Someday That Styrofoam Cup Will Cost More Than What’s In It. Sound remarkable? It isn’t. Styrofoam is made mostly from oil and its derivatives, and over the long term average oil prices will continue to rise. Increasing cost of extraction will cause that. Petroleum-derived chemicals are so much a part of our lives that many things we use daily will increase in cost to the point where we will be forced to find substitutes. While this may seem like an environmentalist’s nightmare, it isn’t. This has happened many times before, and is happening today. Remember when all food cans were steel? You will notice that some have converted to plastic over the past decade or two. It is probably the rising cost of oil and plastic made from it that has prevented almost all cans from transitioning to plastic, suggesting that the transition may even be reversed in the future. What is it that determines what products we can buy, though, and what are the implications for our current and future safety?
What we use is determined mostly by simple economics and the profit motive. Around the time when the styrofoam cup becomes more expensive than what is in it, business will probably already be transitioning to something less costly. Profit is what drives business, and since business provides everything we use (within the laws and government regulations), those products and the choices available to us will be determined by profit margins. The products may not always be the best, safest, or healthiest for us, but our only control over those matters will be “voting with our dollars”, a concept which often doesn’t work, and government regulation, which many in the American political scene are determined to minimize.
Costs are not always what they seem, either. How is it that pharmaceutical companies charge twice as much for the same pill in one country as they charge in another? Why does gasoline cost twice or three times as much in European countries as it does in the United States? Companies set prices depending on what they can get away with charging, not their real costs combined with a predetermined profit margin. Of course they have goals in mind for cost and margin, but the desired margin is only a threshold below which the company will consider whether it is worth continuing to offer the product at all, and cost is … cost, the number subtracted from what you paid to determine the actual profit and profit margin on the sale. It is a basic principle of business that cost increases (but rarely cost savings) are passed on to the consumer.
Choosing good and safe products in the future will be more difficult. As corporate power continues its seemingly inexorable rise, we will need to be more wary, careful, and informed about the potential hazards and risks in using the products offered to us. Corporations spend many millions to reduce the power of government agencies and regulations set up to protect us. They will lobby for funding to be restricted for any agency that regulates them. That way it will appear that we citizens are being protected as we wished, but the agency charged with protecting us may be incapable of carrying out its mission.
The Deep Water Horizon oil spill is a clear example of failed regulation. This was clearly seen in the Gulf Oil Spill, when a relative handful of government employees were charged with inspecting thousands of offshore oil wells in the Gulf of Mexico, but funded at a level that left them nearly incapable of getting any meaningful inspections done. An AP article indicates many of the inspections that were actually done were completed in an hour, whereas other sources have said a thorough oil well inspection should take four days . An hour would barely leave the inspectors time to look around, have a cup of coffee, find the appropriate official, and sign off the inspection forms. There would certainly be no time to look at operating and test data, and inspection of the physical premises (even just those above water) would be next to impossible. Even a four day inspection could be minimized by cleverly manipulating what the inspectors see, tieing them up with huge masses of mostly-meaningless data, and similar measures.
Expect more “disasters for profit”. As corporations continue to grow in power and political influence we can expect to see more, though mostly smaller and less newsworthy, failures of regulation leading to corporate rule breaking and resulting disasters. Most people believe that, because there is a government agency charged with protecting us, we are protected, but that is clearly far from the truth. The far right political organizations currently working to minimize nearly every aspect of government are playing directly into the hands of corporations, and any success they achieve bodes ill for all of us.
Corporations are the real “deciders”. In the grand scheme of things transitions to new (or old) products is in the hands of corporations, with only a modicum of regulation by government, and is governed by the simple economics of profit. Products that are better for us in the short term (such as BPA-free plastics) or long term (such as less-polluting technologies) will only be adopted if we either stop buying anything else, or if the government intervenes on our behalf to regulate what industry sells us. While neither of these sounds like a very effective control, especially based on what we have seen of government regulation in recent years, they are our only current options. It is likely that if styrofoam costs continue to be low, we will be using styrofoam products for many years to come no matter how damaging to us or the environment they may be. Rising oil prices will force a substitute someday, so watch the trends in price-per-barrel if you’d like to predict when we will being moving to products with less petroleum content. Unfortunately we have been so addicted to oil for the past century that there are few substitutes, but you will see corporations changing their offerings when the dollars dictate, and hopefully those products will be relatively safe. The economics are simple.
As always, I welcome your comments. Am I off-base or did I miss something? I’m sure there are other interesting perspectives and I would love to hear/read them. Thanks for reading — Tim