The High Price of Cutting Costs For Profit

By James Donahue

The British Petroleum disaster in the Gulf of Mexico is perhaps a over-dramatized example of the trouble big business can face as a result of taking shortcuts to cut costs and guarantee higher profits for company executives and stock shareholders. They may get away with it for a while, but sooner or later, things go terribly wrong.

American automakers operated for years on the premise that building cars to last no more than ten years assured a rash of new car sales once the old cars wore out. But as prices of cars jumped and Japanese and German automakers began offering cars that were built with a craftsmanship that made them last for hundreds of thousands of miles, they almost put American car makers out of business. The rush was then on to build better American cars.

Toyota, however, recently fell into the trap of farming out the manufacture of many of its automobile parts to secondary suppliers. And when parts like accelerator peddles and computerized operating systems began failing, Toyota suffered a massive recall of most of the vehicles being sold in the United States.

More recently, Chrysler Motors suffered a similar recall because of defective accelerator peddles manufactured from the same supplier.

Recalls of toys, pain killers, baby cribs, car seats, canned foods, fresh produce and a wide variety of other products have become so common in recent years that it is getting hard for Americans to buy much of anything with confidence. By the time we hear about the salmonella in our lettuce we have already consumed it and then spent the next few hours hunched over the toilet.

My wife and I recently purchased a water purification device for our kitchen sink so we could be assured of getting the taste of chlorine and other impurities from our drinking water. Within weeks it began cracking. The device was made of a poor grade of plastic that has literally fallen apart in front of our eyes.

There was a time when we used to write letters of complaint to the companies that made things that fell apart. We usually always got replacements and letters of apology. But this kind of thing now happens so frequently, I fear we might be devoting much of our time and energy into trying to get our money back.

So what has happened to pride in workmanship? Why are the things we buy so inferior that they either fall apart in our hands or in some way harm us?

Blame it on the World Trade Organization and agreements among its members to open the doors to free trade deals across international borders. These agreements allowed American manufacturing companies to move out of the United States and into impoverished places like Indonesia, India, Mexico and China where cheap non-union labor is readily available.

The people that now make our tooth brushes, our plastic toys, our clothes, plastic spoons, wall paneling, ceiling tile and even grow and harvest our food are no more than impoverished slave laborers working in sweat shops all over the world. And if American companies will go to that much trouble to save money on labor, you can bet they are looking for less costly formulas for making the plastics, the fabrics, the imitation wood and other materials used to manufacture these products.

This inferior stuff arrives in American ports in large box loads that are dropped on railroad cars and trucks for shipment to a variety of discount stores all over the United States. And with American jobs now moved overseas, unemployment rates are so high and the few jobs still available pay so poorly, that folks are forced to buy this inferior junk instead of looking for quality.

In the end, this is the high price of materialism. With so many Americans out of work or struggling to make ends meet on the meager wages they now earn on the few jobs they can find, homes are going into foreclosure, more and more families are finding themselves among the homeless or packing in with relatives, and just about everybody has maxed out their credit cards and bank accounts. There remains very little money in circulation.

This is a failed capitalistic system at its evil worst. It is time for everyone to take stock at our situation and start throwing out all of the things that we don’t use or need, and turn away from materialism. We are bombarded with advertising everywhere we go and everywhere we look. Our television programming is so packed with ads it is hard to follow the plot lines of stories.

It is time to put invisible halters on and teach ourselves to ignore those advertisements, turn off those television sets, and resist those advertisements when they sneak through to impact our senses. The rule is, if we don’t already have it, we probably don’t need it. Even a lot of the stuff we have should be scrapped because we don’t use it.