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Big industry and the pursuit of efficiency - inherently bad

innonimatu

the resident Cassandra
Joined
Dec 4, 2006
Messages
15,350
I'm deliberately not putting the headline as a question. Though of course the idea is to discuss it.

Was just reading another piece of news, this one from Germany, about a very efficient businessman putting out the competition and "revolutionizing" an industry... by lowering labor standards with a number of bad consequences, one of which manifested itself now as outbreaks of this virus.

He has perfected the art of extracting all he can out of both his employees and the animals they process, transforming living creatures into an industrial product. His strategy was volume, volume, volume and he cut his costs to the bone, becoming the favorite supplier to Germany's discount grocery chains. The company enjoys a 30 percent share of the pork market in Germany.

The company's ability to slash costs along the entire production line has revolutionized the industry and ensured Tönnies a dominant position in the market. Even the feet of the pigs, shunned by consumers in Germany, are sold as a delicacy in China. And the entire system seemed immutable for as long as consumers were unprepared to pay more for meat and nobody cared about the price paid by the humans and animals involved - by the farmers, the workers and the pigs themselves.

Industrial efficiency is of course regarded as a good thing: we want to avoid unnecessary labour. Put a machine to work and save labour time to people. Divide tasks and increase productivity. Seen this way it its into the positivist idea of progress.

But... is efficiency an end in itself, or a means to other ends? If we want to save labour, it is because we assume that either:
1) the laborers will be happier doing something else, their time freed for other occupations.
2) the greater production will make more people happier.

1) has a problem that ought to be obvious by now: in a society of abundance that is nevertheless capitalist, most people have to work doing something in order to survive. This is a simple observation of the reality, not some theoretical consideration. Hence when say, 10 butchers go out of business and get replaced by one employee in a big meat factory, the 9 unemployed butchers don't get free time to enjoy their favorite pastimes, they are forced to find some other job.
Here I want to argue that in a modern society (where the basics of life are already easy to produce) the push towards greater efficiency more often than not leads to people being employed the same time but in unfulfilling jobs they dislike. Net result: unhappiness.

2) has a different problem, that of evaluating the "happiness" provided by the cheaper goods. Happiness is not easy to measure. Material abundance is certainly necessary first for survival, and then for the pursuit of several leisure activities. But how much is enough? How cheap should a product be, as cheap as possible always, always assuming that people will spend the money they save (in this example, the meat costs) in other things that make them happier?
Here, because happiness cannot be measured a shortcut is taken: efficiency is measured and it is always assumed that greater efficiency implies lower costs and necessarily greater happiness. Do people buy cheaper meat because of poverty forcing them to save on food? Or out of induced habit of pursuing lower prices always? When meat is so plentiful that a country exports a great portion of its production, is there a need for greater industrial efficiency in that industry, to provide for people's happiness in consuming the product?
I'm arguing no, there isn't. There is a point, and the fact that a country starts exporting a product can be seen as that point, where greater production is not translating to greater "happiness" from a product being produced.
I could make a rather lengthily econiomic argument about how in the absence of foreign trade labour and prices must always balance between products such that laborers can consume what they must of each irrespective of whether one takes more labour to produce than the others. But it's unnecessary. My question here is more direct: in industrial societies where there is such an abundance of goods that people spend their time semi-idly "consuming services", and selling services, what is the point of continuing to drive for higher industrial efficiency? Or even services efficiency?
 
Efficiency is good. But companies should have to factor in environmental costs.

My question here is more direct: in industrial societies where there is such an abundance of goods that people spend their time semi-idly "consuming services", and selling services, what is the point of continuing to drive for higher industrial efficiency? Or even services efficiency?
Efficiency is inherently good. Knitting clothes & washing them by hand doesn't sound fun. People can always do it if they want to.

People & corporations should have to pay orders of magnitude higher waste disposal fees to encouraged people not to waste so much tho.
 
You have identified a problem
You have not correctly identified the cause

Its not efficiency of highly industralised mass production of agriculture, its the lack of regulations that allow the exploitation of labour, mismanaged EU/US agricultural policies that are distorts the market.
We are also rushing forwards to the AI and Robot age where low skill labour is going to be increasingly automated and these questions of how people are going to earn a living will have to be addressed.
I doubt the solution is to go backwards and embracing menial labour, even now not many are willing to do that kind of work.

Even the Amish only are able to exist in the framework of the advanced industrialized America.
 
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Efficiency is good. But companies should have to factor in environmental costs.


Efficiency is inherently good. Knitting clothes & washing them by hand doesn't sound fun. People can always do it if they want to.

People & corporations should have to pay orders of magnitude higher waste disposal fees to encouraged people not to waste so much tho.

Its often not efficiency though, its cost cutting and maximisation of profit.
We need to encourage not just proper waste disposal but also recycling and building things to last.
How you do that under capitalism is a problem.
 
IIRC the application of EU rules in the UK requiring all slaughterhouses to have
specifically qualified vets meant that a vast number of small abattoirs became
uneconomic and closed demonstrating that regulation favours the large players.
 
I kind of got lost with the meat industry example. It's a fine example of the problem, but what I was arguing is that efficiency for its own sake is a bad idea. It's like... economic positivism? That the rules of the game which promote it as the overriding factor of decision need changing.

It's not a matter of industrial farming versus the Amish. It's a matter of thinking, every time the opportunity to squeeze some more efficiency on what we have comes up: what does this really change, will the outcomes be good or bad. Thinking beyond the simple cost-benefit analysis in this particular business. @Narz This is not an individual choice, individuals have no control over whether or not a company goes for a slightly more efficient industrial process.

As things stand the rules of the game always compel businesses to go for the more efficient process, unless they are sheltered from competition, or on a scale that doesn't justify the investment. And on that last situation they run the risk (which they don't control) of simply being put out of business by a larger one.
You can say: fix it with regulation. But the larger the market, the harder it is to regulate: obtain agreement for a new regulation, enforce it, police that others who sell products from abroad respect it... we know it isn't done. New corporations like Uber run over regulations with impunity. Trade dumping is an everyday fact. It's like... thinking of the other discussion ongoing here, it's like trying to central plan the whole world. It doesn't work, it can't be made to work. Regulation, as any form of planning, is either local to a polity and sustained by barriers, or it is ineffective in everything that can be traded. across regulatory borders. And international regulations are a pipe dream, events move faster than any attempts at regulating.

So, in these circumstances of "globalization", what I call economic positivism always wins. It's always "economic efficiency" above everything else. It's no accident that we hear of big meat's wage dumping and flaunting of health rules both in Germany and the US. It happened in my country also. It's happening everywhere. And big meat is just an example.
 
Well you would not be able to afford much and keep in mind as technology advance and stuff become more complex, they require more efficiency to produce. Also this is an old problem, Henry Ford supposedly had to pay high wages for the time in order to retain his workers due to how boring the work had become with assembly lines, but it was required so that cars could become a common item.

Here is a video of a 1936 car assembly line and as can be seen automization and machines was used heavily:
 
Here is an idea how prices have changed, keep in mind that inflation is not the actual price increase since it is very different per item: https://ourworldindata.org/technological-progress
Spoiler Price inflation :

price-changes-in-consumer-goods-and-services-in-the-usa-1997-2017.png

At the same time US average wage increased from like $13 per hour to around $22 per hour which is in an increase of +70%, so many items prices have increased much less than the wages, meaning people can afford more stuff, especially the stuff that have greatly reduced in price. Also keep in mind that technology have also made the stuff better, so the wage not only give you more but better stuff. For example the modern car is much better than older cars in terms of safety and even fuel efficiency. For the stuff that have actually become more expensive they say the reason is due to wages while there is no way to improve productivity, also more advanced technology probably have made it more expensive.
https://tradingeconomics.com/united-states/wages

So it make a huge difference in prices how easy the item is to mass produce, electronics have gotten more advanced while also being cheaper for example.
 
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Here is a WW2 factory, basically at the time you would want to maximize productivity. As can be seen there was still time for breaks and entertainment.
 
Those things are not at all contradictory.

They found that for a given work force providing breaks and morale
raising entertainment was necessary to maximise productivity.

The practice of banning breaks has much more to do
with eliminating the less robust workers through
natural drop outs and establishing the power of the
management at the expense of factory productivity.
 
IIRC the application of EU rules in the UK requiring all slaughterhouses to have
specifically qualified vets meant that a vast number of small abattoirs became
uneconomic and closed demonstrating that regulation favours the large players.

Clearly the Evil EU Fault /s
Those Vets are there for a very good reason, they check animals for sickness, carry out testing for diseases, carry out autopsy's and so on.
Feel free to remove those EU regulations when you leave

influx of talent to plug its shortages with 90 percent of veterinarians and 75 percent of other abattoir staff originating from abroad.
The industry has suffered from recruitment difficulties – long before the EU referendum – due to dwindled interest among UK students which has only been compounded further by a lack of vet schools and courses. The MAC report even goes as far to claim that the “lack of trained veterinarians within the UK is a deeper issue” than Brexit.
The government has decided against offering any similar crumbs of relief or training initiatives to the veterinary sector’s partner industry, agriculture

https://veterinary-practice.com/article/post-brexit-farming-concerns
 
Here is an idea how prices have changed, keep in mind that inflation is not the actual price increase since it is very different per item: https://ourworldindata.org/technological-progress
Spoiler Price inflation :

At the same time US average wage increased from like $13 per hour to around $22 per hour which is in an increase of +70%, so many items prices have increased much less than the wages, meaning people can afford more stuff, especially the stuff that have greatly reduced in price. Also keep in mind that technology have also made the stuff better, so the wage not only give you more but better stuff. For example the modern car is much better than older cars in terms of safety and even fuel efficiency. For the stuff that have actually become more expensive they say the reason is due to wages while there is no way to improve productivity, also more advanced technology probably have made it more expensive.
https://tradingeconomics.com/united-states/wages

So it make a huge difference in prices how easy the item is to mass produce, electronics have gotten more advanced while also being cheaper for example.

Food and consumers stuff is cheap.

Price of rent, mortages utilities more expensive.
 
Food and consumers stuff is cheap.

Price of rent, mortages utilities more expensive.
Consider that wages have increased, it seems rent follow the wages quite closely. The graph is quite similar for how the prices have increased in Sweden, except that education is basically free in Sweden. In Sweden wages from 1980 to 2020 grew around 5-6 times while CPI grew about 3 times but various things increased very differently, like healthcare cost increased like 8 times while the cost of telecommunication grew alot in the 80s and 90s before going down to just costing 16% more than in 1980.

Looking at Sweden's real GDP per capita which increased by 1.8 times between 1980 and 2018 which seems to be quite comparable to the differences in wages vs prices, obviously there are taxes and non wage benefits which may make the comparison more difficult.
 
Consider that wages have increased, it seems rent follow the wages quite closely. The graph is quite similar for how the prices have increased in Sweden, except that education is basically free in Sweden. In Sweden wages from 1980 to 2020 grew around 5-6 times while CPI grew about 3 times but various things increased very differently, like healthcare cost increased like 8 times while the cost of telecommunication grew alot in the 80s and 90s before going down to just costing 16% more than in 1980.

Looking at Sweden's real GDP per capita which increased by 1.8 times between 1980 and 2018 which seems to be quite comparable to the differences in wages vs prices, obviously there are taxes and non wage benefits which may make the comparison more difficult.

Here the CPI excludes rent and mortages.

Rent in a 3 bedroom house for my family was $60 USD approx 1988-1998. Wasn't nice house but it wasn't a dump as such just old.

I can remember what I paid in say 1996.

Minimum wage in 2000 was $8 an hour now it's 18.75.

KFC/McDonalds was $5 for a combo now it's more like 10.

Supermarket prices haven't gone up as much. Relative food is cheaper now than 2996, same with booze even accounting for downsized portions in some cases.

Chicken is cheaper than 1999 not only on the label in real terms it's almost half the price.

The problem is rent and mortages......

TVs are marginally more expensive but you're getting 42-50 inch instead of 21-29 inch.

Yeah if I was grand high poobah social housing would be priority along with reduced immigration, more taxes to pay for the housing, more money plowed into early childhood, training schemes, things like that. Healthcare is a bottomless pit, more money there is nice but there's more bang for buck elsewhere IMHO.
 
Clearly the Evil EU Fault /s
Those Vets are there for a very good reason, they check animals for sickness, carry out testing for diseases, carry out autopsy's and so on.
Feel free to remove those EU regulations when you leave

That may be so, but it doesn't change the fact that increased regulation does shut out smaller businesses and gives unfair advantages to the large corporations we all hate. Also makes it harder for people to make the transition from worker to entrepreneur.

That's why I think there should always be exemptions made for businesses under a certain size and new businesses.
 
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