Next to the wholly offensive video by the loathsome Naomi Klein and unscrupulous Alfonso Cuarón, Annie Leonard’s The Story of Stuff is the dumbest anti-business, anti-corporate, anti-market web video in existence.She starts her video with a simplistic account of the economy, consumer products, or as she calls it, “stuff”. She breaks it down into 5 parts, Extraction, Production, Distribution, Consumption and Disposal which she labels the “materials economy”. She then proceeds to explain how this “linear system” is a failure because it doesn’t account for all the variations and people in evolved. This is supposed to be a critique of the standard capitalist economy, but instead it is merely a straw man. No reputable economist would pretend that the market breaks down into such neat little categories. Indeed, the standard market-oriented economist, and indeed any economist to the right of Mao would emphasize the incredibly complex system that the international markets have become.
In the second section on production Leonard argues that world has already used one third of the world’s resources. This is nonsense for a couple of reasons. First, what defines a resource? What man considers a resource depends upon the time and technology available. Prior to the late 19th century most discoveries of oil were a nuisance because they contaminated the land for agricultural use. Second, world market price determines the amount of exploration and extraction. With the rapid increase in oil-prices (ignoring the recent plummet of the past few months) oil companies ‘discovered’ a vast amount of new oil reserves. As such the resource base estimates have to adjust to the new discoveries. Likewise, it is possible that a resource will find a new use or an entirely new resource could be found. Thus to say that a third of the worlds resources have been irrevocably used ignores reality. If she had argued that one third of recognized reserves of products X,Y & Z had been used she would have had a point, at least to some degree.
Her example of the $4.99 radio is a prime illustration of her economic ignorance. The fact that a radio-an exemplar of modern technology if there ever was one-could cost less than $5 completely confounds her. She does, however, recognize the disparate nature of technology with various products coming from international locations, as the famous I, Pencil article by Leonard Read (and the subsequent explanation by Milton Friedman) showed. Yet, this doesn’t enlighten her to the complexity of a modern industrial economy, it instead it convinces her of a nefarious plot by multi-national corporations. To account for the seemingly impossible price of $4.99 Leonard invokes the idea of “cost externalizing”. What she means here is that the ‘true’ costs a product are dumped upon others: the environment, the workers and any other so-called victims she can invent. It appears to me that this idea is merely a bastardized version of the concept of externalities, or indirect costs placed on others (which can be both positive and negative). There is a legitimate critique here, but instead she sticks to anti-market buzzwords.
More to the point of the $5 price tag, she is woefully ignorant about the concepts of advantage (both competitive and absolute), division of labor, and productivity. The reason a radio can be sold for $5 dollars is because its cost to produce, market and sell is lower than $5. The raw materials can be extracted and sold in bulk, refined in bulk and assembled quickly in low-cost factories on a mass scale. Due to the invention of container shipping the products can be transported for very low cost and sold to consumers at stores who determine amount of shelf-space by the amount of profit that can be made. There is nothing especially difficult about understanding this. If she had wanted to say that the $5 radio is too low because it doesn’t pay for the environmental damage and low wages she’s free to do so. She’s all free to boycott radios or send money directly to affected areas.
Leonard is also bewildered-and mistaken-about computers. She claims that she opened up her desktop computer to learn about them, yet somehow she came back with the most ludicrous notions I’ve ever heard. She claims that the only than changes on a computer from year-to-year is “one little thing in the corner.” I’m going to be generous and assume that she is referring to the processor. She claims that this cannot be replaced because they deliberately-due to planned obsolescence-change the connection style. I’ll admit that Intel and AMD (the two most popular chip makers) have changed their socket design over time, but it’s just not true that you can’t upgrade.
Processors can and are upgraded. The current Intel Socket 775 has a variety of options available. But even moving beyond the processor, Leonard claims are mistaken. Much more on a computer is changed as technology is developed. The motherboard of a computer contains a number sockets, slots, chipsets and connectors. These, like all technology, are subjection to revision. Importantly many of the functions on a computer, like the chipset (Northbridge and Southbridge), are not upgradable, thus computers don’t change by “one little thing in the corner.” RAM, Hard drives, and a whole host of other things all need changing as the needs of computers and their users change. Computer makers aren’t changing things just to force people to buy new ones (though I’m sure they would like that), but they are also constrained by the need to innovate. Her ignorance about computer serves as another illustration of her dishonesty.
Leonard also likes to play fast and loose with the facts. She claims that happiness has declined in American since the 1950s citing one source. She connects this fact with the rise of consumerism as defined by Victor Lebow, ignoring any context of his article. She also claims that Americans have less leisure time than since the Feudal Era, as though the backbreaking agricultural and industrial labor provided immense free time and holiday pay. She claims that dioxins are the most toxic chemicals known to science despite the fact that dioxins are broad classification of toxins. Most of all she romanticizes the past, arguing that our relatives in the 1950s new about environmental stewardship and sustainability. No Annie, people just didn’t have money back in the day. Otherwise they were busy polluting the earth unwittingly.
Overall this “documentary” is a piece of garbage. It is a slick, sophisticated mix of lefty buzzwords and ignorant pontification. It presents a case to return the world to harshness our descendants worked so hard to get their children out of. There is plenty of room for criticism of corporations, government and of pollution, but this video only continues to spread ignorance of economics and reality.
