By Chris Bentley
Do you know how much a gallon of orange juice costs?
I know you might think it doesn’t really matter, right? Maybe you don’t care for orange juice. Or maybe you feel so passionately about orange juice that the price doesn’t matter. Or perhaps you only pay close attention to cat videos.
But I guarantee you the price does matter.
And it’s $5.77 by the way on sale at Wal-Mart right now though there are only two containers of it left online at least at my distribution center wherever that is.
That $5.77 matters to all of us because never in the history of the world could a gallon of orange juice cost so little when taking inflation into account. I’ll tell you why.
250 years ago a few countries figured out that if they replaced human labor with machines they could produce more stuff cheaper. It started with cotton and it moved into every industry from printing to automobile manufacturing.
At the time that this was first being discovered, most humans were farmers or provided goods for farming. People didn’t live very long, and their lives were hard. They scraped by enough to survive and some lucky days perhaps enough for a bit more.
Enter the industrial revolution. Suddenly, machines could plant, fertilize, water, and harvest on a scale never dreamed of before. A single person could cultivate and harvest thousands of acres of monocrops geared towards the highest yields and the highest value. So most of those farmers moved to cities where they learned how to refine stuff made up of those raw materials these machines made it so easy to spit out.
Obviously, machines don’t run on air. They run on oil. Millions of years of compressing fossils produced something marvelous: liquid that could do our work for us. So, understandably, we did what it took to find this precious liquid. Or dug up rocks called coal that we could burn to have the same result.
Communities sprung up around mines, oil fields, shipping routes, and railroad lines. Those communities needed schools, police officers, teachers and grocery stores. So more people moved into the cities and towns to provide for these services. Human ingenuity shone and people with enough grit, money, luck, brains, connections, or dishonesty got ahead while most others worked assembly lines to produce the things those genius few cooked up.
They cleared forests, laid railroad tracks, dug for more oil and coal, build universities, concert halls, and libraries in the hopes of having their names live on beyond their own brief lives, and led the way to the modern America. I have little right to complain about the industrial revolution since it led to people being able to specialize in neurosurgery and radiography which saved my life.
Now let’s return to the orange juice.
Oranges were extremely special for most of the country most of its history. See, oranges only grow in certain climates. And since for most of the world’s history we couldn’t rely on artificial ripening techniques or global trade, oranges ripened in the winter and had to be rushed to store fronts during the holidays because they had very short shelf lives. And because the distribution costs were so high, the grocers had to charge more than most could afford.
Now fast forward past the building of the Panama Canal, the construction of the Interstate Highway system, trade agreements, the invention of mega cargo ships, the rise of the science of modern agricultural techniques that produced fruits that lasted longer on the shelf and that could be picked while green and later given a breath of ethylene to sweeten them up and suddenly we had the potential to get and sell fruit from wherever whenever.
Suddenly, people could buy oranges during the summer since oranges were being picked and shipped from somewhere all the time.
So we packed our kids lunches with oranges and other fruits because that’s what good parents do. Soccer moms could bring their orange slices for after the second quarter. And the rest of us could feel better about ourselves in buying an orange with our Snicker’s bar at 7-11.
And that would be the happy ending of our story if that were truly the whole story. What doesn’t get broadcasted on screens in the produce aisle at Wal-Mart is that in order to bring an orange from Florida to Denver, a semi-truck emits about 11,000 lbs. of CO2. That liquid gold oil also has to be dug up somehow from somewhere at pretty stark damage to the surrounding geography. The oranges that come from places even further away pose an even larger dilemma because they most likely come by way of cargo ships.
And the largest cargo ships today emit the same amount of CO2 as 50 million cars.
There are also some things that modern industrial processes haven’t been able to do cheap enough to justify cutting the human element. We still need people to pick our oranges for us since orange trees are to valuable to simply rip out the tree and shake the fruit out like peanut butter producers do. Of course, thanks to modern free markets, competition compels producers to shave off costs wherever they can, so that means they seek for the cheapest labor possible.
Enter migrant farm workers.
Since migrant farm workers can make more breaking their backs picking our fruit than they can at home, there’s a good supply of labor to be utilized at low cost and high yield. That’s how we tie the bow on our miraculous supply chain called American commerce. We have cheap laborers to pick our oranges while green, they get stuffed in semi-trucks or cargo ships that spew pollutants which impacts the local and global environment in astonishing ways. Our oranges get sprayed and polished and juiced and put in plastic bottles made in China or Bangladesh, and put on the shelf for what the juice is truly worth: $5.77 per gallon.
But there’s one last character to enter the stage of our tale: a sneaky fellow called an externality. My economics teacher who was obsessed with pizza always talked about externalities in terms of the smell of the baking pizza and the extra dough that get’s tossed into the river behind the pizza factory. In our tale of oranges, our externalities aren’t quite as pleasant as the smell of baking dough.
Our externalities are things like greenhouse gases, communities with running water that spontaneously combusts, farmlands stripped of nutrients, bodies that are broken and opportunity costs that measure in lost human potential and not just lowered profit margins.
Would paying an extra dollar for our gallon of orange juice mean that it could come by way of a renewable energy source or that those picking our oranges could give their kids a better chance at a modern American education? I don’t know. But I like to think that I might be willing to give up that Snicker’s bar’s worth of income to give it a try.