The Casualties of the Price War
It has recently come to my attention that people in South Africa are going bankrupt. This is because of the price wars that are waged in British supermarkets.
To understand this, you need to see that the goal of the supermarkets is to make a profit. They do this by minimising their losses (such as the price they pay to the farmers in South Africa). However, with the price wars making the supermarkets drive their prices down, and offers of "buy one get one free" means that the supermarkets take less money than they would if they didn't do these things. However, in a Capitalist society, they must, because they wouldn't make money otherwise.
This leads to the supermarkets paying the farmers less, which means the farmers make less money and go bankrupt, forcing them and all their labourers out of work.
Isn't Capitalism wonderful?
To understand this, you need to see that the goal of the supermarkets is to make a profit. They do this by minimising their losses (such as the price they pay to the farmers in South Africa). However, with the price wars making the supermarkets drive their prices down, and offers of "buy one get one free" means that the supermarkets take less money than they would if they didn't do these things. However, in a Capitalist society, they must, because they wouldn't make money otherwise.
This leads to the supermarkets paying the farmers less, which means the farmers make less money and go bankrupt, forcing them and all their labourers out of work.
Isn't Capitalism wonderful?
posted by CJM | 9:31 AM
5 Comments:
hey,
thanx 4 visit.
no. first name dave. no desire 2 cnvert nebody. not religious.
glad 2 get message fro smbdy who's read sunzi. small quibble: not tactics but strategy.
hey, don't take that part bout besieging a city so literally. it's about proper wartime conduct: don't cut down fruit trees.
as 4 killing all men in city, looks like god's a moral relativist, no? n if u'r not prepared 2 kill every enemy, don't go 2 war.
But are the civilians, whom you have come to liberate (as they have claimed), really the enemy?
well, o course, international law sez no, don't kill civilians UNLESS THEY TRY 2 KILL U, which i think is basically wha d@ bible passage sez. wasn' it proclaim peace b4 u bsiege, give'm a chance 2 surrender, but kill all d men f they fight?
thanx 4 ur multiple visits.
i've been posting replies 2 ur comments @ my blog. i guess u don't get them.
thr oughta b an easy way 2 send back a link when u reply 2 a comment. or maybe thr is but i don' kno bout it....
on topic of ur post:
same conflict here--
farmer always wants higher prices, consumer wants food cheap as possible, middle man robs both....
d@'s what they call a free mkt.
price wars btween stores are temporary. high oil price keeps folk fro going 2 far 2 shop, so they eventually settle down n go 2 nearby place. then prices rise....
It isn't refreshing to see anyone be so patronizing.
But to the point - my folks are farmers. And it isn't the final price of their product that defeats farmers these days.
Let me try to cover this quickly:
First:
Prices are usually inflated by middlemen where processing of the crops is involved. In our case it's coffee. We sell beans ar Rs.30 a kilo and this reaches the open market in powder form at Rs.150 a kilo. The actual sale point (supermarkets or whatever) buy at Rs.110 to Rs.125. Cutting out the middleman is difficult unless you have a large enough farm to do the processing yourself. Co-operatives consisting of dozens of small farms have been created which share processing facilities, but with limited success.
Second:
Cost. It is cheaper to grow certain crops in certain countries for various reasons - cheaper labour, economies of scale (the US has an average farm at upwards of 500 acres - for us a 50 acre farm is a big deal; the just have more land and fewer people), better farming techniques to name a few. For example Vietnames coffee sells in India at Rs.15 a kilo some years.
Ultimately it's demand and supply. If you grow something that is already available in large quantities (and worse, in an inefficient manner), then you have no bargaining power and are forced to sell at whatever price you can get. There is no excuse for inablity to adapt to a changing situation. If nothing else, the SA government should be blamed for not educating their farmers.
Of course, what governments can do is protect their farmers by imposing quotas or taxes on food imports. but even this is feasible only up to a certain point, for obvious reasons. Indeed almost all counties do this.
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