 2:  They give reasonably good advice, erring on the side of you using more product versus less.

I’m with Theory 2.  The quicker you go through their product, the more frequently you have to purchase it, and the richer they get.  So they have an interest in your over-using their product.

Dan Myers agrees.   He put up a great example of this on his website, Blue Monster. He writes:

When you buy laundry detergent these days, the cap usually serves as a handy measuring cup… Now, if you were a company that wanted to get people to use it up as fast a possible (read: waste as much of it as possible) so you could get some more out of them, what would you do? Well, having a devious mind myself, I’d make the cup bigger that it needs to be hoping people would consistently use more than they need. Especially given that people are more likely than not to fill the cup up to the top.

And that is exactly what you get on with the TIDE packaging. The cap, shown here, has three measuring lines in it: 1, 2, and 3. All of these are significantly lower than the top of the cap.

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Furthermore, if one actually takes the time to read the instructions on the bottle, the 1 line is for “medium” loads, the 2 line is for large loads, and the 3 line is not even mentioned!!!

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Why is it there if it isn’t mentioned? I say that it’s because for those who actually look at the cup instead of just filling it up, they want to give you the impression that 1 is small, 2 is medium, and 3 is large–thereby getting you to use more than necessary every time you launder. Scam Masters!!!

In another illustration, Myers videos himself brushing his teeth with the liberal swirl of toothpaste seen in your average advertisement. The result is a hilarious excessive frothing. A blob of toothpaste the size of a pea is likely sufficient for most of us, but toothpaste companies would probably prefer that you overdo it.

Relatedly, I’ve always been suspicious of how gas stations order the gas by quality/expense. Sometimes it goes cheaper on the left to expensive on the right, which is what you’d expect because we read left to right, but sometimes it’s reverse. Do people sometimes hit the far left button, assuming it’s the cheap gas, and accidentally spend more than they have to? I bet they do.

There must be hundreds of examples of this kind of trick.

This post originally appeared in 2009.

Lisa Wade is a professor of sociology at Occidental College and the co-author of Gender: Ideas, Interactions, Institutions. You can follow her on Twitter and Facebook.

The Environmental Costs of Valentine’s Day Roses

Flashback Friday.

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An article at Scientific American draws attention to the environmental cost of the commodification of flowers as a symbol of love.  Carolyn Wheelan writes:

[Roses] are… fragile and almost always flown to the U.S. from warmer climes in South America, where roughly 80 percent of our roses take root; to warm the hearts of European sweethearts, they are most often imported from Africa. They are then hauled in temperature-controlled trucks across the U.S. or the Continent and locked up overnight in cold boxes before their onward journey to the florists of the world… sending the roughly 100 million roses of a typical Valentine’s Day produces some 9,000 metric tons of carbon dioxide (CO2) emissions from field to U.S. florist.

When flowers aren’t shipped in to cooler climates, they must be grown in greenhouses, like the Yuzhny Greenhouse Farm in Russia pictured above.  Some flower farms take the form of vast arrays of greenhouses that use energy to maintain a microclimate out of synch with the climate in which they are situated.

The SciAm article does a good job of pointing out that not all flower farms are equal and there are lots of more and less environmentally- and socially-conscious choices.Fair trade, worker-conscious, organic, and otherwise environmentally-friendly flower companies claim to offer an alternative.  Florverde, for example, advertises its flowers as “for the earth, for the workers, for you”:

Originally posted in 2009. h/t Jezebel.

Lisa Wade is a professor of sociology at Occidental College and the co-author of Gender: Ideas, Interactions, Institutions. You can follow her on Twitter and Facebook.

Love, Business, and Valentine’s Day in Pakistan

On Valentine’s day last year, my Facebook feed exploded with Pakistani memes that, on the one hand, used Islamic texts to criticize the day as unIslamic and, on the other, poked fun at the religious opposition to the holiday.
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When I conducted interviews with Pakistani women in Karachi over the summer, I expected Valentine’s day to be a salient event for my participants.  I did find religious resistance to Valentine’s Day.  The more religious-minded participants  were likely to say things like: “St. Valentine is remembered for fathering illegitimate children, so the day is sinful.”

Less religious women, however, seemed surprised that I even asked about it.  “I can’t remember what I did,” they would say, or they would criticize it as “cheesy” or  “too commercial.” A few respondents asked: “Why does there have to be one day for love? Every day should be a celebration of love.”

Based on the media, I was expecting a contest between people who embraced Valentine’s Day and people who rejected it, but I only found one side of the debate: the rejection.  There didn’t seem to be a large group of women who embraced it. Among those who didn’t outright reject it, I discovered only disinterest.

All this suggests that the push to make Valentine’s Day a thing in Pakistan is more about capitalism and the globalization of Western norms and practices, than it is about a grassroots desire for such a celebration.  It is the marketers, mall managers, and restaurant owners that seem most interested in Valentine’s Day.  I originally thought of this as a battle between the religious and secular members of the society, but it seems to be, instead, a resistance by some to efforts of companies to find one more way to make money.

Fauzia Husain is a PhD student in sociology at the University of Virginia.  She is currently studying globalization through an exploration of Pakistani women’s narratives about love.

A Haunting Illustration of Work Under Capitalism

Karl Marx argued that capitalist modes of production always involve the exploitation of the working class by the owning class. The owning class are the capitalists. They secure the means of production — the factories, tools, and machinery — and employ workers to use those resources to produce goods.

When these goods are sold, capitalists extract the surplus value. This isn’t an magical good that blinks into existence thanks to the Capital Fairy, it’s a concrete good derived directly from the exploitation of the working class. Surplus value only exists when workers are paid less than the value they added with their work. If they were paid as much as their work was worth, capitalists would break even. And that’s not what they have in mind.

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In other words, if capitalists paid workers what their work was actually worth, there wouldn’t be any profit left to skim off the top, leaving the rest of us with a value deficit.

More comics at A Softer World.

Lisa Wade is a professor of sociology at Occidental College and the co-author of Gender: Ideas, Interactions, Institutions. You can follow her on Twitter and Facebook.

Chart of the Week: 1,500 Estimates Suggest a Higher Minimum Wage Will Have No Effect on Jobs

One of the arguments against an increase in the minimum wage is that it will lead to higher unemployment.  One can make theoretical arguments for and against this proposition.  And, of course, the income gains from an increase in the minimum wage are likely to produce overall benefits for both low wage workers and the economy as a whole even if there is a rise in unemployment.

Economists have tried to estimate the employment effects of a rise in the minimum wage.  As a Vox article describes, two of them, Hristos Doucouliagos and T.D Stanley, looked at almost 1,500 estimates of the effects of minimum wage increases on employment and found that the estimates “clustered right around zero effect, but with more of those estimates showing a slight downward pressure on employment.”

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They concluded, “with sixty-four studies containing approximately fifteen hundred estimates, we have reason to believe that if there is some adverse employment effect from minimum wage rises, it must be of a small and policy-irrelevant magnitude.”

Originally posted at Reports from the Economic Front.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

SI Review: Rudolph the Red Nosed Reindeer

Sure to be a classic!

The tale begins with a baby calf named Rudolph born to what is assumed to be a typical reindeer family.  Immediately we recognize that this is no typical Hollywood tale. As we all know, male reindeer lose their antlers in late fall, but female retain throughout the Christmas season. By making Rudolph, Donner (the head of the family), and all of Santa’s reindeer female, the film makes a strong departure from the androcentric status quo.

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The new baby girl fills the house with joy until the parents discovered the calf to be quite queer—Rudolph had a red nose that glowed. Initially ashamed, Donner drew on a very functional and literal cover-up of mud and clay to hide the nose. It is believed this was for the good of the calf as this story was set in a pretty cruel place—a place where even Santa was unkind and unaccepting of differences.

Spring training comes along with masculinity classes for Rudolph. This was a highlight of the story for me. It was nice to see time was taken to demonstrate that gender is socially constructed and masculinity is learned. Girls can do anything that boys can do and our young protagonist was exceptional, even best in the class.

However, the mud and clay would be an impermanent fix. Rudolph’s glowing nose was revealed during play and the names and bullying began. In fact the bullying was even legitimated by the coach. With such an unaccepting family and community, Rudolph runs away.

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Meanwhile, in (one of) Santa’s workshops, an elf named Hermey was having a Jerry McGuire day. Hermey, perhaps the most relatable character to mainstream American society, was questioning the system. Hermey wanted to do what made him happy. He wanted to be a dentist. Working in an assembly line factory with long hours and no dental was not living the dream. Hermey decides he is a Dentist and also sets out alone.

Unsurprisingly, Rudolph and Hermey run into each other on the path out of town, also called loneliness. After a day in the polar wilderness they meet another queer named Yukon Cornelius who is always in search of gold or silver.

The three misfits then encounter the abominable snow monster. “Mean and nasty,” he “hates everything about Christmas.” Clearly, his teeth and wide reaching claws are designed to compel compliance with the social order.  White, male, and against magic for the masses, this character is clearly intended to represent the kyriarchy, the system meant to uphold the intersecting oppressions of class, race, and gender. The movie’s central challenge is set: smash the kyriarchy.

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The group initially retreats, only to find themselves on The Island of Misfit Toys where they are greeted by a flamboyant Charlie-in-the-box. It is here Hermey and Rudolph begin to dream of having an accepting place and we see the strong desire for a community. Surely, if dolls with low esteem, pink fire trucks, and trains with square wheels can be free of oppression, they can too.

Emboldened, the trio now returns to kill the kyriarchy. Using the never fail logic that bacon trumps all meats, Hermey makes like a pig to get the abominable snow monster’s attention. Once the snow monster steps out of the cave, Yukon knocks him out by dropping a boulder on his head; Hermey pulls out all his teeth in a symbolic and literal de-fanging.

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Yukon pushes the monster off a cliff, but he falls, too. This is the most symbolic part of the tale, as the group has bonded together to kill the kyriarchy but not without some loss. The message is clear: if we build alliances, we can take down the power elite, but there will be sacrifices.

I will not ruin the end of the tale for you, only to say that Rudolph does in fact save Christmas, but it is by demonstrating value to the man—Santa. Once Santa sees Rudolph and his misfit friends as an asset he de-identifies at least slightly with the kyriarchy. For now, Christmas town was a cheerful place. A small battle had been worn.

Overall, Rudolph the Red Nose Reindeer gets two thumbs up!

It is sure to become a classic tale of systems of oppression and privilege, stigma, and the struggle for self-acceptance. In Rudolph, difference can be good. It was quite progressive with its message advocating inclusivity, alliance, and dissent against systems of power. I love the commentary on the lack of queer community organizing and the role of misfits in fighting capitalism and the power elite. It took on some hot button issues in nuanced ways, especially the policing various classes of citizens and the importance of open carry laws.

It also took some big risks related to casting. It was gender progressive and, outside of the binary, we have at least two characters that blur sex categories. Clarice, for example, presents as feminine and female pronouns are employed with her, yet she has no antlers in late winter. While Hermey dresses like the male elves, but he has swooping blonde hair and a small nose like the female elves.

For years to come, Rudolph will no doubt be a wonderful conversation starter for both awkward and fun winter gatherings alike.

D’Lane R. Compton, PhD is a lover of all things antler, feather, and fur. An associate professor of sociology at the University of New Orleans with a background in social psychology, methodology, and a little bit of demography, she is usually thinking about food, country roads, stigma, queer nooks and places, sneakers and hipster subcultures. You can follow her on twitter.

Inequality in the Skies: Applying the Gini Index to Airplanes

I’m on a plane right now, flying from Sacramento back to Albany. And sitting here I’m reminded of how air travel itself reflects the growing inequality of society in a trivial, but suggestive, way.

Planes have always had first-class and passenger cabins, at least as far as I know. If the Titanic had this distinction, I’m guessing it was in place from the beginning of commercial aviation.

But for most of my adult life, planes — at least the ones I usually fly on, from one U.S. city to another — looked something like this:

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Just roughing it out here, this means that 7% of the passengers used about 15% of the room, with the other 93% using 85% of the cabin space. Such a plane would have a Gini index of about 8. The Gini index is measure of inequality, a fancy statistical way of representing inequality in the income distribution of a country’s population. For reference, the U.S. Gini is about 48, and the global one is around 65.

Domestic airlines have pretty much moved to a three-tier system now, in which the traditional first-class seating is supplemented by “Economy Plus,” in which you get an extra three or four inches of legroom over the standard “Economy” seats. I, as usual, am crammed into what should really be called “Sardine Class” — where seats now commonly provide a pitch of 31”, a few inches down from what most planes had a decade ago.

In today’s standard U.S. domestic configuration, the 12% of people in first class use about 25% of the passenger space, the 51 people in Economy Plus use another 30%, leaving the sardines — the other 157 people — with 45%. That gives us a Gini index of about 16.

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Transatlantic flights, however, are increasingly taking this in-the-air distinction to new heights. Take, for example, the below United configuration of the Boeing 777. It boasts seats that turn into beds on which one can lie fully horizontal. United calls this new section of bed-seats “BusinessFirst.”

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Unsurprisingly, though, these air-beds take up even more space than a nice comfy first class seat. So if we look again at how the space is distributed, we now have 19% of the people using about 35% of the plane, 27% using another 25%, and the final 52% using the last 40%. The Gini index has now increased to 25.

It’s not often you see such a clear visual representation of our collective acceptance of the right of a small fraction of people to consume a very disproportionate percentage of resources. I wonder how much of the shift is actually driven by increased inequality, as opposed to improved capacity for price discrimination.

And it’s also worth noting that the plane above, while unequal relative to the old-fashioned three-rows-of-first-class-and-the-rest-economy layout, is still nowhere near the inequality of the U.S., or the world.

Elizabeth Popp Berman, PhD is an associate professor of sociology at the University at Albany.  She is the author of Creating the Market University: How Academic Science Became an Economic Engine and regularly blogs at OrgTheory, where this post originally appeared.