| Tobacco companies dumped costs on the rest of us while a few people pocketed a lot of money. Some of these were the medical costs, the cost of burials and of lost wages when the smoker dies, the cost of cleaning the residue deposited by the smoke onto equipment and walls, the cost of cleaning up the cigarette butts deposited all over the place, the cost of the fires started by smokers, etc. (How about the psychological costs imposed on society by their manipulative advertising, making kids think they should all act like the "Marlboro Man" -- who by the way died of lung cancer -- or "Joe the Camel" or the Virginia Slims woman?)
Oil companies externalized the cost of cleaning up the waste products from using their products, especially the cost of putting carbon into the air. A few people pocketed a lot of money.
(And I have to mention the terrible cost to society of tobacco and oil companies funding the conservatives and the Republican Party...)
Here are a few that most of us have probably not thought about.
A computerized phone answering ("phone tree") system replaces a few workers, reducing a few man-hours for the company. But a phone tree that saves a company the cost of two or even a dozen employees might be costing a thousand callers twenty minutes each every hour. The company may have traded eight hours pay per receptionist on to 15 minutes of annoyance for hundreds of people. The company saves eight hours pay, a few people pocket a lot of money, the rest of us (15 min x hundreds/thousands of callers) lose what totals up to a lot more than "saved" employee hours. (And "How may I help you?" from a person with the intelligence to help you get your call through is a lot more pleasant than a phone tree.)
Companies have likewise externalized the costs of serving their customers. Reducing the number of technical support people while making hundreds of callers wait on the phone for half an hour is just passing the time costs on to the rest of us. As with the phone trees, lots of people waiting lots of time to talk to a tech support people adds up to much, much more time than the company saves. The time cost is passed on to the rest of us while a few people pocket a lot of money.
Self-serve gas stations passed the cost of an attendant (low wage times eight hours) on to each customer while a few people pocket a lot of money. The attendant could usually help with various problems...
Parking meters are being replaced with centralized pay stations. Hundreds of citizens now have to walk to and operate the pay station - another wage savings at the cost of hundreds upon hundreds of citizen-hours.
Here is a huge cost externalization that is not generally discussed: When a company lays off an employee, the cost of that employee's wages and benefits is passed out of the company and on to society, while a few people pocket the money that is "saved." I remember that this came up during the fight to get Wal-Mart to provide better pay and health insurance, when people realized that the employees were forced to depend on social services. People understood that Wal-Mart was externalizing certain employee costs onto the rest of us while a few people were pocketing the savings. I touched on this the other day in, It's The Economic Paradigm, Stupid! I wrote,
When a company replaces a worker with a machine, the company pockets the wages that would have gone to the worker and the worker is discarded. But now we are learning that eventually enough workers are discarded that there is no one to purchase what those workers replaced by machines were making. So the company and the economy lose, too. This just doesn't work.
In this example, which we see all around us today, reducing employees while a few pocket the savings not only passes a huge cost on to the rest of us, it eventually kills the host. Killing the host is also called economic collapse which we see it going on right now.
We have a lot of thinking to do so we can come to grips with this problem of companies externalizing costs, sometimes imposing huge costs on the rest of us as is the case with tobacco companies, while a few pocket the savings and get it under control. I don't think we even understand the extent to which this is affecting us.
I propose that we assign an agency of our government to start compiling the costs to society of different kinds of corporate externalization. This at least begins to help us understand what we are dealing with. Then we can make decisions about the best ways to control it so that we all benefit instead of just a few. |
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