economics: capitalism

Flashback Friday.

Behold, the taken-for-granted, unexceptional:

Cropped version of image by XoMEox, Flickr Creative Commons

Until last week I had never truly thought about shopping carts. I mean, I occasionally notice one stranded in an unexpected place, and as a kid I loved the occasional chance I had to push one a bit and then jump on and race down an aisle. But I read Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell, and it turns out that the story of the shopping cart is fascinating!

Way back in the day, stores weren’t like they were today. You went in and there was a long counter and you had the clerk show you the wares. If you’ve read some Jane Austen or Laura Ingalls Wilder, you’ve undoubtedly come across a scene where a clerk is showing someone bolts of cloth. That’s how things worked: almost everything was behind the counter; you told the clerk what you were interested in and they showed you your options. You haggled over the price, decided on a nice gingham, the clerk wrapped it for you, and off you went. Most retail outlets worked more or less along these lines (think of a butcher, for instance).

But if you were a shop owner interested in keeping prices down, this situation might be less than ideal. It required a lot of clerks, and experienced clerks who knew all the goods and could be trusted to set an acceptably profitable price for them, too.

Eventually retailers, including F.W. Woolworth, tried putting more products out on display in the store so customers could help themselves. Some customers liked the ability to pick items off the shelves directly, but more importantly, you didn’t need as many clerks, and certainly not such highly-paid ones, if their job was mostly reduced to ringing up the purchases at the register.

Of course, this presents a new problem: how are customers going to carry all their purchases around the store while they make their selections? Well, a basket they could carry over an arm would work. But these baskets had a downside: they didn’t hold much and they quickly got heavy.

As Shell notes, in 1937 a man from my home state of Oklahoma, Sylvan Goldman, came up with a solution. He owned the Humpty-Dumpty grocery store chain (I still remember Humpty-Dumpty!). He and a mechanic he hired came up with a cart on which two shopping baskets could be suspended. And thus the shopping cart — or, as Goldman named it, the “folding basket carrier” — was born. As Goldman suspected, people bought more when they didn’t have to carry a heavy basket on their arm. The folding basket carrier was advertised as a solution to the burden of shopping:

The only problem was…people didn’t like the new contraptions. From a 1977 interview (via):

I went into our largest store, there wasn’t a soul using a basket carrier, and we had an attractive girl by the entrance that had a basket carrier and two baskets in it, one on the top and one on the bottom, and asked them to please take this cart to do your shopping with. And the housewive’s, most of them decided, “No more carts for me. I have been pushing enough baby carriages. I don’t want to push anymore.” And the men would say, “You mean with my big strong arms I can’t carry a darn little basket like that?” And he wouldn’t touch it. It was a complete flop.

Goldman eventually had to hire attractive models to walk around the store pushing the carts to make shopping carts seem like an acceptable or even fashionable item to use.

Over time the basic design was changed to have a single basket, with a flat shelf on the bottom for large items. The baskets could also then “nest” inside each other (instead of being folded up individually), reducing the amount of space they required for storage.

The Baby Boom ushered in the final major design change, a seat for kids.

Notice in the image above how small the cart was compared to what we’re used to today. I remember as a kid going to the local grocery store, and the carts were quite small; eventually a big warehouse-type grocery store came to the nearest city and their baskets seemed gigantic in comparison. Because obviously, if people will buy more if they have a cart instead of a full arm-carried basket, they’ll buy even more if they have a bigger cart — not just because there’s more room, but because it seems like less stuff if it’s in a bigger cart. Restaurants discovered the same principle — people will want bigger portions if you give them bigger plates because it visually looks like less food and so they don’t feel like they’re over-eating.

Without enormous carts, Big Box discounters and wholesale club stores couldn’t exist. You can’t carry a box of 50 packages of Ramen noodles, 36 rolls of toilet paper, a box of 3 gallons of milk, enough soup for the entire winter, and a DVD player you just found on sale around without a huge cart.

So there you have it: labor de-skilling + marketing – stigma of feminine association + Baby Boom + profits based on increased purchasing of ever-cheaper stuff = the modern shopping cart!

I love it when I learn totally new stuff.

Originally posted in 2009.

Gwen Sharp is an associate professor of sociology at Nevada State College. You can follow her on Twitter at @gwensharpnv.

President Obama continues to press for a form of fast track approval to ensure Congressional support for two major trade agreements: the Trans-Pacific Trade Partnership Agreement (with 11 other countries) and the Trans-Atlantic Trade and Investment Partnership Agreement (with the entire European Union).

Both agreements, based on leaks of current negotiating positions, have been structured to promote business interests and will have negative consequences for working people relative to their wages and working conditions, access to public services, and the environment.

These agreements are being negotiated in secret: even members of Congress are locked out of the negotiating process.  The only people that know what is happening and are in a position to shape the end result are the U.S. trade representative and a select group of 566 advisory group members selected by the U.S. trade representative.

Thanks to a recent Washington Post post we can see who these advisory group members are and, by extension, whose interests are served by the negotiations.  According to the blog post, 480 or 85% of the members are from either industry or trade association groups.  The remaining 15% are academics or members of unions, civil society organizations, or government committees.  The blog post includes actual names and affiliations.

Here we can see the general picture of corporate domination of U.S. trade policy as illustrated by the Washington Post.

In short, corporate interests are well placed to directly shape our trade policies.  No wonder drafts of these treaties include chapters that, among other things, lengthen patent protection for drugs, promote capital mobility and privatization of public enterprises, and allow corporations to sue governments in supra-national secret tribunals if public policies reduce expected profits.

Cross-posted at Reports from the Economic Front and Pacific Standard.

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

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:

“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, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

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.

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!!!

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, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Flashback Friday.

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, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

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.

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.

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.

This comic at A Softer World illustrates this idea perfectly.

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.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

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.”

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.