The Price of Cheap: The Hidden Cost of E-Commerce

On March 22, 2010March 16, 2022 By The Social CriticIn Economics & Globalization, Politics & Public Policy, Technology & Science2 Comments

For years “energy independence” has been the catch-all solution promoted by politicians, talk radio hosts, newspaper columnists and others who point out that the U.S. is short on oil refining capacity. Nonetheless, petroleum production facilities are not only in the process of downsizing in response to a weak economy, but permanently so the Los Angeles Times reports in “Oil companies look at permanent refinery cutbacks” [March 11, 2010].

The oil industry, which as recently as 2007 broke so many profit records that allegations of collusion and price-gouging surfaced, is singing a different tune: Limiting supply to increase sagging profit margins is the solution, analysts say, for losses induced by everything from fuel efficient cars to retiring baby boomers who no longer commute to and from work.

And to think: Just a few years ago SUVs, with their paltry ~13 mpg, were the rage from Coast to Coast. Could it be that Cash for Clunkers, unintentionally so, was a little too effective — or are oil industry insiders selling Americans up the river when they can least afford it? Whatever the case may be, nothing says Green like fuel-efficient automobiles and the beginnings of an alternative energy infrastructure. Even so, the picture the LAT paints is far from complete. The Perfect Storm of tightening supply, increasing commodity prices, rising taxes and further job losses looms on the horizon.

Hang on to your hat! The price of life is going up.

Cutbacks and closures of community services nationwide are not cited as a reason for oil refinery cutbacks, but they are egging on these emergent economic norms: Sales tax revenues are down nationwide, and for an increasing number of locals that can only mean an unpalatable combination of higher taxes and limited services. The upshot? Even less incentive for our consumer-driven economy to spread the money around. Local and state governments from California to Michigan are banking on the hope that when the economy rebounds the Red Ink will stop flowing.

Will it?

Even if the demographic shifts associated with baby boomers retiring en masse were not inevitable, a grossly underestimated component to this trend looms larger by the day: e-commerce.

It’s no secret to Internet-savvy folks transversing state lines in search of tax-free online bargains that virtual shopping can be a real moneysaver — and a timesaver to boot. Amazon, for instance, is a leading go-to place for everything from books to home and garden products. Not only are purchases tax-free for many shoppers but free shipping offers often seal the deal.

Never before has the oft-repeated refrain “Shop locally!” encountered so many challengers.

Macintosh computers aren’t cheap now, but they were downright expensive when I purchased my first Apple computer nearly 20 years ago. Back then, it was not unusual to spend $4-10K on hardware alone (CPU, monitor, printer, scanner). The solution? Peruse ads in the back of nationally-distributed computer magazines. There I located a tax-free bargain on the opposite side of the country. Even with the cost of shipping factored in, I saved several hundred dollars foregoing traditional “brick & mortar” retailers. And it wasn’t for lack of local buying options, either: There were plenty of places vying for a slice of the personal computing revolution: Computer City, CompUSA, Circuit City, Fry’s Electronics and Best Buy, just to name a few. Notice what happened, however: All but the latter two succumbed to market forces. Is this because our collective appetite for new and improved technology has diminished? Absolutely not. Americans are more likely to own a personal computer hooked up to a high-speed Internet connection than ever before.

So what changed?

Competition amongst conventional retailers has diminished as more and more players drop out of the market. This makes comparison shopping on the Internet — where a greater number of competitors are in reach — more attractive by the day. Just as Big Box Retailers threatened mom & pop establishments, the Internet is the newest bull in the china shop. To cite just one example, antique stores in downtown areas nationwide have increasingly succumbed to online venues, and bars and restaurants — among the few types of businesses that rely on irreplaceable foot traffic — have sprung up in their wake.

Just how many bars and eateries can a local economy support?

The profound yet oddly imperceptible economic influences wrought by the Digital New Age are numerous: Even as more people embrace Internet shopping, surviving B&M retailers have responded by limiting their in-store selection in favor of just-in-time inventory, of which an increasing percentage is available exclusively online. Shopping at the click of a mouse is both novel and convenient, to be sure, but nonetheless a form of “special ordering” reminiscent of the old-time General Store method of awaiting out-of-town deliveries.

Except that most of us aren’t living in remote outposts.

The Green side of the coin is that fewer and fewer products for which there is inadequate demand are oversupplied to the market, thereby limiting the so-called carbon footprint associated with building and transporting more widgets than there are consumers willing to purchase them. But the environment is not the sole beneficiary. By limiting supply, prices and profit margins are maintained throughout the supply chains. What this means for the rest of us is that the “red tag sales” retailers offer to move an oversupply of product are likely to become increasingly few and far between. Prices between the remaining chain stores are generally pennies apart, and sales leaflets that would appear to advertise discounted deals are increasingly listing regular prices.

This trend presents both an irony and a threat to bargain hunters: B&M retailers that have grown in popularity as consequence of recession-induced thrift include Ross, TJ Maxx and Marshalls — retailers that specialize in discontinued, overstock and out-of-season merchandise offloaded by department stores and boutiques. As mainstream retailers par down inventory, the number and quality of inventory available to discount retailers and Internet shopping sites alike are likely to diminish for the foreseeable future. Consequently, just as demand for bargain bin deals heats up, supplies may be harder to come by. Similarly, as consumers become conditioned to shop for “everything else” online, the convenience, expediency and tax revenue benefits of shopping locally are lost. Eventually, the advantages of web-based commerce — what with United States Postal Service cutbacks, shipping cost increases and the inevitable legislative move to tax online shopping — suggests that this bargain hunters’ paradise may amount to little more than a tool of necessity in the years to come.

Even the Internet cannot overcome a fundamentally flawed economy.

So how do our novel new shopping habits dovetail with the news that oil refiners may permanently shutter facilities? For one, less incentive to drive to the mall. Or to go antiquing in a nearby community. And if you do? Fewer places to shop, fewer products and brands in stock, and fewer still mom & pop establishments. The list of nationally-recognized retailers to meet their demise in the Globalized Era is staggering: Broadway, Fedco, May Company, Woolworth’s, Best, Service Merchandise and Marshall Fields; Circuit City, Linens ‘N Things, The Sharper Image and The Good Guys — to name but a few.

To be clear, traditional retail in some shape or form will never be eliminated. But the trend of online shopping at the expense of local sustainability seems likely to accelerate as retailers respond by narrowing their shelf offerings to match lessening in-store demands. In the even longer term, conventional shopping may again become a destination — traveling long distances to reach large, diverse retail centers that are fewer and further between. The town-by-town, city-by-city retail landscape of today may become a thing of the past, not unlike the drive-in movie theater whose heyday has come and gone. Movie rental stores seem to be the next in the obsolescence line, edged out by inexpensive DVDs sold in discount stores, video-on-demand services and novel new competitors such as Netflix. How much more “local color” will fade from our towns, cities and communities until there are few signs of life outside the ‘net — but for the cookie-cutter ubiquity of fast food joints, liquor stores and dry cleaners?

Be careful what you wish for.

The shift in the way we shop not only impacts our gasoline consumption but just about everything we take for granted close to home: from schools, parks and public safety to the ability to find a suitable last-minute gift in a mass market environment increasingly lacking in diversity. This trend, in turn, suggests an increasing number of commercial real estate vacancies and even fewer sales tax revenues for local municipalities. As retail and warehouse job opportunities erode in much the same way manufacturing jobs did in the 1980s and 1990s, even low-skill service sector jobs are likely to dwindle — all of which adds up to a torrent of Red Ink.

Is it possible to become too good of a bargain hunter? Victims, if you will, of our own success?

As a “starving student” I never would have given it any thought, yet we do, indeed, have the power to harm our communities simply by making a habit of shopping online. It’s not that making a few online purchases here or there will topple the economy, but it is fundamentally shifting the game just as surely as the trend of paperless electronic bill paying has sent the USPS into a tailspin. More ironic still, online shopping — to the extent that it is powered by coal — isn’t much Greener than the conventional sort. According to a CNN report, the more energy efficient consumers perceive their electronics, products, services and transportation sources to be the more resources we consume.

Our entire landscape, physical and economic, is in the midst of gargantuan change. Whether such change represents the evolution of a new, Green economy remains to be seen. It could just as easily represent another largely unanticipated wrinkle in the lockstep march of globalization: Economic “desertification” wherein those who live adjacent to an oasis of innovative upstarts, manufacturing plants and retailers will thrive, whereas the vast majority of Americans, even those who live in highly populated areas, will find it increasingly necessary to shop online because it is no longer profitable for retailers to maintain local operations and/or no longer feasible — as gasoline supplies contract and crude prices increase — to transport durable goods great distances from port to shelf.

Perhaps we’ll save the planet. But will we save ourselves?

Economic experts would likely argue that this is the free market at its finest — and to point out, rightfully so, that such shakeups have occurred with every major technological advance. But such observations do not get at the crux of the question: Are we entering a time in this Globalized Era at which the rate and scope of change may exceed our ability to fully appreciate the ramifications? Will a collective deer-in-the-headlights reaction render legislatures unable or unwilling to craft economic policy conducive to a successful transition?

Put another way, we can’t predict where we are headed because we have never before been there. Consequently, our best attempts to plan for the future are likely to come up short — and all the more so when motivated by the desire not to shake fragile consumer confidence. Conventional wisdom, after all, views the phenomena known as market concentration — a diminishing number of viable businesses competing for our dollar under increasingly deregulated conditions — as the hallmark of “efficiency“. Prices are lower and demands are met so no harm, no foul the argument goes. But the more apt question, the one too few of us appear to be asking — not unlike the way in which financial firms and economists alike underestimated the phenomena of “irrational exuberance” prior to the Great Recession — is whether we’ll fumble the transition because we have failed to appreciate that it is possible to take a “good idea” too far.

Call it wrong and we not only risk a double-dip recession but a generational lifestyle realignment in which a college education, white picket fence, an automobile in the garage, a chicken in the pot, and 2.5 children in the home move increasingly out of reach.

By some counts, the time to have invested in an alternative economy is some 30+ years overdue. By a more conservative measure, we’re nearly 15 years behind the 8-ball both in terms of minimizing harm to human welfare and the climactic shifts associated with the over-use of fossil-fuels. By other accounts, the solutions proposed thus far are recklessly unworthy of widespread adoption.

And that’s why a benign practice so seemingly unrelated to the permanent loss of petroleum refining capacity — shopping online — may evolve into the straw that breaks the camel’s back. The desertification of our consumer-driven economy in the absence of a fully viable way to fill the economic vacuum may very well be a phenomena we do not come to appreciate until the list of “usual suspects” no longer explains a still-lagging outlook years from now.

Of course, there will be oases in this Brave New economic landscape. But the increasing concentration of those jobs in fewer areas of the country nonetheless portends harm to communities that rely upon traditional manufacturing and retail access. And that’s not the only casualty of our worship of all things economically efficient. The otherwise worthy aim of Greening the planet may lose its luster if it comes to mean the absence of opportunity: Restricted access to goods and services. Restricted markets. Restricted tax revenues. Restricted growth. Quite possibly even the best and most innovative entrepreneurial ventures will be forced to settle for a mediocre definition of success in the event that consumers, lacking in discretionary income, spurn new products and services in reaction to lost or stagnating wages.

Will we realize the “price of cheap” before the solution to state and local tax revenue losses shows up in the form of massive tax hikes? That is the question. None of this, of course, even begins to account for the tax hike incentives that exist as a result of a decade-plus worth of war-driven Federal deficits, TARP bailouts, unsustainable trade deficits, and the empty coffers long-predicted of Social Security, among other entitlements — just as baby boomers begin to draw them down.

Even as the storm clouds gather over a still-ailing economy, a recent TIME magazine article echos a common refrain: American innovation, writes Barbara Kiviat in “The Workforce: Where Will the New Jobs Come From?” [March 19, 2010], will offset job losses in time. Let’s hope the Green 21st Century jobs we’ve been told to bank on aren’t a case of too little, too late.

###

Resources

All About: ‘Green’ Shopping | CNN

The Fight Over Who Sets Prices at the Online Mall | StarNewsOnline

The Death of Retail | The Entrepreneur Network

New Tack for Taxing Online Sales | Durango Herald News

Killing America’s Jobs Machine | Roanoke Times

The Recession could Reshape State Governments in Lasting Ways | Stateline.org

Comparing Online to “Brick and Mortar” Shopping | Buzzle.com

The Broken Society | New York Times

Customers Want it Cheap, Workers Pay Heavy Price | China Daily

The Price of Cheap Imports: What does America Make besides Policies? | WaterWorld

The Slippery Slope of Price Fixing | E-Commerce News

Sales Tax on the Internet: Who Pays, Who Doesn’t | Yahoo!

American Competitiveness: The New Untouchables or The New Half Truth?

On October 25, 2009March 16, 2022 By The Social CriticIn Economics & Globalization, Politics & Public Policy, Technology & Science4 Comments

If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. Let him step to the music which he hears, however measured or far away.
Henry David Thoreau

In “The New Untouchables “, New York Times columnist Thomas Friedman argues that in this downwardly mobile economy there is no room for average. Extraordinary is what it takes to survive and thrive in the modern workplace.

I get that.

Yet for all my appreciation for education — I hold two degrees so I do, in fact, lean in favor of Friedman’s premise that education is key to American competitiveness — his education-as-a-panacea argument oversteps its reach.

Most strikingly, Friedman’s description of a successful “untouchable” American worker isn’t a portrait of educational endowment at all. Friedman’s favorite descriptors, instead, refer to personality attributes: entrepreneur (risk taker), creative (visionary), analytical (critical thinker), and persuasive (charismatic). The obvious problem with Friedman’s pin-the-tail-on-the-wrong-donkey premise is that temperament is inborn — teachers, let alone parents, cannot instill personality characteristics that are not there to begin with.

Friedman’s eagerness to finger the usual suspects — schools — also ignores six reasons why Americans are at a competitive disadvantage in the global era. Here we examine those realities, and the future these changing times have in store.

First, there are more of us occupying this country — and this planet at large — than ever before. At some point, the mathematics of population growth have to matter. The sheer number of people in today’s workforce suggests more and more people are competing for the same jobs even as we adopt more and more technology to displace human hands. That’s not a sign of a lack of education; it’s a sign that business owners comprehend that productivity gadgets and gizmos don’t require breaks, a salary or workers’ compensation.

It comes down to the numbers.

Second, I would argue the inverse in response to Friedman’s suggestion that there just isn’t enough talent to be had here in the States. Over the past 50-some years there are more colleges turning out more graduates on an annual basis than employers of the past had access to. Many foreign nationals, in fact, come to the US for higher education opportunities. On the flip side, there are only so many engineers, M.B.A.s, lawyers, scientists and the like universities can churn out before higher-end fields become saturated in much the same way low-end jobs are chalk full of contenders.

It’s no longer merely a question of whether there are clear winners and losers on the academic front.

Job scarcity is a threat, in part, because of the decades-long trend of mergers, acquisitions and a globalized labor pool. Consider: There are generally fewer than a dozen heavyweights in a given industry — everything from mainstream media to appliance manufacturing. This trend does not bode well for domestic job expansion. And if jobs aren’t available to begin with, it is tough to gain a competitive advantage even with above-average potential. So what we are seeing, in this author’s opinion, is an over-supply of talent.

But that doesn’t mean the proponents of Friedman’s dire self-fulfilling prophecy won’t get their wish.

With less competition in a given industry there is less demand for the eager young grads institutions of higher learning infuse into the job market each year. With shrinking demand and a greater supply of contenders, salaries may also take a nosedive. America at large may become competitively disadvantaged in the years ahead precisely because the “good jobs” of today are no longer perceived as a source of steady employment or adequate pay thereby diminishing American college students’ willingness to pursue them.

Already, the very cure that causes the “employment insecurity” disease is well underway: Calls for immigration reform permitting more foreign grads to take up permanent residence in the U.S. as a form of “insourced talent” are originating from Google, Microsoft and Susan Hockfield, MIT president and author of an October 19, 2009 Wall Street Journal opinion piece ironically titled “Immigrants Create Jobs and Win Nobels“.

Sure there are a lot of average people who aren’t cut out for the highest levels of business, government and academia. Just the same, there is also an ample supply of bright, talented American citizens who, for all their desirable qualifications and qualities, will nevertheless find themselves competing toe-to-toe against peers who are just as capable and “deserving” of a career break as they are.

Somebody has to lose.

Third, failure to thrive in this Brave New Economy isn’t always linked to failing schools, as Friedman argues. Good health is arguably the number one prerequisite to productivity. Healthcare is such a hot topic precisely because we cannot remain competitive if, as a country, businesses and individuals are increasingly diverting money out of the real economy just to keep up with the skyrocketing cost of healthcare.

Beyond that, few esoteric explanations matter when perfectly down-to-earth explanations suffice. When an individual charged with hiring decisions has too many promising applicants to choose from among, what assets wins out on the last round of interviews? That extra year or two of experience? Those additional GPA points? Or would it be more honest to conclude that it comes down to how well an applicant clicks with his or her interviewers? Hands-on experience, even a social or physical attribute — whatever it may be that fits a manager’s self-styled view of the proper candidate — is just as likely to make the deciding difference.

On the flip side of the coin, there is a perverse disincentive to hire the best qualified candidates. For one, they tend to be more experienced and/or highly educated, thereby commanding greater salaries. For another, few people in the position to do so hire individuals with the obvious capacity to perform so impressively that it will ultimately threaten their own job security. Friedman is right in the sense that education and talent ought to insulate Americans from the pitfalls of a failing global experiment.

Unfortunately, it does not.

Fourth, where one lives also figures largely into one’s ability to compete. Like the tough-luck stories that abound on the streets of Hollywood, those who flock to saturated markets — Los Angeles, New York, etc. — may, ironically, find fewer opportunities to leave a lasting, positive impression due to the sheer number of people in the area who are equally worthy of consideration. An over-supply of applicants for a given position, in turn, may make it more challenging for employers to select optimal talent vs. expedient talent. Translation? Being a big fish in a vast ocean still makes you a little fish. To argue, therefore, that education can somehow imbue success and that lack of it underlies a failure is a misnomer.

It’s impossible to underestimate the economics of supply and demand.

Fifth, it’s a mistake to assume that a Third World factory worker is more “competitive” as Todd Martin, former PepsiCo and Kraft Europe executive, suggests to Friedman. Third World workers come inexpensively, and that’s one competitive disadvantage that will only heighten the more educated the American workforce becomes. Why? Because talent doesn’t come cheaply — nor do the salaries of increasingly educated job seekers struggling to repay oppressive student loan debts as a direct result of their herculean efforts to rise head-and-shoulders above the crowd.

Getting noticed in an increasingly competitive job market only ups the ante — and the price tag of success.

Sixth, the assumption that Third World products are better made by virtue of their “efficiency” is also flawed. When frequent replacements and upgrades are factored into the cost of ownership, inexpensively manufactured Third World goods are, ironically, quite pricey. Case-in-point: In 2005 I replaced a 30-some-year-old GE refrigerator made in the US as well as an old but functioning washer and dryer. If I had to do it all over again, I wouldn’t trade anything old and working for something new, sleek and modern. Why? Because the major appliances I purchased new in 2005 — all have had repeated major breakdowns requiring multiple service calls, dozens of hours on the phone, weeks waiting for parts.

Even when consumers spend top dollar, the manufacturing source and quality of today’s big-ticket items are often quite similar — with merely a change of window dressing to imply otherwise. That’s what happens when there are so many market consolidations that an appearance of choice is just that: little more than a dozen or so name badges owned, in truth, by the same handful of Big Players. It is almost laughable the degree to which consumers on complaint websites proclaim that they will never buy brand “X” again, only to unwittingly state that they intend to replace such-and-such item with brand “Y” — yet another brand or subsidiary of the very same company who manufactures brand X!

Market concentration doesn’t grow jobs any more reliably than it promotes healthy competition.

Sparing one another the hassle and headaches of poor quality goods isn’t the only reason to care, however. The build-it-to-last ethic of decades past was, perhaps, the ultimate expression of “Green“. Why? Because durable goods were seemingly less likely to break down, destined for a landfill in an absurdly short time frame. By contrast, “planned obsolescence” is the new norm, with a trend of shrinking manufacturer warranties to attest to the low vote of confidence manufacturers assign to their own products. Longevity isn’t a valued trait in a disposable society, but if we really want to go Green perhaps we should rethink the “dept-trap consumerism” cheaply designed and manufactured products facilitate. Sadly, modern rhetoric would have us believe that pride in one’s workmanship — a refusal to sell junk to unsuspecting consumers — is “noncompetitive”.

All talk of going Green aside, standardized manufacturing processes have made it difficult to make the case that company “A” is making a better product than “B” or “C”. Consequently, the maxim “You get what you pay for” has never been more suspect. True, you may get more for your money, but that does not necessarily translate into significantly better quality. What differs most dramatically is the amount of money corporations throw into slick ad campaigns, and the perception consumers have of branding and value.

It would be one thing if high-end boutiques were selling products made by First World craftspeople with higher price tags thanks to First World production costs. But when both low-end retailers and high-end retailers are selling inexpensively made foreign goods, who, exactly, are they fooling? Fairly or not, Third World origination suggests that income and human rights disparities favor corporate bottom lines. In the Third World, after all, it is not uncommon for workers to be denied bathroom breaks, sick days, maternity leave and most of the other benefits and protections Americans consider “civilized”. It is not surprising, then, that workers are more productive when they spend most of their lives in the confines of a factory, fearful that their only other option is a life of abject poverty and/or prostitution.

In short, the Third World is the modern-day economic equivalent of the pre-Civil War Old South: a place for slave-like child and adult labor, often conducted under sweatshop conditions. As if that weren’t questionable enough, outsourcing trends pose an unacceptable risk to national security as well.

So how does all of this tie in?

Unless Americans are willing to stoop to similar lows to compete with workers abroad, it’s not possible to rationally conclude that education, talent or entrepreneurship on the part of American workers will level the economic playing field anytime soon. America’s competitive disadvantage, rather, speaks to corporate opportunism — and to the politicians in recent decades who have crafted immigration, economic, trade and taxation policies that have enabled such heavily skewed commerce to become the norm.

Moreover, if being properly educated, creative or analytical adequately described, as Friedman suggests, the entirety of American competitiveness, I suspect we would see fewer reckless gambles on Wall Street and more evidence of long-range thinkers putting the brakes on short-term gain (scams) in the lead up to the Great Recession. In the real world, however, the “right reasons” are not always the cause for getting ahead — or, conversely, for falling behind.

THE WAKE UP CALL

So why care whether or not a newspaper columnists gets it so wrong? Because generalizations and simplifications aren’t a starting point for progress. Economists are projecting a ~10 percent national unemployment rate that’s here to stay for the foreseeable future. That can only mean more bankruptcies, more foreclosures and a greater amount of “dead weight” on America’s ability to compete. Only by taking a long, hard look at the unvarnished truth do we have any hope of fingering the right culprits, crafting the right solutions and ultimately reviving Main Street before the American Dream becomes a distant memory of a bygone era.

Doing nothing is not an option.

If Middle Class wages continue to decline as we move further into the 21st Century, who will consume the products and services entrepreneurs on both sides of the oceanic divide offer? Will young Americans, contemplating the grimness of their economic future and/or the need for ever-more costly and impressive academic résumés opt for traditional marriage and family life — the nation’s greatest driver of new purchases, everything from strollers and diapers to single family homes and minivans? Should Main Street’s economic House of Cards continue to crumble, will Third World workers have their own Friedmans urging them to blame themselves when factory orders dwindle and the newly affluent in Asia and India begin to see their own hopes and dreams falter? Or will they see it — we see it — for what it is: globalized economic forces beyond any single individual’s immediate control?

As kind-hearted as sweatshop proponents paint it — that throwing out more life preservers will rescue Third World residents from a life of “primitive agriculture” — building more life preservers than boats is a plausible scenario. Economic growth, after all, relies on expansion. For much of the world’s history markets were local, national, then regional. Globalization isn’t a sure-fire path to success: It’s an experiment that presupposes that natural resources will support endless growth. And it begs a simple but profound question: What happens when all markets are tapped out?

Working and Middle Class people — the majority of us — may not be the most educated, creative or adequately prepared lot, to hear Friedman and his corporate pal, Todd Martin, hash it out. But that doesn’t change the reality that the American Middle Class must earn a living wage in order for the economy — ours and theirs — to thrive. Yet it is telling that in Louisiana, a state with fewer college grads to begin with, Curt Eysink, director of the Louisiana Workforce Commission, indicates that there is an oversupply of degreed residents “we cannot employ” because job growth projections favor vocational trades and the service sector — primarily low-wage occupations such as ticket-takers, cashiers and customer service representatives that are not so prone to the insourcing/outsourcing phenomena.

Is this a sign of things to come?

Without the discretionary income Middle Class Joes and Janes inject into the marketplace, globalized economies may become relegated to a small percentage of elite income earners pitching their products and services to other elite individuals. This may be a recipe for modern-day feudalism, but it’s no way to protect and preserve the merits of free-market capitalism, let alone a profitable market share.

As dire as it all sounds, this isn’t about being pessimistic. Opening our collective eyes is the first step in defending what matters most: family, community, culture — the United States itself. If that means rethinking our definition of progress in the 21st Century sans the usual set of partisan blinders, so be it.

This is no time for subterfuge.

If Friedman wishes to talk about education, he ought to contemplate the wisdom no book learning apparently can impart in America’s best and brightest CEOs and newspaper columnists: The foresight to realize one’s employees/coworkers are also one’s customers/consumers. That means that success at the top of the economic pyramid is only as long-lived as the Middle Class foundation upon which it rests. Excuse it, deny it, defend it, ignore it: the race to the bottom is a very real risk when good intentions go too far.

It’s foolhardy — and a threat to democracy itself — for a transnational conglomerate, an economy, a nation, to conduct business using the lowest common denominator as a competitive yardstick. And yet, globalization promises to outsource gain even as it insources pain. At best, this implies that if and when international economic and trade equilibrium is achieved Third World laborers will nevertheless be unable to sustain the lifestyle Americans have taken for granted — if only by virtue of how thin finite natural resources are stretched — whereas Americans should anticipate “economic insecurity” as a way of life. That’s why Friedman and friends argue so passionately that being wildly successful — untouchable thanks to one’s creativity, innovativeness and education — is the only position of safety (familiarity). The rest of us, apparently, are destined for a mediocre economic melting pot in a neocapitalist New World Order.

Cliché though it may sound, the proactive response to an uncertain future is civic engagement: voting wisely with one’s ballot and one’s pocketbook in support the kind of economy one wishes to see. For if there’s any silver lining to this Great Recession, it’s in bringing an abstract global issue close enough to home that we can reach out, touch it — and change it.

It’s not too late.

###