Today, I was thinknig about the several forms of "critical consumption", where for "critical consumption", I intend all the forms of consumption which respect echology, the human rights of workers, and so on.. In this last years the increase in this forms of consumption has been elevate: a share of consumers prefer buyng goods by firms who respect the human rights of workers, several enviromental parameters ("enviromental friendly firms"), and so on and so forth..
This increase in critical consumption could be seen as a parameter of how benevolent people are about enviromental problems, the violation of human rights and son on..Then, in a certain sense, with an increase of this kind of consumption, we can conclude that an higher share of population takes care about some important problems of the world..and this could be seen as a good factor of the world population..or at least as a good phenomenon!
BUT THE QUESTION IS: Is this phenomenon really good for all the consumers?
To go directly to the point, I was wondering if these forms of consumption were egualitarian or not!!!?? I mean: I was asking myself if these forms of consumption discriminate consumers or not?!
The answer is in the affirmative way!
Goods which respect some particular norms - i.e. critical consumption goods - are usually higher in price than the other goods: low income households cannot afford this kind of goods and are forced to buy the minimum price goods which are not enviromental friendly and are created without the respect of human rights..
Of Course, people can answer me:"look, this is not a real problem..if you look at the same problem from another perspective..everything change: richer consumers can afford the critical consumption goods..and if richer consumers buy those kind of goods, there is, in a certain sense, an inderect redistribution of wealth between all the population!! And this is good for everyone, also (and especially) for that consumers who cannot afford that types of goods!!!"
That's fine (if richer consumers pay more to buy critical consumption goods which give benefits to all the population, then also poor consumers will benefit..), but what does it happen if this kind of "critical consumption goods (or services)" are the only goods (services) on the market?
Fortunately, this phenomenon is not actual but there are two cases on which I would like to discuss about:
1) Impossibility to drive old cars during the enviromental Sundays (the Green Sundays) and Enviromental taxes on old cars (which not respect new pollution parameters); and
2) Possibility of regulating GMO food.
1) In Milan, people who onws an old car (which does not respect the new pollution parameters) and wants entering into the city with their cars, has to pay a specific enviromental tax.
This is a case of DISCRIMINATION between consumers: low income consumers which cannot buy a new and enviromental friendly car, has to pay taxes more than rich consumers who can afford new cars!!!???
During the "Green Sundays", a lot of cities prohibite people with old cars to drive into the city: also this phenomenon is a specific case of discrimination between low and high income consumers!!!
2) Some weeks ago, in USA, it has been decided to open the food markets to the GMO food (GMO: genetically modified organisms) without imposing firms to specify that this good is GMO. The reason used by the Food and Drug Administration to permit the sell of those goods is that the cost of production of those goods are lower than the cost of the traditional food and this would give benefits to low income consumers.
The very big problem is however an health one: even if it is not possible to demonstrate that GMO goods are worstly for health of people, it is also not possible to demonstrate the opposite: the unique method to be really sure that GMO food is good for health of people is to consume that kind of food and wainting for at least 20 years..after that time of consuming, science could be really sure about the effect of GMO food on health!!
Actually some GMO lobbies in Europe (where GMO is prohibited) want to obtain the permission to sell GMO food imposing firms to specify that this good is GMO (this is probably because GMO lobbies perfectly know that Europe will never accept to permit GMO food without specifying its provenience!!).
Some of you now is probably thinking: "Europe takes much care of health of people: even if Europe will accept to sell GMO good, health of people will be preserved IMPOSING FIRMS TO SPECIFY THAT THIS GOOD IS GMO!!!!!"
THIS IS NOT TRUE: IMPOSING FIRMS TO GIVE THE SPECIFICATION OF GMO FOOD IS ANOTHER DISCRIMINATION POLICY.
If Europe will accept this proposal, WE WILL DEAL WITH ANOTHER PROBLEM OF DISCRIMINATION BETWEEN CONSUMERS: GMO good will be sold at a lower price than the traditional food and this means that only richer consumers, who care about their health, will afford to buy traditional food, while poor consumers will be "forced" to buy GMO good!!! Poor consumers will be then treat as "laboratory animals": if 20 years of GMO food consuming will not have some influences on low income consumers health then, also richer consumers will start buying it!!!
Thus, this last is another example of how what can seem a "for health" policy, could be, in reality, a discrimination policy between consumers!!! Let's hope Europe will decide either to prohibite GMO food (which is the hypothesis I personally prefer) or to permit it without imposing any kind of specification: any consumer has the same rights (better..the same duties..) to become ill!!!
ciaooo
Domenico
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9 comments:
Domenico, your hint is a really interesting one because, as you know, choice is one of the most intriguing arguments for economists. And diversification gives to the market the possibility to maximize the utility for everyone, just because EVERYONE "CHOSES" HOW MUCH TO PAY. The obvious example is the first and the touristic class seats in airplanes or trains. But the problem of health could be used by producers for artificially raise retail prices. Secondly, the critical consumption is often affected by a "tax for charity": for what reason bio-goods should have a 25-30% if compared with non-bio-goods? Starbuck's introduced, some time ago, a fair trade type of coffee, which costed somewhat like 10 cents more than normal... it turned out to be a marketing move, because only 2 out of 10 cents were really payed to the farmers. So, whenever we want to contribute, we should require a precise table of costs.
Now, I want try and answer to your perplexities. The first one: public means of transportation are normally granted also during Green Sundays, and the sensibility to environmental problems can grow with such these initiatives also among lower classes. Anyway, I agree with your complaint. There should be less Green Sundays and more campaigns of sensibilization for smarter use of cars. One example: car sharing. We would be healthier, richer and without traffic problems (and nervous wrecks). I mean: envying rich people can be prevented by being smarter than them!
Second problem (and more serious): Antitrust should open a new inquiry about this problem, because (as I sayd before) free market could bring moral or non-directly-economic disasters...
There should be a stronger sharing of such informations, and I appreciate such these efforts. Thank you.
In a way..not properly "everyone" can choose..I woul say..only "high income consumers" have a real option..
It's interesting, however, how, in a sense, critical consumption could be considered only a matter of diversification by firms (as you told in your comment)!!! Also this does not seem so fair (from an ethical point of view..)..but, at least, with this kind of diversification a result (even if small) can be reached..(if firms diversified into critical consumption and traditional one, some qulitative standards (echological parameters, ..) are, at least, reached..this instead does not happen without this kind of diversification..)!!
Anyway I really appreciated your point on how only a small share of the raise in prices of ethical consumption can be really explained by the fact that this consumption is ethical..you have added somthing on my post!!!
A question: on which basis can Antitrust act on the problem of Green Sundays? Do you some initiatives on that?
Bye and thanks for you comment..Domenico
Uhm, I didn't mean that Antitrust Authority has to manage Green Sundays, but the problem of GMO. Unfortunately I have not a magic formula, but I'd be happy if mr. Catricalà or his foreign collegues would adopt some form of international measure (WHO, World's Health Organization, and principally the "Codex Alimentarius") for preventing at least an indiscriminate abuse of market power...
Someone could say: "Well, cigarettes have been well proved being dangerous for health of people, altough they're often provided by the State itself..." but food is strictly necessary for life, and so it isn't for smoke. We're probably crossing once again the door of the fading boundaries between health and market.
Hi Domenico
I don't know that much about GMO and Standards of food but I want to share the experience of my country about polluting vehicles.
They set a deadline which was 3-5 years according to the life of cars. E.g those who where older should be changed sooner.
Then they cooperate with car producers and to give a new car to owner of old cars who want to change their car and buy a new car. So if you give an old car to government they were sending you to the car factory to get a new car(with discount and leasing). After the deadline non of those cars were allowed to commute in 10 big cities. This was beneficial for car producers as well because they sell their products and also get the steel from recycling of old cars!
Thank you for the interesting post. Great blog. I agree with Domencio & that not everybody has the economic means to consume critically & chose.
Please check out Thinking is the new black
Capital markets are unstable. In the past there was no way to make them stable. But today we have computer power that can be used to make them stable.
By using the greater computer power of today we can have a much higher turn over of capital in the capital market. This higher turnover will make the market harder to game or control and the market will no longer have the unstable run ups or declines. Who can change or control the market when say 20% of the capital is trading each day?
So now that we have the compute power to provide for all these transactions that will smooth out the market how do we force people to turn over at a rate of 20% a day? Easy, put a cap gains tax of 0% (zero) on all gains of 7 days or less and put a cap gains tax of 90% of all gains of more than 7 days.
The likes of Yahoo, Micosoft and/or Sun Micro Systems will give us the systems that will provide automated software agents to support turning over one's investments every 7 days (based on the specs you give the agent).
A system like this will make the financial markets work as smoothly as the local fruit market.
You may want to look at a literature of corporate social responsibility. As far as I know, there are many papers relating to your question. Many papers explain CSR as product differentiation. In particular, several papers share an interesting result that CSR is not necessarily good for consumers.
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