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We read about the 5 reasons that stop us from making a change to an organic lifestyle here. One of the big deterrents for a switch to an organic alternative for most of us is because organic products come at a premium as compared to their traditional alternatives. But why is that the case?

You might have already read some content around this subject. Most of them talk about all or some of the following reasons

  1. That supply of organic products is restricted and hence the price is high
  2. That organic products don’t use artificial productivity enhancers and are hence produced in small batches
  3. That the supply chain and distribution of organic products are not as efficient as the more industrially produced alternatives

While all of this is true, we tried to approach this from a different perspective, albeit a visual one, to see if it registers better with our readers. Do let us know in your comments below.

Economics 101. For every (traditional) product manufactured there is an increase in the produced capital, which we measure in economic terms as GDP of a nation. Easy for us to visualize. How many cars get manufactured, how many roads and bridges get built, how much grains get produced etc. However, hidden behind these production numbers is something that is kept away from the knowledge and consideration of all consumers.

Did you know that it takes 7600 liters of water for a pair of jeans to make it through the production line *? This new year we woke up to a shocking discovery that microplastics have now been discovered even in the human placenta **.

The point is that with every increase in the produced capital there is a corresponding depletion in

  1. Natural Capital - deforestation, water pollution, industrial waste, and effluents, harm to living organisms on land and in water, reduction in biodiversity
  2. Human Capital - the harm that we bring to us in using and consuming these products. Be it the toxic cleaners that are used at home or the food products laden with pesticides and antibiotics

As against the produced capital which is tangible, natural capital, and human capital is intangible and has till now not been factored in the cost of a product. We’ve grown up paying for only tangible things. If we were to extrapolate this concept, the total cost of a product can be represented in the following way

Total Cost of Product (TCP) = Increase in produced capital (cost of inputs in making the product) + Decrease in natural capital + Decrease in human capital

An organic alternative to a traditional product (like our GreenPro certified home cleaners) have zero to a negligible negative impact on either the natural capital or the human capital because they invest in sustainable plant-based ingredients and manufacturing processes. The often ignored and hidden costs of its traditional alternative far outweigh the premium that you pay for an organic product. We may not be paying for these costs today, but these costs are as real as they can get. It’s as if we are spending this cost out of the wealth of our future self and the younger generations.

It is time that we take a more holistic approach in the way we compare the cost of products!

As Nobel Laureate Joseph Stiglitz has noted, it is very unfortunate that while a private company is judged by both its income and balance sheet, most countries only compile an income statement (GDP) and know very little about the stock side of the equation (It’s natural capital, human capital, and social capital) in the national balance sheet. It would be interesting to see the real growth in the total wealth of a nation’s capital and not just its GDP which might come at an unsustainable cost of the other 3 equally crucial factors.  

 

* https://www.thehindubusinessline.com/blink/know/it-takes-7600-litres-of-water-to-make-your-jeans/article30871977.ece#:~:text=According%20to%20researchers%2C%20a%20pair,%2Dhave%20%E2%80%94%20with%20considerable%20concern.

** https://theprint.in/science/its-like-having-a-cyborg-baby-in-a-first-microplastics-found-in-human-placenta/586956/

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