The free market: Destroy goods rather than give them to the needy

In a democracy, it’s one person, one vote. (Of course, millions of voters are fooled into voting against their interests and for corporate interests by ads bought by candidates supported by corporations. But let’s keep this story simple.)

In a free market, it’s no income, no “vote.” People without income are invisible to the free market. In fact, the poor are worse than invisible to clothing retailer H&M:

In the bitter cold on Monday night, a man and woman picked apart a pyramid of clear trash bags, the discards of the HM clothing store that reigns in blazing plate-glass glory on 34th Street, just east of Sixth Avenue in Manhattan.

At the back entrance on 35th Street, awaiting trash haulers, were bags of garments that appear to have never been worn. And to make sure that they never would be worn or sold, someone had slashed most of them with box cutters or razors, a familiar sight outside H & M’s back door. The man and woman were there to salvage what had not been destroyed….

On Dec. 7, during an early cold snap, [Cynthia Magnus] said, she saw about 20 bags filled with H & M clothing that had been cut up.

“Gloves with the fingers cut off,” Ms. Magnus said, reciting the inventory of ruined items. “Warm socks. Cute patent leather Mary Jane school shoes, maybe for fourth graders, with the instep cut up with a scissor. Men’s jackets, slashed across the body and the arms. The puffy fiber fill was coming out in big white cotton balls.” The jackets were tagged $59, $79 and $129….

Directly around the corner from H & M is a big collection point for New York Cares, which conducts an annual coat drive.

What economic “logic” drives firms — plural because a Wal-Mart also destroyed unsold clothes the same way — to destroy brand new clothes rather than let the poor keep warm through this horribly cold winter?

If you destroy clothing, you’ve lost only what you paid wholesale (pennies on the retail dollar). If you give it away, you’re also potentially losing a customer (who’s to say who winds up wearing it?) and cheapening your brand (what fashion brand wants homeless people wearing its clothes?).

Of course, having a New York Times article depict your retail chain as heartless capitalist pigs can’t be great for business either.

Posted by James on Thursday, January 07, 2010