What are the true costs of Capitalism?

Since the start of capitalism, capitalists have been trying to find ways to save money- cutting costs every chance they get. Capitalists have been increasing profits by externalizing costs elsewhere. Large companies use underdeveloped countries to extort resources and using other countries to manufacture their products. Companies do this because it is much cheaper to manufacture their products outside the United States. One of the United States biggest culprits of outsourcing is Apple. If Apple was forced to make all of their products in the United States, the price of the iPhone alone would sky rocket. According to an article in Forbes  if Apple decided to move manufacturing to the United States the new cost of the iPhone would be somewhere between $30,000 and $100,000 dollars. This is because the shift to domestic manufacturing would drastically affect the supply chain, and it would affect the company’s ability to mass produce the iPhone. Outsourcing has a negative impact on the environment and the economy, however, it also forces large companies to keep their manufacturing overseas.  

Apple and other large companies have been outsourcing for decades. By doing this these companies are able to mass produce their products much cheaper than they would be able to do domestically. Outsourcing is negatively affecting the environment, causing 2.2 trillion dollars in environmental damage every year. Outsourcing is also negatively affecting the United States economy by bringing millions of jobs overseas, away from American workers. While outsourcing is hurting the economy and environment, without it, the world of commerce would be drastically different than it is today. This is prime example of externalization, how business increase profits by off-loading its indirect costs.  

If Apple moved their manufacturing to the United States, this would affect the supply chain. The United States does not have the resources to have an effective supply chain. Meaning that because America lacks very specific types of jobs like tooling engineers, China is full of them. Tooling is extremely important, a tooling engineer designs machines that are essential for manufacturing . Because the United States does not focus on growing the tooling industry companies are forced to look to countries like China who have been growing the tooling industry for the past thirty years. If Apple were to move their manufacturing to the United States, it would essentially stop the supply chain. It would take the U.S. years to create the machines needed to produce Apple products and even longer to train new tooling engineers. If Apple had started by manufacturing their products domestically instead of outsourcing this wouldn’t be a problem. Apple would already have the tooling engineers and machines needed. Instead Apple chose to outsource to China, which contributes to economic and environmental problems domestically and globally.  

Cheap labor and efficient in China allows Apple to meet the supply demand of their products. Moving manufacturing to the United States would limit the annual numbers of iPhones manufactured from 100s of millions a year to 1 million every year. This would drive the price of the iPhone over 30,000 dollars. The United States can not compete with the efficiency of manufacturing in countries like China. Forcing Apple to keep their business overseas. If Apple were to move back to the United States it would take decades for the company to be able to mass produce iPhones at the scale it can in China. Because of how scarce the iPhone would become, Apple would essentially go out of business. Which could be considered a good thing. It would mean one less company outsourcing and one less company contributing to economic and environmental issues. However, in reality if Apple goes out of business, another company will simply replace it. Outsourcing puts large companies in a trap. Once companies have started outsourcing bringing their companies back to the United States is debatably impossible, the company would either go out of business or be set back years. This forces companies to keep their manufacturing overseas.  

The only real way to combat capitalism and what it is doing to the environment is through the government. If governments were to enforce the idea of manufacturing domestically, it would clearly have a negative impact on large companies like Apple. While it would put most out of business, the companies that survive would help boost the American economy. Companies would also have to follow United States environment policies, which are at a higher standard than developing countries. This would help the world combat climate change.   

Capitalism has driven large companies out of America and overseas in search of a higher profit at the cost of cheaper manufacturing. This results in the loss of jobs in the United States creating a negative impact on the American economy and has a negative impact on the environment. Outsourcing has trapped countries overseas because bringing their business back to the United States would mean risking going out of business.  

While it is clear that it would be better for United States economy and the environment if Apple and other large companies produced their products in the states, it is not as simple as just moving the companies back to the U.S. It would cause the majority of these companies to go out of business and cause the rest to rebuild their empire. Because of this companies will not willingly bring their businesses back to the United States on their own. Instead the government needs to force the companies to come back to the United States. Even though it would drastically change the consumer market in the long run, it will eventually return to how it is today. Eventually the United States would catch up to the efficiency of manufacturing that China has. However, the United States will never have a chance to grow unless its companies come back. The only way to reverse the negative effects of outsourcing is to bring manufacturing back to the United States despite the possible negative effects on large companies. Moving manufacturing back to the United States, will be much better for the environment and economy in the long run.





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