by Charles Hugh Smith
July 19, 2016
A woman hammers
into small rocks in a
quarry outside Bangalore,
carving away at
India's fragile environment.
Statistics from the
U.S. Department of Commerce report that
imports of Indian
stone by American consumers
Quality, quality of life, and well-being are not easily quantified,
so they are ignored.
I often write about the Tyranny of Price, the rarely examined
assumption that lower prices are all that matters.
Thanks to the Tyranny of Price, the quality of many goods has
Obsolescence is either planned or the
result of inferior components that fail, crippling the entire
product. As correspondent Mark G. has observed, the poor quality we
now accept as a global standard wasn't available at any price in the
1960s - such poor quality goods were simply not manufactured
There is another even more pernicious consequence of the Tyranny of
Price: globalization, which makes two promises to participants:
lower prices everywhere
manufacturing work that will
raise millions of poor people in developing economies out of
Globalization is presented as a win-win
the developed countries get cheaper
goods and the developing world get the benefits of
But now a new study,
Poorer Than Their Parents? Flat or Falling
Incomes in Advanced Economies, finds that
globalization has been a bad deal for 80% of the people in developed
economies, as their income and wealth has stagnated or declined.
Cheerleader for Globalization Has Second Thoughts' a new
study from the McKinsey Global Institute finds that changes
in the world economy have left many people worse off.
The McKinsey report focuses on the 540 million residents of
developed nations who have lost ground in the era of globalization.
But if we look at the terrible pollution in China, we find that
rapid industrialization hasn't been as win-win for developing
nations as advertised.
The mainstream cheerleaders of globalization have been forced to
accept that globalization exacerbates
wealth/income inequalities by
boosting the rewards for the 20% who benefit from global markets and
capital-friendly central bank policies (zero interest rates and
quantitative easing) that have pushed asset valuations to incredible
bubble heights around the world.
Domestically, the American ruling class and the mainstream punditry
are struggling to square the circle, that is, defend the
globalization of the U.S. economy that has greatly enriched
corporations, the wealthy and the top 5% of the work force but also
alleviate the stagnation in the incomes and wealth of the bottom
Correspondent Graham R. summed up the situation very succinctly in a
"Focusing on the minimum wage is a
The society as a whole is now
stressed at every level because Globalism has promised us
cheaper prices at the cost of destroying societal structures and
their meaning for its members."
Graham identifies a key consequence of
globalization that the mainstream media has ignored:
the erosion of social/economic
structures that supported communities and provided purpose,
meaning and stability to their residents.
When price is all that matters,
factories and offices are closed overnight and the work is shipped
When production costs go up, the
production is moved to another locale.
In this environment, employees are competing with workers globally,
which suppresses wages everywhere. Since global corporations have
gained political power in globalization, they can buy lobbying and
political influence that raises the cost of commerce for small
businesses - a process known as regulatory capture that erects walls
that stifle competition.
Regulatory capture is the inevitable result of globalization's
rewarding of capital and erosion of labor.
Price is not the sole absolute good. Price is only one kind of
information. Since price is easily quantified and converted into any
currency, it has achieved total dominance in markets and mind-space.
Quality, quality of life,
and well-being are not easily quantified, so they are ignored.
Stagnation, insecurity and a loss of
social cohesion are the inevitable result once price is all that