Never pay retail. Here’s a good lesson in reductive economics (*), from the Wall Street Journal blog, a grass-roots movement in Greece:
Angry over food prices that keep rising even as Greece stumbles through a fifth straight year of recession, ordinary Greeks have teamed up with local farmers in a new grass-roots consumer movement to bring potatoes and other basic foodstuffs to market by cutting out the middle men.
The middle men being price-fixing wholesalers and supermarket chains, who enjoyed immense markups from the wholesale price all the way to retail:
The roots of the movement date back to late last year, when farmers in the northern Greek district of Nevrokopi refused to sell their spuds to wholesalers who were paying them 10 euro cents for a kilogram of potatoes at the same time that retailers were charging consumers between 55 and 80 cents — a markup of more than 450%.
After years of recession, giant pay cuts, and harsh economic austerity measure dictated by Greece’s credit “rescuers”, some of the people are giving a collective and indirect middle finger to the system and the state’s value-added tax.
A government proxy, meaning a member of the academic intelligentsia, doesn’t necessarily and predictably see this in a positive light:
Mr. Kyrtsis at the University of Athens has his doubts. “Despite its romantic dimension, the movement cannot last long,” he said. “Greece doesn’t operate in a closed economy, it has certain rules and with this movement, institutions, processes and jobs are bypassed. However, the movement could press for more immediate reforms.”
From the government’s standpoint, these have got to be dangerous enough developments. Why, some folks might bypass the state’s monopoly on currency and create their own. From the Guardian UK:
A couple of hours south, in the port of Volos, an alternative economic model is already up and running. More than 800 townsfolk have signed up for a local currency scheme called TEMs. Teachers, doctors, babysitters, a bookkeeper, farmers and smallholders, a decorator, hairdresser, seamstress and a lawyer are among the members. In the past couple of weeks Theodoros Mavridis, a local electrician, has not had to pay a euro for his eggs, tsipourou (the local brandy), fruit, olives, olive oil, jam, soap, and help in filling out his tax return.
What is a TEM worth? Don’t know, it’s whatever the members say it is. Much like the American Open Currency Standard (AOCS), which has a variety of silver, gold and copper barter medallions designated as “units”. The Ron Paul 1/10th gold ounce is 500 such “units”. Very cool.
The above of course is an extreme example, and predictive comparisons to North America don’t apply much. Greece is not in control of its own currency, having accepted the Euro standard. Living conditions have taken a drastic turn for the worse in the last few years, and no prospect of getting any better. Very little productive industry, or productive people for that matter, seeing how many Greeks work or used to work for the government sector.
For us, we buy try to buy local through a cooperative network, the Oklahoma Food Coop. Farmers and producers have a chance to sell directly to consumers without going through layers of distribution. Less transport costs (and fuel and highway taxes), less labor (and less payroll taxes), less environmental impact, less of everything except quality. In general, the less distance groceries have to travel to get to your table, the better they’ll be, and the less revenue the State collects (***). A win-win all around.
What do you think, readers? Will the potato movement spread, or will it peel away?
(*) Reductive economics… I made this up, but it sounds legit.
(**) Rather good food and potato-related puns in the title. Sadly, no more puns in the body the article. Could have made some more reference to “mashed” or “spud” or “fried”.
(***) and it doesn’t get any closer than your own backyard vegetable garden.
(****) The Dieng Plateau is in Indonesia. Who knew? Well, Wikitravel did.