Sunday, August 03, 2008
Shipping Costs Start to Crimp Globalization
Who'd a thunk it? A rising tide really does lift all boats, including the cost of transportation.
It no longer makes economic sense (as if it ever did) to ship pulp from trees in Alaska to Japan to be made into rayon to be shipped to Korea to be made into cloth to be shipped to Malaysia to be made into shirts to be shipped to warehouses in the United States to be shipped to Alaska to be purchased, worn out and thrown away in landfills in old clearcuts.
The economic processes that have supported globalization, up to now, have ignored both ends of the resource cycle. Trees, minerals, oil, topsoil, water have always been considered "free" for the taking, to be used to produce private profit, while the results of resource exploitation, pollution, deforestation, habitat loss, diversity loss, have been left to society and government to deal with.
On the other end of the economic alimentary canal, waste products from industrial production have always been left to be dealt with by the country (the people, the plants and animals) where production occurs, thus screening the results of production from the awareness of consumers. Buying that plastic whatsit from WalMart has no visible effect in the life of the consumer. When it is no longer desirable, it is thrown "away," as if there was some "away" for it to go.
Finally, with the decline of artificially cheap energy, the consequences of such an ignorant, wasteful economic system are coming increasingly to view, and, better yet, invading the bank vaults of those who have made billions in profits exploiting the Earth. Once they realize how wasteful it is to play the walnut and pea game on a global scale, they'll start bringing production back closer to consumption. And once the by-products of production must be dealt with close to the point of consumption, all sorts of opportunities politely present themselves for closing the loop between raw materials and waste products.
Marx explained this all completely, in 1903, but everyone was too caught up in fighting "Communism," if that's what it was, to pay any attention. Marx was writing about the separation of agriculture from the cities, creating a separation between production and consumption and a subsequent loss of soil nutrient at the production end. By keeping production and consumption close together, "wastes" are easily returned to the point of production as "resources," closing the loop in the production/consumption cycle.
Surprisingly enough, there are social consequences to the separation of consumption from production, as Marx pointed out, consequences that we are now seeing on a global basis in resource wars waged to prop up governments suddenly finding themselves on the excremental end of the resource stick.
'Twas ever thus,' quoth Mr. Natural.
As with everything Yin and Yang, the twin specters of climate change and Peak Oil are also the twin promises for the future of the human species, if we have one at all. As real economics comes to bear on human economics, we will once again find our place at home and give up the shell game of Globalization as a tawdry carnival trick.