Food and the Environment

What can Cost minimization lead to?

What can Cost minimization lead to?

The practice of reducing expenses can create a commodity crisis or at least dramatically increases costs of production and environmental damage

• Price of oil is set to double due to climate change

• Terrible weather conditions in olive oil production industries

Second Contradiction of Capitalism

James O'Connor's concept that cost-cutting by individual capitalists leads to increased average costs for all capitalists.

• Impacts the economy and the environment

Negative value

Increased costs or barriers to capital accumulation resulting from the depletion or pollution of environmental inputs.

Externalities

Costs or benefits of a good or service that affect parties other than the producer and consumer.

When a good or service has costs or benefits to others beyond those producing or consuming the good or service

Positive externality

Benefits that extend beyond the producer and consumer, such as with vaccines.

Negative externality

Costs that impact more than the producer and consumer.

Total cost

The sum of social cost and private cost for products with negative externalities.

Solution of reducing overconsumption

Making producers and consumers account for the social cost of a product.

• The government should levy a tax that adds to the total amount of the Social Cost

  • Therefore private companies wouldn’t make more money

Mangroves

Saltwater trees that provide shoreline protection, wildlife habitat, and carbon sequestration.

Consumer accountability

The burden of sustainability falls on caring individuals, while selfish individuals do not contribute.

Importance of Social Cost

• Cost on society is different (environmental crisis), therefore the total cost has to include the private cost and social cost

• The price will be too low without the social cost which will lead to overproduction, so too much of the product will be produced and consumed