How cost, complexity and an unachievable standard keeps us from consuming ethically while the stories we tell ourselves make us feel good about our purchases anyway.
In this episode you’ll learn:
- What is a negative externality.
- Why figuring out what is ethical in terms of purchases is so difficult.
- How what is considered ethical consumption is in flux.
- What stories do consumers tell themselves in order justify their purchases.
The Myth of Ethical Consumer by Timothy M. Devinney, Pat Auger, and Giana M. Eckhardt
Why Don’t Consumers Consume Ethically – Giana M. Eckhardt, Timothy Devinney, and Russell Belk
Is a $415 Men’s T-Shirt Better Than a $6 One? – Jacob Gallagher – Wall Street Journal
EconTalk – Elizabeth Pape on Manufacturing and Selling Women’s Clothing and Elizabeth Suzann
Fig Leaves Are Out. What to Wear to Be Kind to the Planet? – Tatiana Schlossberg – New York Times
You heard it here first: hold fast to your antiques – Lucy Kellaway – Financial Times
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The Costs of Ethical Consumption
The home where we recently moved has an outdoor wood burning pizza oven, hand-built by the previous owner. Over Memorial Day weekend, one of our sons and our daughter visited to help us prepare and cook our first pizzas.
We realized we were missing two important tools: A laser thermometer to figure out if the inside temperature of the oven was sufficiently hot to cook the pizza and a hatchet to split the hardwood used in the oven.
We managed to cook our pizzas by guessing at the oven temperature and using a dull axe to split the wood.
Harbor Freight Tools
My brother-in-law mentioned he had gotten a laser thermometer at Harbor Freight Tools. I stifled my initial impulse to order the items off Amazon and instead my son, daughter and I drove to the nearby Harbor Freight Tools store.
I’ll admit I had never been to this store and knew little about it. I’d driven by it dozens of times, always noting its unattractive appearance. It is a rectangular building with a blank steal and brick wall facing the street with no windows.
The asphalt parking lot extends to the sidewalk with no landscape buffer. The plain signage is red with large white letters and no logo.
Seth Godin wrote that “fonts are design in a little tiny box. Fonts tell a story at the same time they deliver the letters you need to tell your story.”
The story I was told every time I drove by Harbor Freight Tools and looked at their unadorned sign in Antique Olive Nord font is, “We did the bare minimum to get this enterprise going. We’re cheap.”
I suspect, though, when others see the sign they are told an entirely separate story: “This is my favorite discount tool store.”
I also had never considered stopping because I didn’t need any tools to move and ship freight. I envisioned a store full of forklifts. It had never occurred to me until my brother-in-law mentioned it that they sold all kinds of tools.
The store was crowded, mostly with men, many of them holding advertising inserts and coupons.
We quickly found a laser thermometer for $27.99, and then stood in front of the axe and hatchet section.
The hatchet seemed incredibly inexpensive. A 1.4 pound hatchet with a hickory wood handle was priced at $12.99. It was made in India.
When I see something that seems to cost too little, my first thought is perhaps it is poor quality, but that didn’t seem to be the case for this hatchet. My second thought is perhaps the product’s price doesn’t reflect all of the costs.
In other words, are there negative externalities such as environmental, societal or other costs that are being borne by others instead of by the manufacturer, retailer or consumer. Are corners being cut to keep prices down?
In the case of the hatchet, I didn’t know. I certainly didn’t think of India as a place where hickory handled hatchets were made.
We decided to buy it anyway, and then stood in amazement at the line at the cash registers where men were sorting through coupons to make their tool purchases. One gentleman must have had 50 coupons so we chose a different line.
Surveys of consumers show most say they want to be ethical in their purchases, avoiding items that harm the economy or exploit workers. Yet, most consumers don’t consider ethics when buying things.
Giana M. Eckhardt, Russell Belk and Timothy M. Devinney in a paper titled “Why Don’t Consumers Consume Ethically” write “Even consumers without strong ethical convictions would like to think of themselves as good people, so doing the ‘right’ thing in their consumption choices should be appealing.”
“However, doing the right thing may mean paying more, expending more time and effort to find the ‘right’ product, or doing without a popular brand.”
There is a cost to being an ethical consumer in terms of time, money or give up of social prestige.
Ethics deals with whether something is morally correct, where there is a clear delineation between right and wrong. Such a delineation doesn’t exist when it comes to consumer purchases.
Eckhardt, Belk and Devinney write, “What is generally considered to be ethical consumer behavior is in flux—is it really good to boycott goods from China to protest unethical employment practices when that may result in fewer jobs for Chinese workers who have no employment alternative?”
In their study, the authors interviewed 20 consumers from 8 different countries and presented them with three scenarios reflecting different ethic situations.
One of the scenarios involved “purchasing a popular athletic shoe manufactured under conditions of worker exploitation.”
A number of interviewees in China and India felt this exploitation was just the way the world is and a necessary for developing countries to expand their economies.
One Chinese respondent said of this exploitation, “Normal, it’s absolutely normal since it’s a market economy.”
Another respondent from China said, “To have exploitation of the workers is quite natural; this is the adoption of every business throughout the world.”
A young Chinese woman said, “Most people know how Nike shoes are made. It’s very normal. Some say it’s a good thing. You will be laid-off if you aren’t oppressed by others. The boss gives money to you. The boss earns money, and then you have money. No one is hurt.”
An interviewee from India said, “What can we do? It has nothing to do with us. Some people earn well, some countries are poor. That is business. It’s cheap for them [Nike]. If they try to do it in the US, they have to pay more. There is nothing wrong. If they [the workers] had no job, then how would it be? At least they have food to eat.”
Finally, a respondent from Australia said, “Most Australians are concerned about price, not the labor issues. Morals stop at the pocket book. People might say something, but if they were to make them [athletic shoes] in Australia at twice the price, people would buy the foreign cheaper brand. These blokes [factory workers in Southeast Asia] are lucky to have a job. If they weren’t making them there these people would not have work.”
Not My Responsibility
While some respondents felt the exploitation of workers was wrong, they were still willing to purchase the cheaper products because they felt it was the responsibility of government or corporations to protect workers so why should they “waste time thinking about such issues or changing their consumption patterns.”
One German consumer said, “I cannot do anything about it, so why bother thinking about it.”
Our $12.95 hatchet does a good job of splitting logs for our pizza oven, but I can’t help but think I should have paid the cost in terms of time and money to make sure it is ethically sourced.
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