debt, crisisAre there any national or international advantages/disadvantages if companies increase their sales and people buy things for less ?
Some possible interesting ways are debt and poverty. With what actions a result like this may happen?
If you regard poverty as a snapshot on the past rather than as a condition, then some historical data from the US may be of interest.
In 1929, expenditure on food made up 23.4 percent of US household income. By 2010 that was down to 9.4 percent. (Source: USDA Economic Research Service). Certainly, there was rising prosperity in the US, but there were tremendous social changes as well.
In 1943 it took 40 adults to harvest a single row of cotton on the average American farm. 1943 was also the year the first International Harvester cotton-picking machine made its debut picking one row at a time. In 1945 it took 14 hours of labour to produce 100 bushels of corn on two acres of land. By 1987 it took 3 hours of labour to produce that same 100 bushels.
Add in mass cold chains and big-box retails stores with their sophisticated distribution systems and just-in-time production and you have exponentially-improved levels of efficiency and reduction of waste of perishable food.
All of this has a tremendous impact on the cost of living. People who spend less on food as a proportion of their income have more money to invest in material well-being and future opportunities (like education for their children).
Countries like India make the investment by large retailers like Walmart deliberately difficult even as their own small retailers are inefficient (wasting as much as 30 percent of perishable food). The FAO has recently released a report detailing the levels of food waste.
This is just detailing food, often the largest proportion of expenditure for the poor living in the less developed economies. Economies of scale, sophisticated distribution and mass investment do lead to lower prices and increased sales.
That, in turn, permits the poor to direct their savings at things that will materially benefit their lives.
All content is licensed under CC BY-SA 3.0.