The cost of a Christmas bargain? Just the economy as we know it

An interview with Gordon Laird by Bert Archer excerpted from The Globe and Mail, Saturday, Dec. 12, 2009 

Calgary writer Gordon Laird's just-published book The Price of a Bargain is the result of a decade's research into the interconnectedness of all things in our global economy, from the supply of fossil fuels to the ornaments on a family's Christmas tree.

The past couple of decades have seen prices for consumer goods tumble, the result of what Mr. Laird calls "bargaineers" - companies, such as Wal-Mart, that engineer unprecedentedly cheap prices through low-cost manufacture, shipping and distribution, sending carbon emissions through the roof and wages through the floor.

Like many of its products, he argues, it's a system that was not built to last.

The Bay had a 60 per cent off sale for Christmas trees last week. What's going on when a company sells its product for less than half price in not only its peak sales season, but its only sales season?

Instead of the usually good tidings of the holiday season, we're seeing an economy trying to save itself desperately. If these companies can't make their margins in December and January, they won't stay solvent. The only choice is to bargain harder.

Are you suggesting these low, low prices can't continue?

There is an end-game aspect to having all this for so little. I think the massive retail phenomenon - it accounts for about 70 per cent of our economic activity in Canada - is sort of an endangered activity. Only the bargaineers, the radical bargain makers like Wal-Mart and dollar stores, are thriving.

Dollar stores?

Dollars stores sell as much collectively as a top-50 Fortune 500 company already. Dollar stores, Wal-Mart and major discounters, which would include chains such as Winners, for example, are the only ones who are showing any significant growth right now. We're evolving towards an economy of bottom feeders.

At least it keeps things cheap.

Discounts exist because there's a surplus of goods that need to be sold off quick because we need to move on to the next season, the next market. The only reason the cheapest of the cheap exists is because there's the Bay buying up the stuff that is later getting sold as discount. The ecology of our economy is turning into a monoculture. Monocultures don't generally do well in the long term. Look at the human body - look at H1N1, for example. You have a viral infection where one organism dominates and the host dies.

So your book is about how we should all pay more for everything and be happy about it?

Well, that would be the Maoist version of it.

No, the book is partly about how we've become captives of the economy that we live in - captives in the sense that our economy is based on our continuing to spend as much as we have at prices that we've become accustomed to. There's a few problems with that, not the least of which is that energy is not going to be as good as it has been - $150-a-barrel oil is not that far off.

And speaking of Mao ...

Yes. The fact that major nations such as the United States are in debt to China in ways we've never seen before underlies the fact of how the transfer of power is really happening, and that transfer of power has been about dollar-store trinkets.

China has invested itself in making those and selling them to us. Who's going to run the world in the future? Who's going to control the North Pole and Santa's goodies?

So geopolitics is being defined by 99-cent snow globes and the people who buy them.

Except for those of us who live off the land and make our own shoes, it's pretty hard to exclude ourselves from this. This is a picture that's interdependent in a way that's unprecedented in human history. Even on Buy Nothing Day, those people who buy groceries still are part of this globalization. The problem with interdependence is that there's not really an opt-out clause.

An old buddy of yours, Naomi Klein, suggested in the recently reissued No Logo that we should probably not buy Nike shoes any more. Do you have any similar recommendations?

I think that morally the whole impetus of the original anti-globalization movement was correct. But globalization is so complex that people selling the goods here in the West, even in good faith, often have had no idea they were selling blood products, toxic products, products that were created in prisons.

Boycotting Nike, what did it do? It made the web of contracting and subcontracting even more complicated.

So how do we deal with it?

Well, that's a good question. Much of the modern consumer economy is embodied energy. So one of the short answers would be a shift to the true pricing of embodied energy and carbon, which - because everything would get more expensive - would mean a move away from an economy dominated by consumerism.

Which sounds like a good thing, but I sense a "but"?

The Achilles heel of our system is that it needs open, liberalized trade relationships, cheap energy and able, hungry consumers. And all of these things are being challenged as we speak. I don't think the consumers this year will show up for consumer duty in the mass numbers that we've seen in recent years.

We're used to having goodies showered upon us, Santa-like, in the shape of deals that have not been seen before, that are really quite innovative and have given consumers access to new technologies and a sense of wealth, that previous generations didn't enjoy. And more people around the world are looking for this dream of having more for less. It wasn't a bad dream entirely. It just wasn't built to last.

There's an environmental, climatic aspect to it, but there's a profound human, social aspect of it too: We're already leaving people behind. In the States, there's 10-per-cent unemployment, created in part by the sort of frenzied overspending we're talking about, and the easy credit that fuels it. That's pretty huge. At a certain level, people just can't afford to participate in the so-called normal economy, even when it's cheap.

So the normal economy has to change - and it will change, fundamentally. Us running out of consumers with our current economic model is like Saudi Arabia running out of oil. We don't have a Plan B.

Not to go all negative on the holidays, but imagine Saudi Arabia without oil. It's not a fun place.

Bert Archer is a Toronto-based writer.

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