So, here's a thread to collect everyone's favorite horror stories of the inefficiency of capitalism, from defense contracting to agriculture, from the waste of demographic micro-branding to the shadow play of captured regulatory bodies and more.
I'll start off with the story of Tater Tots®, a registered trademark of Ore-Ida, once an independent company and now a brand produced and distributed by mass-merger corporate conglomerate Kraft Heinz, with its foodservice division sold to Canadian company McCain Foods in 1997 (heir Nancy McCain is the wife of Bill Morneau, the incumbent Minister of Finance within Trudeau's government).
Ore-Ida built its fortune in large part on the french fry, nothing more than a slice of potato fried in animal fat or, more often nowadays, vegetable oil. The Ore-Ida brand name currently appears on nineteen different french fry products in stores of different shapes, sizes and seasonings, including one specifically designed to mimic the quick-prep rods of grease found at fast food chains. Over the history of the company (founded in 1934 by Idaho farming magnates with its headquarters in Oregon, hence the name), its fat-fry fortune has been used to such absurd ends as sponsoring an annual bicycle race promoting their product through competition between the sort of people who'd never buy what they sell.
As with most corporate products, the Ore-Ida french fry had to meet exacting standards of preparation, so that any one of the company's french fries looked and tasted pretty much exactly like another one sold under the same product line. In practice, this meant their production facilities ended up blasting out tons of wasted food every year. This took the form of slivers of potato, that is, the percentage of any given potato that didn't fit into the sum cubic centimeters of waffle-, box- or wedge-shaped product from each line. Inefficient, sure—but, capitalism being capitalism, the problem wasn't how to make french fry production more efficient, but rather how to turn a profit from the waste created by the current process, as brand-centric sales plans required that Ore-Ida deal with waste by expanding its product line, rather than "innovating" as concerned its existing form of production.
In 1953, the Mormon brothers and brother-in-law behind Ore-Ida came up with a "solution" to their problem. This was simply to take the bags of potato trash they'd created, slice them up into even finer chunks, mix them with flour and seasoning, push them through tubes on a factory line and chop them off into bite-sized cubes for cooking, freezing, packing and shipping. In this manner, they created the "Tater Tot", a still-popular product imitated by countless competitors and a staple of the school lunch, the single meal provided to countless children from low-income households in the United States. If it weren't for the nature of the capitalist mode of production, this might qualify as a capitalist-inspired innovation in efficiency... but, of course, Ore-Ida's job wasn't to streamline the path potatoes took from farm to table, but rather to take capital invested and transform it into more capital.
So, here's the result: a 5-pound bag of McCain Foods Ore-Ida "Country Style" wedge-cut steak fries, purchased from Foodservicedirect will put you back $56.85 today, while a 5-pound bag of the same brand of tater tots costs $59.45. On top of the difference between the production cost of french fries and their 5-pound-bag sales price, you'll be paying an additional mark-up of $2.60 per 5 pounds of mostly waste product that would be created anyway during the manufacture of nineteen different kinds of Ore-Ida french fries.
In other words, the consumer pays extra for the privilege of eating from a bag of garbage... or for the privilege of feeding a bag of garbage to impoverished children. Capitalism, everybody.
Edited by cars ()
I sprinkled mud onto potatoes that had already been washed so that they would look freshly dug when they hit the supermarket. Most depressing holiday job I've had.
I honestly thought I was going out of my mind halfway through each shift. Btw the quality of the mud varied depending on which supermarket we were preparing potatoes for, for Waitrose (I'm in the U.K.), we had peat instead of bog standard mud.
toyotathon posted:also frontpage cars' post cuz why not
if it goes that way i've made it possible through a user-generated edit. ty
One of his first tasks was to go out the back and sledgehammer a bunch of obsolescent flat-screen TVs that weren't selling, so as to not be stolen or otherwise force the price down.
Also there was a weird and absurdly flexible kid who could literally suck his own dick, thanks-no-thanks for reminding me about that related memory.
now this was invented as a way to get money from the waste byproduct of woodwork. so you'd build a wardrobe or whatever out of real wood, sweep it up into a container, and after maybe 50 real wardrobes you'd be able to use it to produce one real piece of shit for all the cheapasses out there
now, turns out exceptionally cheap furniture is exceptionally popular, to the point where people's expectations shift and it becomes the normal. decent furniture made out of real wood is now a luxury item and (with the help of hipster marketing about "craftsmanship" and w/e) carries a price to match that expectation
this means as a species we take shitloads of wood for the sole purpose of turning it into shavings, so the shavings can then immediately become a worse kind of wood. instead of just using it as it is
this is why flatpacks can only be taken apart again like 2 more times before the joints get all fucked up, but charity shops are full of victorian dressers. vimes boots theory strikes again
as a bike mechanic i enjoy quoting people in the summer the more than what they paid for their kids bike at christmas because everything is already broken and also nobody even sells replacement parts as bad as what it came with originally. like, i have no idea where the fuck to get a "saiguan" derailleur, but i do know that making 7 year old children ride something that weighs 25kg and has plastic brakes is cruel and dangerous
it wouldn't even be difficult to make something simple that a kid could never reasonably fuck up, so their parents could sell it when their kid grows too big and it'd retain most of its value, but then if we didn't waste resources constantly we wouldn't be making shareholder value!!!!!
One-shot cures for diseases are not great for business—more specifically, they’re bad for longterm profits—Goldman Sachs analysts noted in an April 10 report for biotech clients, first reported by CNBC.
The investment banks’ report, titled “The Genome Revolution,” asks clients the touchy question: “Is curing patients a sustainable business model?” The answer may be “no,” according to follow-up information provided.
In fact, advertising can be so wasteful that advertising bans, as for cigarettes, have actually helped the affected companies.
To the extent that advertising is not rent seeking behavior, it's about changing consumer preferences, which generates even more inefficiency. At this point, it's well established that well-being is governed by a hedonic treadmill--getting more consumer goods, for example, can make you temporarily happier, but higher consumption will quickly become the new normal and you'll return to your baseline level of happiness. In this light, advertising that makes people tie their happiness to products and brands--creating a consumer who demands more goods--simply raises the cost to society of providing the same level of well-being. That's inefficiency by any measure, though it's impossible to quantify in the economistic framework used to measure efficiency since comparisons of different utility functions--such as those of a consumer before and after advertising--are verboten.
Here's an anecdote that was illuminating for me when I was younger, and that addresses the efficiency issue in a somewhat surprising way: in 2003, an industrial engineering consultant is hired by the biggest eyeglass lens manufacturer in the US to improve the efficiency of their distribution center. He's hired by Steve, a VP and the head of the distribution arm of the business.
This job looks like a home run--the distribution center is a disaster, so there are lots of opportunities for improvement: SKUs(products) can be slotted more ergonomically, so there's less reaching up and bending down to pick them. A high velocity SKU area close to the dock doors can make picking orders faster. Most importantly, 70% of orders can be completed with just 20 of the 500 SKUs they stock. Currently, workers trace a serpentine through the aisles of rack, picking items for orders like you'd shop for groceries, but for this 70% of orders it's more efficient to create an assembly line style operation, where order boxes move through stations and get filled with those 20 fast moving SKUs.
After these changes are made, along with a dozen others, labor productivity has gone up 300%. Put another way, the same number of orders can be shipped with only 25% as many work hours. The distribution side of a business doesn't generally drive demand--you can lower costs, which may lower prices slightly and thus increase orders a bit, but generally you're taking order volume as given. Then Steve's job as the head of distribution is simply to minimize costs, and his course is obvious--he needs to cut employees. He doesn't actually need to fire anyone, necessarily--warehouse jobs are awful, and the turnover rate is extremely high--but he at least needs to stop replenishing the hemorrhaging workforce.
That's not what he does though. What Steve realizes now--if he were brighter, he would have realized it before he spent millions on this exercise--is that his status in the firm hierarchy is based on the number of people he manages and the size of his budget. If he makes those cuts, he's hardly in charge of anything anymore. So he keeps the same size workforce, reaps no benefits from the redesigned warehouse, and the project is written off by corporate as an abject failure.
For the workers on the floor, however, this was a huge success. They only have about 2 hours of active work per day now. Of course, this sort of incentive problem doesn't usually redound to the benefit of workers. Typically, it will just create massive waste with no corresponding benefit to anyone except perhaps the middle-manager making the decision.
Edited by Aspie_Muslim_Economist_ ()
I bet you could find a micro apartment, one room + a bathroom, for about $3000/month there on Spring St
Company A does semiconductor fab. They run the plant 24/7, and have two 12 hour shifts a day. Workers have five shift = 60 hour weeks. They have three teams of workers and 14 shifts per week, and labor laws say they can’t make anyone work more than 60 hours a week or 24 hours straight. What you find if you try to schedule shifts is that, with three teams, you can’t fill the 14 slots and keep every team in only first or only second shift. So to deal with this, company A forces every factory worker to alternate between first and second shift every week. Because of this, they have huge turnover—way over 100% as year.
It’s pretty well known now that human beings can’t function normally with highly erratic sleep schedules, and mistakes are extremely costly in the semiconductor industry. If you forget to add diced onions to a burger at McDonald’s it doesn’t really matter that much, but if you fuck up a wafer the company’s out thousands of dollars. So this is one of the handful of cases where profitable management and basic humanity are actually aligned. All you need to do is bring in one more shift worth of workers, and, with four teams, you can keep everyone on a stable schedule. However, company A won’t do this. It’s slightly more expensive to train and support a 33% larger workforce, and that cost is immediate, easily quantifiable, and certain. The exact benefits of having non-impaired workers that stick around, by contrast, are uncertain, so because of their extreme risk aversion and cognitive biases they torture their workers AND produce inefficiently.
Interesting side note: one of the main arguments for free trade and the exploitative industrialization it engenders is that it’s usually voluntary. People choose to leave sharecropping or w/e they were doing before to move to the city and work in the sweatshop, so it must be an improvement for them. What you realize if you look at these factories is that they have insane turnover and their employees have no idea what they’re getting into. Factories don’t have to provide a better alternative to previous forms of production, they simply need access to a constant stream of uninformed young people who they can run ragged for a few weeks or months, then spit out.
tears posted:theres a big group of people who could do useful shit but instead we just murder them. whats up with that
*troll voices* million aborted every year
Remember how Marx keeps insisting that the "real" capitalist business world of commodities flashing all over the globe is on a deeper level an illusion? Why should the destruction of capital solely be an "economic" activity? We are led to assume that manipulating capital and profits must be something safely confined to a civilian zone called "business" or "economics". Certainly, this does happen there. Capital pulled over to the side of the road is capital evaporating. Factories and houses become empty derelict buildings. Machinery becomes rusty scrap. Famous brand names and companies vanish from the material world into the history books. But as of New Years Day 2009, the capitalist crisis had already "burned up" well over $2 trillion in business capital; in suddenly worthless bonds and devalued stocks, in shut factories and bankrupt companies--and the economic plunge hasn't found bottom yet. If Marx's theory about value is a guide, no one knows how much capital must be destroyed for capitalism to come out of a real depression. Perhaps a qualitative level more than anyone usually thinks about.
Caesura109 posted:While it probably isn't this convoluted anymore, Engels made mockery of the claim that capitalist distribution is efficient
Let us, however, discuss present-day trade in a little more detail. Consider through how many hands every product must go before it reaches the actual consumer. Consider, gentlemen, how many speculating, swindling superfluous middlemen have now forced themselves in between the producer and the consumer! Let us take, for example, a bale of cotton produced in North America. The bale passes from the hands of the planter into those of the agent on some station or other on the Mississippi and travels down the river to New Orleans. Here it is sold — for a second time, for the agent has already bought it from the planter — sold, it might well be, to the speculator, who sells it once again, to the exporter. The bale now travels to Liverpool where, once again, a greedy speculator stretches out his hands towards it and grabs it. This man then trades it to a commission agent who, let us assume, is a buyer for a German house. So the bale travels to Rotterdam, up the Rhine, through another dozen hands of forwarding agents, being unloaded and loaded a dozen times, and only then does it arrive in the hands, not of the consumer, but of the manufacturer, who first makes it into an article of consumption, and who perhaps sells his yarn to a weaver, who disposes of what he has woven to the textile printer, who then does business with the wholesaler, who then deals with the retailer, who finally sells the commodity to the consumer. And all these millions of intermediary swindlers, speculators, agents, exporters, commission agents, forwarding agents, wholesalers and retailers, who actually contribute nothing to the commodity itself — they all want to live and make a profit — and they do make it too, on the average, otherwise they could not subsist. Gentlemen, is there no simpler, cheaper way of bringing a bale of cotton from America to Germany and of getting the product manufactured from it into the hands of the real consumer than this complicated business of ten times selling and a hundred times loading, unloading and transporting it from one warehouse to another? Is this not a striking example of the manifold waste of labour power brought about by the divergence of interests?
well containerization and vertical integration wiped out most of these middlemen so the internal logic of capitalism ended up doing that job anyway...the real inefficiency is due to the fact that this hyper-efficient distribution system wastes energy in order to arbitrage labour and distribute plastic doodads and useless crap
19.
Ultimately, it may be impossible to pinpoint where our watch was actually manufactured, since whoever is running these sites seems to source from a number of locations, which themselves might be wholesalers rather than manufacturers. One reviewer of Soficoastal on trustpilot.com notes that his shipment came from Malaysia; another names Shanghai. An angry customer who paid $15 plus $7 shipping for a product from saveouroceansnow. com (a similar site that sells ocean-themed jewelry and tchotchkes) reports that his item came with a “Made in China” sticker on the back, inside a package that read, “Value $1.05.”
21.
Whatever and wherever it is, the entity in question is using dropshipping, a method whereby a company merely forwards the order from the customer to the supplier / manufacturer, who in turn ships the product directly to the customer. Mentions of “Made in China” stickers, watches coming in clear plastic bags, the MOJUE box, etc. point to the fact that the company or entity is not actually handling (or branding) the watches before they arrive.
25.
Maybe this explains what’s so galling to people about the Folsom & Co. not-really-scam: It simply lays bare the categorical deception at the heart of all branding and retail.
27.
Brands function to soften and mask the raw deal at the heart of every capitalist exchange, helping justify the otherwise-insane markup. As it turns out, whoever is running Soficoastal has a surprisingly frank and cynical view of this phenomenon, according to a conversation that Instagram user @effingasian had with them on Facebook.
slipdisco posted:Capitalism is making your own product and selling it. Capitalism isnt buying a piece of shit and telling people they're worth 25x the price, and lying to them about the actual value of the product.
lmao
I’ll illustrate just one of these sources of inefficiency—the hold-up problem—and its consequences. The hold-up problem occurs when individuals (workers, firms, etc.) have to make specialized investments in one another (time, effort, training, capital investment, etc.) in order to produce. If you think about it, this happens in almost every economic relationship. Workers need to learn the idiosyncrasies of a job. A part supplier may need brand-specific dies to stamp parts for an auto manufacturer. A customer has to invest time and effort to set up internet service from an ISP. The hold-up problem occurs when, because you’ve made a specialized investment in me—an investment that doesn’t have value with other potential partners—I know that I can “hold you up” or shake you down for the value of that investment.
You can come up with examples in virtually any productive interaction, but I’ll focus on examples that workers and consumers directly experience. For your labor to be productive, you generally have to learn the particulars of your job, put effort into relationships with your co-workers, etc. However, while some of those investments may be transferable to a new job, many will not be. Because of this, your employer will often choose not to reward such efforts—notions of fairness might suggest that they should reciprocate your efforts, but once you’ve made them they’ve only tied to tighter to your employer, making it harder for you to leave and thus less able to bargain for better treatment. Instead, your employer will simply “hold you up” for the additional surplus you’re now generating, giving none of it back to you. Similarly, once you’ve invested time and effort setting up internet service, your ISP will generally screw you over, raising prices and providing extremely bad service, because they know that it’s hard for you to leave.
Because of the hold-up problem, many potentially productive relationships are never pursued, because people know they’ll be screwed over. The solution for this under capitalism is contracts. Much of contract law can be seen as a means of dealing with hold-up problems. Similarly, vertical integration is often a concession to hold-up problems. However, contracts are costly to write, read, and enforce, and are usually incomplete—it’s impossible to write an agreement covering every possible contingency. This means that hold-up problems cause massive inefficiencies, both directly and via the imperfect solutions they require.
This applies to incentive problems more generally. Incentive contracts often introduce new inefficiencies into production, but they’re necessary under capitalism to induce productive behavior, since the act of by itself doesn’t actually create good incentives in most cases. What is studiously ignored in all these cases—hold up, incentive contracts, etc.—is that these problems arise from selfish behavior, and thus a mode of production that valorizes selfishness and stigmatizes altruism (the fiduciary duty to rip people off, etc.) inherently generates inefficiency. If my relationship to you is not based on a grasping need to accrue as many resources as possible, but an interest in your wellbeing and that of society in general, then the universe of productive opportunities expands, and we can work together without so many costly safeguards against one another.
So the discourse around efficient modes of production focuses on optimizing byzantine rules to overcome selfishness, when developing solidarity, eliminating alienation, and generally creating an environment where people see their own efforts as a meaningful contribution to society as a whole is vastly more effective.
Of course, capitalists do know this to some extent—the huge efforts put into corporate indoctrination serve as testament—but these attempts can’t replace a real change in relations as they always push you toward’s someone’s self-interest.
in conclusion, to no one's surprise, even non-profit orgs can be wasteful under the culture of capitalism.