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Economics and the Hershey Bar (1 Viewer)


Yesterday began as a cold rainy Friday for me when I got out of bed hungering for, of all things, a Hershey bar. It must have been the sudden intense craving for that yummy chocolate taste that caused me to get quickly dressed, grab my wallet, and, with an umbrella, walk the oft beaten one block route to the neighborhood convenience store. There I found the traditional black and white packaged candy displayed prominently among its many rivals crying out, "buy me, buy me." So I grabbed one and rushed hungrily to the checkout counter to discover that the small bit of chocolate for which I, as a child, paid 5 cents was now 79 cents. But as I was suddenly exasperated by the retail price of the item, I found myself pulling out a dollar bill, handing it to the cashier, and getting back my 21 cents in change. As I walked out of the store tearing the paper off the chocolate bar, it dawned on me that even if the candy had been a dollar, I still would have bought it.
But isn't that the way the free market works to regulate our lives according to the arbitrary values set by private industry? Perhaps the current 5.6 percent unemployment rate in America may be defined and understood better by taking a snapshot of the rise and fall of arbitrary values, or the prices set on the things the American people hold dear. As far as the Hershey bar is concerned, approximately 6,000 employees currently labor year-round in Hershey, Pennsylvania to produce the same type of candy that was made nearly 80 years ago by Milton S. Hershey. Supposedly, the quality and quantity of the original Hershey chocolate bar has not changed over the years, but the price sure has.
When I was a young boy, I regularly collected soda-pop bottles from alongside the county roads in East Texas. People then would ordinarily buy Dr. Peppers and Cokes in the ten ounce glass bottles, drink them while driving, and throw them from their cars into the high uncut grass. This was to my benefit, because in an hour's time I could find ten or more of those bottles and sell them back to grocery stores for their deposits, then 10 cents per bottle. With my pockets bulging with dimes and quarters at the end of a summer day, I would pay a visit to the candy case of my local store. With the dollar or more I had made from the bottles, I would go away from the store with ten or more Hershey, Butterfinger, or Mars bars in a paper bag. That's when candy bars were 5-10 cents each during the 1950s and 60s. At the current selling price of 79 cents, a Hershey bar, with the same size and content of the bar produced in 1955, has increased 1500 percent in value. Does this surprise you, or are you willing to casually say, "what's the difference? Everything goes up in price and I'd buy it if it were a dollar."
The poignant question festering in the back of everyone's mind, whether they want to admit it or not, is, "did the price really have to go up if the quantity and quality of the product are the same as they were in 1955?" The answer is one that almost all hard-nosed capitalists would rather not care to expound upon. Most would have it remain in obscurity, blowing in Bob Dillon's wind.
Nevertheless, the free market remains a strange rapacious beast that continually seeks its own existence, according to its widely varying appetite, without regard to who and what it consumes along the way. You might wonder if I copied the foregoing description of free market capitalism from some old book of socialist aphorisms. No, it's an original that I thoroughly contemplated before enlisting it in this essay. It's predicated upon an essential principle of human nature, greed. For instance, a grizzly bear will, by instinct, kill and eat lesser creatures only to survive and feed its young. A human being, on the other hand, will prey on its own kind by premeditation and design in order to have more than it needs to adequately exist. In fact, the human being is the only specie that will kill its own kind, as well as other species, in order to live more comfortably. The desperate burglar who ends up killing in order to steal money or valuables is a street variety of this creature. The corporate Wall Street type of this animal is an elusive sort that will prey on its victims from high in the suites, always pretending that what it is doing is best for them and the economy. All the while, the intended victims of this corporate predator scurry about in their middle-class and lower-middle-class existences doing exactly what they have been conditioned to do.
After I had feverishly downed the purchased Hershey bar, savoring its 79 cents of delight, I sat at my desk holding a Number 2 Dixon Ticonderoga Pencil. I had sharpened it in order to do some math calculations. All at once I thought of something rather profound. Though I had paid 3 cents in 1960 for a pencil of that quality, the same type of pencil, just a week before, had cost me only 4 cents. There was something very revealing in that comparison that seemed to jump out at me. Why had the candy bar increased 1500 percent in 49 years while the pencil had increased only 1.3 percent? The pervasive principle of free market economics that is at work here is the essence of public demand and how much the capitalist can greedily derive from the popularity of the product. Though it presently takes the same amount of ingredients, as it did 49 years ago, to make the same Hershey bar, the candy is considered to be worth 1500 percent more now than then. Is this because the price of sugar, chocolate, and the other ingredients in the bar have substantially increased? No. The price of the ingredients haven't gone up that much, not 1500 percent. Candy makers can currently buy their ingredients wholesale and not pay but 10 percent more than they paid in 1960. The overall cost of producing the candy hasn't gone up more than 25 percent.
In relation to the pencil, you can clearly see that the content and basic quality of the Ticonderoga Number 2 is the same as it was in 1960. The cost of producing it might have possibly increased 5 percent or less. But the popularity of the pencil has not increased as much in 49 years as has the Hershey bar. The candy maker knows that people enjoy eating candy more than using a pencil. That is why countless millions of dollars are spent by candy companies each year to advertise their quickly consumable products. They know that the American public will pay 79 cents for a Hershey bar even if it is really only worth perhaps less than 20 cents. Yet, while everyone can't eat candy because of health concerns, the whole American population uses pencils. However, I can't remember the last billboard I saw advertising pencils, though you can probably find at least one in every American home, school, and office.
What does this have to do with the current unemployment crisis? Well, American capitalists are driven by the profit motive to produce and deliver their products. This is the amount of money they get for a product after the cost of producing it is subtracted. The high point of American capitalism is finding the maximum cost for which a product can be offered which will be accepted readily by the consumer. In the same way the cost of something can be artificially raised in order to increase profits, the number of employees it takes to produce the product can be arbitrarily decreased for the same reason. For instance, the high rate of unemployment during the Great Depression occurred even though the production of essential products throughout the nation continued. The stores continued to sell these products even though there wasn't as much international trade. The wealthy people in the country, the ones with money to spend, continued to live their lavish lifestyles. A certain percentage of the workforce was retained in order to secure this level of production. Had the production levels been arbitrarily increased by the corporate CEOs at that time, unemployment would have been substantially reduced.
Presently, government employment is increasing way above the private sector. What this means is that the executive department of the federal government and state and local governments are using tax money to pay an expanding number of salaries. While tax revenues are not earned, but collected, the private sector is essentially paying for the continued proliferation of government. At the same time, the private sector is downsizing its workforce in order to increase its profits. This doesn't make sense if the cost of the increased government infrastructure is the same or more than the cost of increased corporate production. What I'm saying is that the private sector, the corporate capitalists, can successfully manipulate the level of unemployment in the country the same way it can arbitrarily increase the price of a popular product 1500 percent. They do this knowing that the American public will still buy the product at the exorbitant price, and will look forward to doing so. And when they announce that 36,000 or more employees have to be laid-off to sustain a particular level of production, the unemployed worker will docilely accept his fate and the state of affairs as inevitable. This amounts to the unfortunate conditioning of the American public through the media.
Is democratic socialism a better way to secure a quality of life for the average American worker? I look at Canada, Britain, Australia, and New Zealand and wonder whether vast corporate profits are more important than the government providing health care and the basics of life to a deserving population. These nations may not have the GNP of the United States or the vast military-industrial complex that spends the highest percentage of the federal budget to sustain a war machine, but they provide a quality of life for their citizens. In the long run, the preeminence of a nation-state is not determined by its international status, but, rather, by its ability to provide for its own. Perhaps it's time to place as much a public value on public healthcare and employment as on the almighty Hershey bar. Perhaps if we raised the value of an end to costly healthcare 1500 percent, the mandate of our Constitution to promote the general welfare would be quickly realized. At the same time, maybe the price of the Hershey bar would come down. I would hope so.

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