Capitalism, coke and commodities

Commodities are traditionally defined as objects possessing economic value. History tells us that the first ‘commodity’ or ‘commodities’ came from agricultural practices around 10 000 years ago. These practices included crop production and raising livestock as the human species began to farm and create settlements. From there, settlements began to trade these commodities. This system of ‘bartering’ was used for thousands of years up until the first use of currency in 600BC by King Alyattes in Lydia. Trading commodities for money has continued to develop to a point where we see the development of technological currencies known as cryptocurrencies in this modern world. It is this use of commodity trading that has transformed civilisations over time, in particular Capitalistic Western culture. This has left us with a developed world economy of global trade and indeed capitalism. However, over time capitalism has started to show evidence of inequality, exploitation and pure greed. This can be seen with the fact that the richest 85 people in the world have the same amount of wealth as the poorest 3.5 billion and that the top 1% have more money than the rest of the world combined.

As the world has continued its path of capitalism we can see the damaging effects of globalisation projected onto the food and drink industry. There are now fewer, larger suppliers and most of our food is sold in supermarkets. But it is when one takes a closer look into the relationship between a commodity and capitalism that we begin to find alarming and concerning information. Take, for example, a can of coke bought from a vending machine at the University of Wollongong, New South Wales, Australia for $2.20. The writing on the coke can explains it was prepared and canned in 102 Briens road, Northmead, New South Wales. That’s a 106km journey for the finished product to arrive too the place of purchase. As for the ingredients, the sugar cane used is sourced from Far North Queensland (2 229 km), the fruit used is transported from Adelaide (1 329.2 km) and the caffeine added is sourced from Singapore (6 307 km). The coca tea leaves are transported all the way from Sri Lanka (8,725 km). These ingredients alone are sourced from destinations which accumulate to a distance of 18 696 km away from the location of sale. As for the effects on the environment, one flight from Singapore to Sydney releases 1.2 tons of carbon dioxide released into the atmosphere and Sri Lanka to Sydney approximately 1.5 tons. The remaining 3 658km releasing approximately 1.6 tons of carbon dioxide transported by truck. This costs the earth 4.3 tons of clean air to be replaced by carbon dioxide for the main ingredients to be exploited. The refrigerated vending machine consumes five times more electricity than a normal home refrigerator with energy consumption on average from 7 to 16 kWh/day/machine. This means each bottle consumes about $.10 of energy costs in the vending machine given it meets its average sales. This impact on the environment and this transparency of information has forced Coca-Cola to respond. They have recently made a commitment to sustainably source 100% of their priority agricultural ingredients by 2020. Along with further goals to reduce environmental impact in the fields of water use, emissions and overall waste.

Continuing with research, not only do we find exploitation of the environment but also workers. Karl Marx, a major critic of capitalism believed that profit depends on the rate of exploitation of labour power. This is seen throughout the entire globe but for our example of caffeine it’s in Singapore and tea leaves in Sri Lanka. Farm workers are facing unsafe working conditions with snakes, spiders and fire ants commonly found. To add to this, these poor worker rights often see workers forced to bring their own equipment, protective gear and are almost always extremely under paid. Coca-Cola is well aware of this and since 1998 it has spent around $58 million to lobby the Federal government and millions more in contributions to trade associations too get away with these conditions. Recently, however, in a positive turn we did see Coca-Cola introduce a new Human Rights Policy which was launched on 11 December 2017. It focused on a broad spectrum of human rights components that may be associated with the company, including child labour, forced labour and land/water rights.

All of this reaches an approximate average production cost of a can of coke at 16 cents. That’s a mark-up of $2.04 for our can of coke. One of the main reasons it has such a large mark-up is because of its spending on advertisements. Coke has some of the highest amounts of advertisement spending in the world, which totals $3.3 billion each year an expense that represents 33.6 percent of net profits. This maintains its global presence with it being found in 200 countries worldwide, with consumers drinking more than 1.8 billion servings of the company’s beverage each day. This only shows the impact capitalism has had and how far it has come from a product that remained at five cents from 1886 to 1950 in the USA.

It’s fair to say capitalism and the commodity have come a long way. But once research is applied onto a can of coke and the present point of capitalism, concerning information is presented. The damage it does to our environment and agricultural sustainability is immense, along with the illegal uses of labour and political corruption. All of this demonstrates just how extreme capitalism has become and how this system is beginning to feel pressure to reform like no point in human history ever before.