Sustainability vs Wealth

This weekend, I finally got around to watching the movie Wall-E, which I absolutely loved.  Pixar has some of the most amazing storytellers in “the business” today!  Who else could take a lone animated robot and make the first hour of that movie so delightful!

Before I saw Wall-E, a few articles and videos crossed my desk:

1. Washinton Post: Prices Fall to Match A New Frugality

2. The web video: “The Story of Stuff”

The first article discusses how high-end retail is dropping prices to try and keep their customers who now feel much less rich than they used to.  These stores have been hurting during the slump, as they just can’t justify such high prices for things that have only phantom psychological value. (If you can get a pair of jeans for $20, why do you need to buy the $200 jeans?  And don’t tell me it’s cause they make your backside look good.)

In the second video, I developed a much better understanding of the concept of “sustainability” that I didn’t have before.  It’s worth your time, if you can stand to wade through her activist/absolutist tone.  If you can get past her alarmism, you will note that we do have a problem in that our current production and consumption models are unsustainable.  While it’s not quite as dire as she’d like us to think, it is certainly an unsustainable way to live.  Imagine if the entire world lived like we did…

The part that really got my attention was the section on disposal – how we build and program our products to fail, and that we no longer repair anything – we simply replace it.  Take your cell phones, for example.  How many have you been through since you first got one? Me… I’ve been through about 5 phones in 7 years.  Electronics are the major culprit of the sustainability crisis, as they are cheaply manufactured and quickly become outdated or obsolete by Moore’s Law or by the fragility of the device.

But here’s the thing that really got me thinking: my job depends on us selling electronics.  Not just my job, but the jobs of the guys who resell our products, and the jobs of the guys who install and service them.  Not to mention the thousands of jobs at Best Buy, the Apple Store, and all the other retailers who depend on customer demand for the newest, most capable electronics on the market.

So here’s the key question: how does a new emphasis on frugality and sustainability affect the ability to generate wealth?  If we create our products to last forever, do we limit our ability to generate wealth in this country?

2 thoughts on “Sustainability vs Wealth”

  1. While I really hate defining wealth by how much is spent or consumed in an economy, I do admit that it does provide some indicator of the wealth being created. The easy credit card and home equity debt of the last decade has distorted this, however. Producing higher quality products that cost less and last longer will certainly foster wealth creation. The money saved will either be spent on something else (maybe something new that the person wasn’t able to buy before) or perhaps invested to truly create wealth or allow for creation of new productivity-enhancing products. The reallocation of spending will then drive structural changes in the workforce as it adapts to provide the new slate of products desired by society. The companies benefitting from newly increased sales will then create new and better jobs to replace those lost at companies producing inferior products. Then the positive cycle is underway…more corporate profits, more jobs, better raises, more spending and investing, and back to more profits.

  2. oh yeah, so here’s one of my measures of true wealth creation…why don’t we measure how we’re progressing growing university endowments such that eventually every university public and private is self-sustaining on its own investment income and doesn’t need to charge tuition or rely on tax-payer dollars. I had heard several years ago that a few of our elite private colleges were close to this point. Today, maybe not so as endowments have likely shrunk considerably due to the economic downturn.

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