Wednesday, June 23, 2010

In Which I See the World with Stunning Clarity

I believe there is more than one way to skin a cat.

I believe in freedom of expression.

I believe that Holmes was essentially correct when he said that freedom of speech was not about protecting the speech we like, but rather the speech we hate.

So I am fine with the following article on Nestle's entry into the Amazonian jungle market.

I have many things to do today and writing this post was not on my list. But as I was cleaning out my in-box, an especially disgusting news item caught my attention and writing about it is the only way I know to release my outrage. My version of screaming from the rooftop.

The offending article, on Bloomberg.com (Nestle to Sail Amazon Rivers to Reach Consumers) describes how the world’s largest food company will soon “begin sailing a supermarket barge down two Amazon river tributaries as it competes with Unilever to reach emerging-market customers cut off from branded goods.”

A supermarket barge? Has Big Food already run out of customers in cities and other locales that are more readily accessible by land? Cut off from branded goods? I don’t think these people are lost or have been camping out too long, they’re just living their lives. They probably don’t even realize they are missing out on Toll House, Raisinets, and Sno-Caps. But no matter, if there are people out there so backwards to still be subsisting on food found in nature, Big Food will find them, by land or by sea, and set them straight.

The boat, with more than 1,000 square feet of supermarket space, will journey to 18 cities, reaching 800,000 potential consumers in Brazil, and will even provide access for the disabled and elderly.

But how can these poor Bralizian residents even afford to purchase processed foods when they are probably struggling as it is? No worries, Nestle has that little problem all figured out too. According to the article:

Nestle sells 3,950 products in “popularly positioned” formats designed for low-income consumers. Smaller packs allow poor consumers to afford branded goods like richer shoppers rather than turn to generic alternatives. The Swiss company has a team of 7,000 saleswomen who peddle packs of Nestle goods door-to-door in Brazilian slums.

Translation: Because Nestle knows that poor people cannot afford the same super-sized packages commonly sold in the West, the company sells starter products to get poor customers hooked on their brands. The threat of “generic alternatives” looms large because, god forbid, these people figure out that juice is just juice and brand really makes no difference. The strategy of hooking poor people on smaller, cheaper goods is commonplace but was pioneered by the tobacco industry, which still sells single cigarettes in developing world. (The practice is banned in most other nations.)

And what, pray tell, will the floating supermarket carry? Surely, necessary food items for these hard-to-reach residents. Bloomberg.com notes, “The vessel will carry 300 different goods including chocolate, yogurt, ice cream and juices.” Yup, all the essentials. But wait maybe Nestle is taking care of the poor’s nutrition needs after all: “The company often adds nutrients such as iron, zinc, iodine and vitamin A to address deficiencies among the poor.” How heartwarming.

Nestle’s press release proudly announcing the vessel’s voyage adds:

The floating supermarket develops another trading channel which offers access to Nutrition, Health and Wellness to the remote communities in the north region of Brazil.

Who better to teach nutrition than the maker of Drumstick ice cream?

As I wrote about previously here, with Western nations becoming more and more saturated while regulatory pressures mount in the U.S. to curb unsavory marketing practices, Big Food has no choice but to step up the sales pace in the developing world. As the article explains:

Nestle had 2009 food and beverage sales growth in emerging markets of 8.5 percent, more than double the rate of its total business. The company has said it aims to boost the proportion of sales from developing countries to 45 percent in a decade from 35 percent now.

Just in case you missed that: Within ten years, the world’s largest food company will do almost half of its business in the developing world. That’s astounding by any measure of any industry.

And yes, Brazil is already showing signs of diet-related health problems. This article from Time magazine last year describes the concern over rising obesity rates found by Brazil’s own Health Ministry. While the numbers there are still small compared to here, as Nestle keeps reloading its ice cream barge to reach more “brand-deprived” poor people, it won’t take long before that gap narrows.


I don't know who Michele Simon is, but I I do know this - she is absolutely, completely, 100% wrong. And those who agree with her and the ideology which informs her comments (which regrettably informs a goodly portion of those who fall on the left side of the political spectrum) should never, ever, be in charge of anything. For all her noble ideas - and I believe she is quite idealistic and more than likely well-intentioned - it is people like her her make the world a much worse and poorer place than it need be. It is people like her who, through the law of unintended consequences, have indirectly sent millions of innocents to their deaths (albeit indirectly). It is people like her who sow the seeds that lead to the Josef Stalins of the world.

My good friend Vig would disagree with me on this point and assert than I am being too extreme in my judgment. I rarely dismiss his comments out of hand, but in this instance I believe I have history - and facts - on my side. And I believe that Miss Simon has nothing more than emotion and good intentions on hers. As such, Miss Simon is the paradigm example of the useful idiot.

Here's why:

In 1776 an Englishman named Adam Smith made the following observation:

Among the savage nations of hunters and fishers, every individual who is able to work, is more or less employed in useful labour, and endeavours to provide, as well as he can, the necessaries and conveniencies of life, for himself, or such of his family or tribe as are either too old, or too young, or too infirm to go a hunting and fishing. Such nations, however, are so miserably poor, that from mere want, they are frequently reduced, or, at least, think themselves reduced, to the necessity sometimes of directly destroying, and sometimes of abandoning their infants, their old people, and those afflicted with lingering diseases, to perish with hunger, or to be devoured by wild beasts. Among civilized and thriving nations, on the contrary, though a great number of people do not labour at all, many of whom consume the produce of ten times, frequently of a hundred times more labour than the greater part of those who work; yet the produce of the whole labour of the society is so great, that all are often abundantly supplied, and a workman, even of the lowest and poorest order, if he is frugal and industrious, may enjoy a greater share of the necessaries and conveniencies of life than it is possible for any savage to acquire.

The causes of this improvement, in the productive powers of labour, and the order, according to which its produce is naturally distributed among the different ranks and conditions of men in the society, make the subject of the First Book of this Inquiry.


Smith concluded that men, driven primarily by their own self-interest, would through some unknown force that he famously described as the "invisible hand" somehow allocate scarce resources in manner in which maximized the benefit for the whole of society. It is a simple yet impossibly complex phenomenon that has played out over and over again during the intervening centuries, and it has made the United States the richest nation on earth. By extension, the absence or suppression of the invisible hand has led to the downfall of communism and keeps a large portion of the planets inhabitants mired in poverty.

What Michele Simon sees as the purity and nobility of the simple life of the Amazonians (i.e., "people out there so backwards to still be subsisting on food found in nature") and the "unsavory marketing practices" of Nestle is nothing more than the invisible hand at work. And to that end, the people of the Amazon, and nestle, will both find themselves better off.

It really is that simple.

Will it be perfect? No. Will there be externalities and new problems created by this voluntary exchange that do not exist today? Of course.

But on balance, both parties will be better off. This is, thankfully, a fact of life.

And as for Ms. Simon? Well, I think I speak for all sentient beings when I say, simply, "Shut the fuck up you ignorant slut."

Monday, June 21, 2010

In Which I Finally Come to Understand Congress

Every Monday I spend some time to catch up on events of the Weekend, and usually make an effort to read at least one article that is philosophical or spiritual in nature (I define "spiritual" very broadly, as in it could be an article on scotch, bicycling, golf or beer).

Anyway, I came across this article, which I found absolutely fascinating and strongly recommend.

The underlying story behind the article was this: a 5'7", 270 lb. bank robber was dismayed when he was caught because he had rubbed lemon juice all over his face before the broad daylight robbery which was, of course, all caught on surveillance tape. Lemon juice, of course, is the key ingredient in "invisible ink;" he had convinced himself this made him invisible to cameras because after trying it he took a picture and he wasn't in it. Clearly not the sharpest knife in the drawer.

A Cornell psychologist who had come across this case history then asked a fateful question:

If [the robber] was too stupid to be a bank robber, perhaps he was also too stupid to know that he was too stupid to be a bank robber — that is, his stupidity protected him from an awareness of his own stupidity.


And with that knowledge you too can fully understand Congress and why its members say and do the things that they do.