The logistics chain that is Amazon, or Walmart, or even a Ralph’s, is one of the grand capitalist achievements in history. It used to be, in those heady days before the capitalists inserted themselves into the food supply system, that the working man spent 80% of income on food and rent. Sure, rent is a bit of a problem in certain places still. But food bills have fallen to perhaps 10% of household income.
We can check this too. Back in 1962 or so Mollie Orshansky noted that a poor family was spending about 30% or so of income on food. So, if we take a reasonable diet and triple it – roughly – then we’ve got a reasonable estimation of the poverty line. Sure, it was a back of the fag packet estimation and was meant to be used for a year or two while they all figured out something more sensible. But that is what the Official Poverty Line in the US is today, merely upgraded for inflation. And as general inflation has been significantly higher than food price inflation over those decades that average poor family, on the same inflation adjusted budget, is now spending 12 to 15%, not 30%, of their budget on food.
Supermarkets are the reason why. The people who own supermarkets charge a 1 or 2% margin on their activities. They get 2%, we get a 50% reduction in costs. It’s one of the great bargains of all time.
And this is what Guardian columnists complain about…
A really important fact about these amazing supply chains is that there was no grand plan. No brilliant government agency coordinating everything. No special laws, permits or regulations. They arose organically — one buyer and one supplier organizing their affairs in the manner that best suited them. Spreading like a massive web of one to one transactions, spontaneously arranging the most complex system in human history.
The OP describes this as a great capitalist achievement. But I really don’t agree, as I have said before, I don’t like the word capitalist, it has lots of baggage. No, what made this possible was simply freedom — one buyer and one seller at liberty to make whatever arrangement suited them best. It had very little to do with capital. It had everything to do with people being free to enter into mutually beneficial arrangements.
Capitalism is statistics in action.
Quite right Mr. Orr, careless use of words can lead you far astray. A bad habit.
Freedom to spend one’s own money, freedom to associate with whom one pleases, freedom of movement.
Capitalism kinda, free people using a free market definitely.
I agree that this is more about markets and economic liberty than capitalism. There are, after all, workers’ coops that operate just fine in the sector (Waitrose for example). But the original Guardian piece I was complaining about was directly comparing Bezos’ wealth with the price of food. Emphasising the capitalist part of it was what I specifically wanted to do, even if not quite the capitalism bit.
@Tim, I certainly understand your point. Bezos is not rich because he is a ruler or oppressor, but because he is a servant.
And that is certainly a lesson worth emphasizing.
The production and then wholesale and retail trade in food was the greatest advance of the 18th and 19th centuries
If you want want to see a country that did not have an agricultural revolution in this period you do not have to look far – most of Ireland did not have one in the 18th and early 19th centuries. That did not work out well in the 1840s – and that was NOT the first disaster, there were breakdowns in the 1700s as well.
Peasant plot farming is a knife edge system – the slightest knock can make the whole structure crash into horror. One does not just see this in Ireland – but in lands as varied as India, the island of Sardinia (where communal farming staggered on into the 19th century – and it worked very badly), and even Finland.
“Hand to mouth” peasant plot farming gives no margin for error – the hand can end up empty, and so can the mouth and the belly.
Food will take much more than 10% of your income if you do many jobs at Amazon.
The company is beginning to rival call centres and care homes as a place to avoid for jobseekers.
@pete
The company is beginning to rival call centres and care homes as a place to avoid for jobseekers.
And yet every time Amazon recruits there is a line around the building. So perhaps some people have different criteria for judging their life choices than you have. And perhaps one of the worst things you could do to them is to take away an option they might have preferred because you don’t approve of it.
You are free to start your own web based store and pay people whatever you think is good enough to make you feel social justice has been served. If you do, I wish you well with the project.
For an agricultural reformer, look no further than the First Earl of Leicester, a descendant of Sir Edward Coke no less, and his wonderful estate Holkham Hall in Norfolk.
And not only do we spend far less as a percentage, we eat a lot better for it too.
Foods that were luxuries a 100 years ago are in even the poorest houses — the poor don’t buy much French cheese or avocado perhaps, but they eat plenty of chocolate and ice-cream.
Excellent point. But hey, supermarkets are big so they must be evil.
Mr Ed as you know, one of my favourite families are the Cokes – their near neighbours the Townsends had two great generations (Turnip Townsend and then his son the statesman and free trade economists), but then the family went a bit mad – the less said about some of the later Townsends the better.
Holkham Hall is indeed a wonderful place – even my brain (smashed to bits by my disgusting life) remembers some of our trip there.
It seems self-evident that food cost less now percentage wise of income by one obvious fact. The huge increase in adult/child obesity. Sure some of it could be explained by less physical activity since say 1960, but if food cost the same (to say nothing of costing more) people wouldn’t likely be getting as fat. People can buy more high calorie food more cheaply less effort required so they not surprisingly gaining weight.
Might be a moot conversation. Was just talking to Sis over in SD, and the price/bushel being offered right now for the next corn harvest is almost double what it was last year, and it appears to still be rising.
If corn doubles, a lot of other things in the food supply will double.
So we might be going back to that old measure again.
I wonder if the dems & the current (Biden)administration’s hostility toward fossil fuels in general and toward fracking in particular is causing the price of gas/oil to go up? Also the cancelling of the Keystone Pipeline? How much is the cost of food dependent on the cost of petroleum based fertilizers/pesticides/herbicides as well as obviously transportation costs?
Tim – you wonder correctly.
The “futures” market for oil and gas hits prices right now – so saying (as the “fact checkers” do) that the Biden/Harris Administration decisions only hit future production so they “can not” be the cause of price rises now, is WRONG.
Future cut off of supply (for example “no new oil and gas developments on Federal land”) increases prices RIGHT NOW – via the markets.
Remember in the future only a small elite will be travelling far – the electricity network (especially if just powered by windmills and solar cells) will not be able to manage tens of millions of cars going for long travelling.
Under “Sustainable Development” (Agenda 21 – Agenda 2030, whatever you want to call it) the serf class (that is most people) will live rather restricted lives.
“You will own nothing and you will be happy” – was how the World Economic Forum (supported by most governments and big corporations) put it.
Everything will be allocated (rented) to you (you will not own it – including your home) and you had better “be happy”, or they will TAKE IT AWAY.
Try living without food or shelter.
NOT strictly Marxism – more like the Collectivist “Technocracy” of Saint-Simon (or the “New Atlantis” ideas of Francis Bacon).
They will not have to kill you – dissent will be impossible, because dissenters will not be able to live.
Sadly Davos is not a “Conspiracy Theory” it is quite real – and Klaus Schwab and co love President Xi and the “Social Credit” system of the People’s Republic of China.
Well with breakthroughs in battery storage capacity like solid state battery technology the distance traveling problem might be solved:
Tesla NEW EV Battery Vs Toyota Solid State Battery
https://www.youtube.com/watch?v=TiLmoOhg4pw
You charge up and night and you get maybe a thousand miles of travel before needing re-charging. In the decades it would take anyway to replace half a billion fossil fuel powereed cars with electric one would think there would be time to build up the electric power grid as needed. It may even prove feasible to charge cars/light trucks while they are in motion
Will electric cars soon charge while driving?
https://easyelectriclife.groupe.renault.com/en/outlook/technology/self-charging-while-driving-electric-car/