Saturday, March 19, 2011

Microeconomics, Rational Behavior, and the Matrix

This morning I went to a great consignment sale at a nearby church. For $43.50 plus tax, I got 18 items of clothing for my preschooler. Awesome.
Then I came home and spent $29 (including shipping) on a single pair of pants online, and they will be used as pajama bottoms. Not the first time, either. In fact, the child owns a couple sets of $36 pajamas despite the propensity to outgrow any article of clothing in less than two years.
Is that crazy?

I've just skimmed One World, Ready or Not by William Greidner. I found it to be just a slightly older and denser version of The Wal-Mart Effect and other books on the high cost of low prices. Essentially, U.S. manufacturing has collapsed because American consumers chase low prices more than any other factor, including quality and country of origin--and since much of manufacturing cost is in labor, that drives production to any of about 150 other countries where workers will take jobs in dangerous conditions for near-starvation wages (and their governments, to be blunt, would rather have the money than the people). And then Americans have few job choices and low wages, but still want a lot of things--so we continue buy what's cheapest, reinforcing the corporate dash for cheaper wages. IKEA is bragging about lowering prices, Wal-Mart is home of the perpetual roll-back... they're not cutting profit or executive compensation.

But I don't wanna buy expensive things. And when it comes to some items, I can't even if I want to. But I am not ready to go join The Compact, either.

There are so many factors to take into consideration beyond price plus tax. Overall quality. Features. Environment. Wages, working conditions and fair trade. Comfort. Resale value or disposal cost. Maintenance, storage, energy use. Do I really need it at all? When you're going down a Target aisle with a three-year-old in the cart, it's nearly impossible to think through all of this... and even if you do, there may not be any choices that are quite what you want.
Ethical shopping. Yuck. No wonder so many people buy based on price, even if they can afford not to: it's the easiest trait to compare objectively. This item has sixteen features, that one only nine--how many of the other seven features would I really use? This one is from Sri Lanka, that one Bangladesh--honest to geography, I don't know the difference (and not having plunked down $600 plus monthly service for a computer phone, I'm not going to find out in Aisle 4). This one says ten cents of the purchase price goes to a charity I like, but the product itself is not good as good for me. This car is a hybrid that was shipped across the Pacific; that one was assembled in the USA from mostly Mexican parts but only gets 23 mpg; do I try to project gas prices over the length of time I plan to own it?

What I need, then is something easier and more objective. A matrix or point system.
Here's my starting point: http://bit.ly/hewvy2. If you know a website for me to add to the Resources column, speak up! Obviously you'd have to tweak it a bit for your values... and then decide do what to do with it. Do you set a minimum score for all purchases? Do you require clothing to be 50 points, unless it's something you really need for work? Do you assign a value of -50 if the country of origin is Thailand, where corporate greed, government-encouraged worker exploitation and the decadence of rich tourists have reached the outrageous point of parents' selling children into sex slavery?

The 18 pieces of clothing I got at the consignment sale were a great value because they will meet a need (clothe a growing child). I bought before it was urgent and avoided buying something with higher cost and lower value when the kid will simply not fit into 3T's another day. They were bought used (no environmental cost except the sellers' dropping off, my picking up and the church's having lights on for the morning), and are in good to new-with-tags condition. Only four items were made in the USA, none from organic cotton--but since I am buying them secondhand, I am not directly reinforcing a behavior on the part of a manufacturer or seller (except that consignors will want to continue to keep their kids' clothes in good condition).
What about comparing what I paid to retail price? Because they're a boutique brand, three of the American-made shirts retail for $40, but I would not pay that for a shirt for a child even if it were organic cotton: the high risk of stains means the potential for higher cost per use for clothes intended for school or church. Other items would probably have been $4 to $20 each at a store or in a catalog.

By buying used on items that would not score very high on my matrix (made from unsustainable materials and energy by underpaid workers; shipped here from Indonesia/ Lesotho/ Sri Lanka/ Bangladesh/ China/ Kenya/ Nicaragua/ Dominican Republic; perhaps originally sold at Target, a not-locally-owned store), I saved money... that I can put back into the clothing budget and spend on the $29 organic fair-trade pajama pants from a pretty web site... or otherwise use on an item that would be a great value (like an organic domestically-made shirt to go with them) or meet a more urgent need (food)... or--and I admit this is heresy--just save it and not spend it at all.

I can't cast a ballot to change corporate policies (impossible unless you own an awful lot of stock--I don't!), but I can encourage behavior I approve of by voting with my dollar: whenever possibly, buying products that match my values (and if the price is great, so much the better). Survival first, of course, but then stewardship.

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