Virtue Signaling, Marketing, and Brands

Virtue Signaling:

Noun: *The action or practice of publicly expressing opinions or sentiments intended to demonstrate one’s good character or the moral correctness of one’s position on a particular issue.*

We all have come across this. The person who will not buy brand A or Brand B because of how they treat employees. Worst, the company moved their factories abroad, and they subcontract to corporations that are ten times as bad. There are many companies that fit this bill. You can say Apple is one of the worst offenders. Then there is Nike, and how they produce their tennis shoes.

Don’t get me started with Walmart. They are also usual targets of the virtuous. Full disclosure, I also avoid shopping at Walmart, but given recent developments, I may have to revise that stance.

Here is the problem with this kind of virtue signaling. Voting with your wallet is great, but you also need to become informed as to why things are the way they are. First off, if you are an American corporation, publicly traded, your first obligation is to generate profits. Your investors and the law demand this. I do not care if your corporation is a mom and pop with ten employees, and a few investors, or Apple Corporation. The legal obligations are exactly the same.

Granted, if you are a mom and pop shop, good luck avoiding taxes the way Apple, and many other large corporations do. It is not like you can hide your proceeds in tax heavens like oh Ireland. But I digress. The obligation is clear in American law, and God will not help you if your investors find out that you are not doing your level best to do this. You could be sued, and likely you will lose.

Which brings me to the next problem. How do you maximize profits? Well, let’s start with some basics. The law of supply and demand implies that you need to produce something that everybody wants, not necessarily that they need. Wants and needs are not always the same. In fact, they rarely are. However, you also need to produce it as cheaply as possible and sell it as expensive as possible. In other words, you need to maximize your profits.

This is not a new observation. Adam Smith knew of this when he wrote The Wealth of Nations. He even advised that allowing business owners to speak to each other would lead to price-fixing and monopoly practices. This is also the same man who believed living wages were a good idea, so people could afford to buy stuff. It was not the 21st-century version of consumerism, but he advocated against poverty level wages and for a maximum in pay that business owners should make. Incidentally, this was an age where laws were passed to prevent a business from paying their workers more than others in the same field. Chew on that one, if you were the best at your job, you could not be paid more than others, even if your boss thought you deserved it.

We have known this for a couple centuries. It is basic classical economics. So when people act surprised that companies have moved production from countries like the United States to places like India and China, we should not be that shocked. There is the problem though, and it is with virtue signaling.

People engaged in this practice will point to a particular company and tell you, I will never buy a product from them because…

How they treat employees.

They moved factories abroad.

They are greedy bastards.

Other reasons.

Granted, the company in question is usually guilty of some, if not all of the above. But the problem is not that you are voting with your wallet. By all means, it can help. The problem is ignoring that they are hardly alone.

A recent example online involved Apple (who are all that and then some), and Samsung, (who are also all that and then some.) The person justified their decision to never, ever, cross my heart, buy an Apple product because of how they treat their employees, and the price structure for Apple products. When it was pointed out that Samsung engages in the same exact practices, and at times employs the same factories in China, cognitive dissonance took over. Then the person got very defensive. Instead of seeing the bigger picture, I was accused of being racist. Why? Because I dared point this out, and I had to be racist against Chinese workers. Incidentally, this is a normal reaction to uncomfortable information. It is a defense mechanism.

Full disclosure, I buy apple products. They are solid products. However, I am aware of how the company behaves, and how much business they have lost to intellectual property theft as well. The only Samsung unit I ever owned was on the overheating program. I was lucky it never caught on fire. So my reason not to get a new Samsung phone is a faulty product. They are not better, or worst, and Apple is having similar issues with thinner phones, This is physics and the real limits to the batteries they use.

I also know that these two are not alone in questionable practices when it comes to employees. It is an epidemic in the industry.

Oh, and Samsung has a few quite pricey phones as well in the lineup. So the cost of the iPhone is not even the issue here, The Note 9 can sell for $1000 dollars, or more, while the iPhone X can be had for $850. Cheap, neither of them are. But Samsungs, we are told, are not built by an evil company that produces these things at Foxxcon corporation. Oh wait, they also use Foxxcon. Oopsie! And for the record, it is not just Foxxcon that has a few issues with labor mistreatment in China. The problems at the factories in Zhenzen are legion if you have followed any of the news stories. So is the more recent gentrification that is driving many of these workers out of the city. This will lead to a few interesting problems in the not too distant future, that the Chinese government will have to deal with. That is a sideshow we are also seeing in the United States as our cities gentrify. Income inequality is also producing a few interesting problems in both countries.

This is the problem with virtue signaling. You are trying to do some good and using your wallet to do it. However, when you do that, you can develop a huge blind spot, since the company you chose to consume from cannot be as bad as the one you believe is the root of all evil. Never mind the electronics industry has relied on this cheap labor practices for some years now, decades even. This is not one company trying to drive all others out, by pricing them out. It is an industry pattern that parallels the early industrial revolution in the United States and England. It even includes poor environmental regulations and labor unrest.

And now Foxxcon wants to come set up shop in the United States. If you think they are going to pay the industrial wages we used to see in the 1970s, I would not hold my breath. They are trying to set up shop in right to work states, for starters. I am willing to bet more than a few dimes, that Unions and Union activity will not be encouraged. Also, I am willing to lay good odds that some environmental regulation will be ignored. And that some of our labor laws might see revisions. These workers are competing against cheap labor abroad. And this has been cooking for some years. But JOBS!!! I know.

So what is a consumer to do? Use whatever device you feel comfortable using. Virtue signaling is not a good tactic actually unless you are willing to leave all your electronics untouched.

So what is a consumer to do? Use whatever device you feel comfortable using. Virtue signaling is not a good tactic actually unless you are willing to leave all your electronics untouched. And I mean all of them, regardless of the brand. This includes your television, your refrigerator, your coffee maker, and yes your cell phone and computer. They all have a few industrial issues involved in their manufacture.

Get informed, and start demanding that a minimum of labor standards are approved globally, and chiefly enforced. They include industrial safety programs, maximum hours worked per week, and better pay. Yes, workers in China are having wonderful eighty-hour weeks. Some of the manufactures would love to see that come to places like the United States as well. Or rather, to be fair, come back to the United States.

However, boycotts can at times work. Walmart is starting to treat their employees a tad better. Partly it is the reputation they have. Partly it is a very strong labor market, so to be competitive with that slice of the labor market, they need a few things to make them a better employer. So perhaps it is time to consider doing what I have not done for years, not because I am virtuous. This was a calculated boycott. I may have to buy some things at Walmart. This may create pressure for better conditions at Target as well. It is the size of Walmart that will help.

Also, it is time to demand that governments everywhere stop their attacks on labor unions. Oh, and it is time for labor unions to organize across borders. Corporations are global, unions should become such, beyond the International in many a union name, that is.

Moreover, we also need to be aware of why companies do what they do. Nike comes to mind. They are all but good actors in how they treat their factory employees abroad. Their shoes are made in sweatshops, and they are hardly alone. Now that they have embraced Colin Kaepernick they suddenly became either the worst evil on earth or heroes, depending on where you sit. They are neither. They are marketing to people who will wear their shoes for the next generation. Call me cynical. That does not mean they are not doing something good, but it is all in the name of profits.

Does that mean I will go buy a Nike shoe? Nope, not because I am virtuous. The price is a tad too rich for me, and they do not agree with my knees. Some shoe brands, Nike happens to be one of them, make my bad knees hurt. By the way, good for Nike, no matter how cynical the marketing reason behind this is.

But try to educate yourself. We need real changes in how we do business. Why it is critical to do far more than virtuous signaling. It will make far more of a difference long term.

Historian by training. Former day to day reporter. Sometimes a geek who enjoys a good miniatures game.

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