Capitalism in Large Doses is Toxic

been thinking about my yo-yo documentary and the toys in china that are made with tainted lead paint.

now, none of the yo-yos dating back to 1928 were ever manufactured with lead paint that i know of. but competition among yo-yo manufacturers to be profitable was and is a big part of the story i’m telling. and working on the documentary is an occasion to muse about the rise of family-owned businesses that become wildly successful (as the duncan family experienced with duncan yo-yos) and how inevitably part of the narrative of success is that an even larger corporation buys them out and the enterprising family members cash out (or literally “sell out”) and then kick back on the beaches of cabo (or wherever) and live the good life.

what’s interesting is that the duncans never got to the stage where they were bought out by a huge toy corporation like hasbro or mattel. but they were easily on that trajectory.

now the other thing i was thinking with regard to mattel’s manufacturing fiasco over the lead-painted toys was how the “china price” basically guaranteed that something like this would happen. HB likes to walk around the house snorting about how, if a cheap item breaks, it had to have been “made in china”…he’ll mutter, “feh, the ‘china price’.”* well, what’s NOT made in china these days? i’m seeing haiti, macao, and sometimes turkey on the labels of clothing these days, but yeah, pretty much everything we in america buy is made in china.

the “china price,” as i understand it, is an actual business term of art to describe the absolute rock bottom cost of manufacture beneath which it’s impossible to go, because it would be impossible for a manufacturer to make any profit for themselves. so basically the “china price” drags down the profit margin for all other manufacturers/wholesale suppliers wherever they may operate and of course, the corporation maximizes profits by lowering manufacturing costs. (hence the outsourcing in the u.s. of everything from car manufacture to word processing to customer service call centers.)**

well, if the downward pressure on prices from we walMart-loving consumers is supposedly the impetus for toymakers like mattel to make up in volume sales the profit they’d ordinarily capture per piece, then trying to hit the “china price” kinda necessitates that someone in the manufacturing supply chain cuts an important corner. safety oversight, quality assurance, and testing are all just too expensive. finding out if there’s lead in the painted items that very young children will handle and perhaps chew on is just too damn expensive.

walMart is definitely part of the problem, especially when you consider that they now contract for walMart-branded items that eliminate the middleman, so to speak, of the corporation that supplies those same items. so you’ll see “walMart brand laundry detergent” that imitates the major features of Tide laundry detergent. and of course we the consumer, as the endpoint and raison d’etre of ultra-cheap prices, are to blame.

but we aren’t solely to blame, are we? because what if corporations took just a little LESS profit, and instead of paying the “china price” to manufacture their goods and pawning off any safety considerations onto the subcontracting chain, what if they cut into their profits and coughed up the money to ensure that their products actually measured up to american safe-consumption and -usage guidelines? ha, suggest that corporations willingly take less profit? surely adam smith or keynes or some economics person of note somewhere is bursting a seam or spinning in their graves or rolling their eyes or possibly all of the above.

as louise told thelma, “thelma…we just don’t live in that kind of world!”

i find it hard to believe that mattel only makes $.20 cents profit on a barbie doll, for example. i think in fact, by negotiating for the “china price” to manufacture barbie dolls, they instantly widen their profit margins (and therefore revenue) without having to sell one more hoochie doll than they otherwise would.

i wish i’d seen THE CORPORATION, a documentary that examines how corporations are legally viewed as individuals, and goes on to diagnose the behavior of such “individuals” as quite literally psychopathic, sometimes homicidally so. had i seen that documentary, i’d probably have a clearer sense of what i’m trying to fumble around here in my english major, never-took-an-econ-class-in-my-life way.

but in reflecting about duncan yo-yo and how they went out of business at a crucial point in their corporate life, i think though it may have been a tragedy to them and to the thousands of little boys for whom a duncan yo-yo was an emblem of childhood, maybe they were spared the kind of large-scale pressures that affect toymakers now, and would’ve surely embroiled them in mattel’s current troubles. i don’t think i’m done chewing on this idea of what happens to the family business that hits the lottery and gets bought out by a bigger corporation, but it does lead me to one observation:

capitalism in large doses is toxic.

and a corollary thought:

maybe if it’s impossible to eradicate capitalism, we should treat it like the strong poison it is: as a homeopathic substance that in small quantities uplifts family businesses, neighborhoods, and generations, but—to change metaphor midstream—that needs pruning once it reaches a certain scale.

because too much of even a good thing can kill you.

and i do mean pruning, in the way you can take a shoot off a larger growth and replant the shoot. maybe in earlier days that’s what strong government regulation regarding health/safety/and other standards, and anti-trust laws, accomplished.

but now we have a situation where whatever safety guidelines for products that were established to protect americans (and are probably too weak yet necessary for the greater good) are undercut by any given multinational conglomerate’s pursuit of the “china price.” what incentives are there, after all, for a manufacturer a world away to care a whit about meeting standards set by the government of another country? there’s no accountability whatsoever; the entire transaction has been privatized and uncoupled from national borders. and depending on a corporation to ensure those standards are met is both inadequate and all we’ve got.

we the consumer think we come out ahead when we buy something cheaply. but we just pay the price some other way.

*methinks that “china price” is newfangled B-school shorthand for the racist old rhyme about the “chinaman” ‘sitting on a fence, trying to make a dollar out of fifty cents’. something about it smacks a little too closely of the same stuff.

** though there seems to be competition for outsourcing in the service sector for the “china price” from the philippines (call centers, english-speaking population) and india (word processing/tech support, again english-speaking population). so maybe “china price” shouldn’t be taken quite so literally.

One thought on “Capitalism in Large Doses is Toxic

  1. Pingback: Enough With the Toxic Toys « P i l l o w b o o k

  2. china is capitalist and should’nt be allowed to call itself communist. it’s a vile country and any profits from their huge export buisness is’nt going to the people.there is no welfare,no comprensation for peasants’ land,taken for bio-fuels,the scurge of our time.altogether it stinks–ask the enslaved workers in the congo,it’s just like the west there.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>