Obviously, I’m going to say that “cheap” is not the right direction. I aim to prove this in this article, as much as anything can be proved. Yet somehow we all like “cheap”. We love to get something at a low price and we’re not happy when things are too expensive. We love a bargain, we love something on sale and we love getting two-for-one and a “free” gift. This is even though we’re all worried about the state of the natural environment. It works out that we can’t have both.
Let me try to prove that “cheap” isn’t the right direction.
Exhibit 1 – An item on special at Sainsbury’s
I had a quick look on the Sainsbury’s website and it didn’t take long to find that they’re selling a six-pack of Jacob’s Mini Cheddars for £1.
In my opinion, this is just way too cheap. Considering that the average yearly full-time salary in the UK is around £35,000 which translates to about £0.32 per minute of working time, this pack of Mini Cheddars equates to roughly three minutes of working time. Could we make six packets of Mini Cheddars in three minutes? No way. It doesn’t make sense that we can buy something like this for just £1, equivalent to only three minutes of working time, when it takes more than three minutes to make a simple salad sandwich. And to make things worse, this £1 purchase comes along with seven pieces of non-recyclable plastic.
To compound the problem, there are no ingredients (see below) of any real merit in these cheap things. They certainly aren’t going to nourish our bodies yet they are going to add significantly to the pollution in the world (and in our bodies). One thing is for sure though – “United Biscuits” (the owner of the Jacob’s brand) is making profit from these cheap things.
Exhibit 2 – A low-cost flight from London to Spain
Another thing I find just too cheap is air travel, especially in Europe. I went onto a website called CheapFlights and found that the cheapest flight from London to Spain was just £31.
That’s so cheap! How can this be? It’s probably cheaper than the cost of a taxi to the airport and, in the UK, it might even be cheaper than your train travel to the airport. We have a world where flying can be very cheap even though it’s highly polluting (see “Plane Pollution – a huge problem“).
I assume that one of the reason flights are so cheap is because every government would like to see more people arriving in their country ready to spend money, so the costs imposed by governments must be kept low (eg. who pays for additional runways? – the average taxpayer always get stuck with a large expense). It’s a pity that governments think that increased plane travel is a good thing because of the economic impact, without considering the environmental impact and the damaging long-term consequences.
Cheap is not the right direction
If we measure everything purely based on it’s cash price, then we’re doing ourselves a disservice. There is much more to value than just money. In fact, there are three types of capital that we should keep in balance.
Financial capital is just money or cash. True, it’s an important capital to desire because it’s a measure of efficiency and value. However, there’s no point making a lot of money if many people die or get injured in the process. Human capital is important to preserve at the same time.
Generally we’re aware of the importance of human capital, and we can see that in the increase of personal safety laws over time. The whole world is also against slavery and exploitation now, which is another sign of the importance of human capital. The sad thing is that, if destruction of human capital happens behind the scenes, we don’t care very much even if we suspect something might be going on. This has to stop. We have to take an active interest in ensuring human capital is preserved and increased.
The third type of capital that is important is environmental capital. The value of the environment we live in is just as important (more really) as money and our fellow humans, however this is the form of capital the human race has been ignoring until recently. The world is just starting a correction to rebalance these types of capital, and we need a massive, rapid adjustment in the direction of the environment.
If there was not a suitable environment, no people could live and there would be no money!
Thinking of this backwards, if the environment dies then humans won’t be able to survive and there’ll be no point in money. The environment is the fundamental building block of everything, and we’ve been disregarding it for at least the last century.
Cheap is not the answer
When you walk into a store and you see something being advertised as cheap, stop and consider what could be bad about this. Were humans disadvantaged in order to make this product – paid low wages, forced to work long hours, injured or killed? Was the environment damaged in the production of this product? Is the packaging something that will damage the environment in the future?
Governments should force all companies to balance the three important types of capital – environmental, human and financial. If they don’t do that, then companies seem to always take the choice towards the easy cash and ignore the other things that are really more important.
Until governments impose the right restrictions and requirements, the best thing we can do is to support companies that demonstrate that they are balancing the three types of capital. These products may not be as cheap as others, but that’s really just a sign of the abuse of environmental and human capital that allows products to be cheaper.
Do we really want to abuse the environment and people to get “cheap”?