Saturday 5 December 2015

Indian Pollution Crisis & Real Product Cost

We are now living in dire situations.
Humans have done what no other specie could think of - destroying their own habitat to live better.

All of us have gone beyond our natural longing and needs to achieve great heights in our lives - or so we thing.


Mass production has increased consumption levels of all humans to an unprecedented level by providing expensive natural resources at cheap rates.
Cheaper prices are bad because they result in the flaunting of one crucial law of nature – give back as much as you take. 
For example: people do not realize how expensive a laptop or a smartphone can be if the natural resources are accounted for. A few big players are using our urge to make money by using up our resources. Climate change is just the beginning. 

Not far from today, Industrialization shall be considered as one of Humanity's greatest blunders.

Let’s question a few of the goals behind industrialization and mass production of goods.

1. Achieving economies of scale to reduce production costs? Make these products available at cheaper rates to increase sales?

The first and most important point of all.
Henry Ford started it - green revolution thrashed it and we all reaped it's fruits. Industries were built to manufacture a product at a fraction of it's actual cost. This increased sales and multiplied profits.

Seems like a brilliant and simple solution to a costing problem. 

But did we account for all the costs correctly?  Was mass production of a product really reducing it's actual cost? I don't think so.

Lets take an example to understand this: 
  • I want to pain my car white, and by using the most economical method of painting, I need 5 liters of paint to do this. 
  • Lets assume 5 liters of paint will cost me INR 100/liter (Total - INR 500).
  • But if I had to paint 10 cars and bought 50 liters of paint, the supplier would have agreed to give it to me at INR 80/- per liter (Total - INR 4,000)
  • Which means I would have painted one car in INR 400! That's nice! 

But here is the catch.
The amount of paint needed to finish up a car will be the same. No matter the cost reduction.
HENCE: 
  • The amount of natural resources needed to use the paint shall also be the same! Logical? 
  • The actual cost on the environment does not go down – only the monetary costs go down in mass production.
2. Get a useful product in reach of the common man?

This is one of the greatest statements in support of industrialization and mass production. But is it really true?
Why do we need to get this so called useful products in reach of the common man? It's Profits and businesses are needed to build an economy, not philanthropy – and good marketing and PR result in such outlandish statements. 
Creating a need and then fulfilling it with a product is the way of today’s largest business houses.

But what are the repercussions of this?

We now know that mass production may reduce the cost of the product in terms of money, but it does not reduce any stress on the environment, in fact it may damage it further by pollution and tree felling.

So when such a low cost product is launched in the market, it quickly sells out – and not just that, if the product gets’ lost or damaged, the consumers will easily re-buy it without thinking about its cost – since it’s a cheaper option to actually making it. 

So what does this do? 
  • It directly increases the consumption of natural resources a lot more than what is actually required
  • And no one is held accountable for this. 
  • The cost of natural resources is not accounted for and lower prices increase their consumption without any motivation towards recycling.
3. Increasing employment? 

Another blatant lie. We have seldom seen industry workers happy with their jobs. Almost all of the majority blue colored workers have to get employed at cheap wages and worst work conditions to sustain a living. Thats one of the ways to achieve the economies of scale and reduce costs. I would rather say that it’s this little wage they get in these industrial mass production line jobs that stops them from venturing into the world to make a better living.


So what can be done to stop this?
I am thinking of a direct solution. 
  • Make it uneconomical to mass produce any product that use elements/resources which are either harmful to produce or damage the environment. 
  • This will increase the cost of production and discourage businesses to do it as increased costs will reduce sales and in turn, profitability. 
  • We can have our scientists and researchers identify and categorize all the elements/resources whose production damages the environment
  • We can levy a fixed extra tax amount on it’s use. 
That is it. 
  • The moment this is carried out – private research will be done to find alternative elements/resources that are not in the list.  
  • And new innovative product designs shall be launched that do not use such elements and resources.