markets incentivize hiding costs

Original idea I've had since reading across sources on economics and design such as Cradle to Cradle, Thinking in Systems, Disassembly Required, The Money Book, and The Power Broker. Any market interaction, even at the smallest level of a single trade, incentivizes hiding costs to the other party.

While the microeconomic truth of this statement is nearly self-evident, its macroeconomic implications have not been grappled with sufficiently, particularly on how it pertains to the environment.

On a larger scale, this tendency accumulates to a trend, where aspects of product manufacture and service deployment that are harder to visualize, more geographical or systematically remote, or touch stakeholders that feel less akin to us are consistently left out of the equation of price. Here are some concrete examples of each to speak more plainly:

Harder to visualize

Elements or "externalities"1 that are hard to visualize are our first stumbling blocks in the road to ecological justice. These are the parts of life whose scale our human brains struggle to grapple with conceptually—things like gasses, chemicals, and microfibers—which are consistently left out of a product or service's costs. Some more examples include:

  • The toxicity of used nuclear material
  • The expansive volume and atmospheric dynamics of greenhouse gasses
  • The toxicity of benzene and other petroleum derivatives (see "devil's piss")

Geographically or systematically remote

Thinking in systems is hard, and honestly pretty new for humans. Things can feel remote by being far away in our global system, or by acting in convoluted or highly dynamic ways within the soil right under your feet. Some examples of "remote" things that often get excluded from price calculations include:

  • The ecological and political impact of a dam on down-river communities. See the history of the Colorado River's flow into Mexico for a quiet America atrocity.
  • Literally everything about the Great Pacific Garbage Patch: what it is, where it is, how it came to be, its impact. Even worse, the Patch itself represents the easiest part of a system to understand. It is an eddy in the global currents of microplastics. It is far more easy to picture its impacts than the diffuse, slowly-accumulating plastics that are steadily rounding our globe.

Hurts people we don't identify with

These are hard ones to hear, but we as humans have a tendency to not wince in as much pain if a system bears negative impacts on communities that we don't feel close to or don't identify as kin to us. This empathetic distance is made even more great by the cost-hiding power of markets: if the people whose water our bottling company steals from aren't like us or near us, the heinous idea of stealing water never reaches our ears, and both the both the bottler and we consumers are incentivized to keep it that way.

While examples of this can be violently dangerous sociopolitically, those that operate primarily through economics can be especially insidious, because they even further obscure what should be a painful human cost through the mediation of the market. Some examples of this effect include:

  • The near slave labor conditions of textile workers in Asia
  • The explicit slave labor used by Hershey, Nestlé, and Cargill in Africa2
  • The rising sea levels leading to catastrophic flooding in poor New Orleans

We can't will ourselves out, we need infrastructure`

These mechanics are sometimes exploited purposefully, such as in the case of Exxon's climate denial campaign that has been active and ongoing for over 60 years since they first found evidence of climate change; or when plastic manufacturers co-opted recycling iconography and messaging to confuse the fundamental problem of plastic waste.

But the bad actors are not the deep problem. The scary part for me is that the very nature of market-based systems, and our own limited capacities for systemic empathy and understanding as humans, both contribute to this problem on their own. Without some kind of external system, everything about the way we structure our society leads us to accidentally leave out parts of the calculation of cost of making and doing things.

This is why we need governmental systems and shared values that have ecological neutrality sewn into their core. Externalities do not exist on this pale blue dot, and we simply cannot afford to have an economic and political system that makes it so easy for us to delude ourselves into thinking that they do.

Footnotes

  1. Externalities should be outlawed as a term. It is a term for a thing that does not exist, ~lt~because nothing is external.~lt~ ↩

  2. In fact, the Supreme Court's reasoning in its dismissal of a case this summer proves my point perfectly. The court deemed that the plaintiffs did not have standing, being foreigners, because they could not sufficiently demonstrate a "traceable connection" from the companies through their intermediaries in Africa to the slave labor that the plaintiffs were forced into. ↩

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