- The Guardian
- Issue #2109
Cost of Living Crisis, Cooperative Supermarkets and capitalism
Dear Editor,
A recent report on cooperative supermarkets on the ABC found that people could reduce their weekly shopping bill by more than half by shopping at cooperative supermarkets as opposed to Coles or Woolworths. This report added to the belief that the corporate supermarkets are contributing to the cost-of-living crisis being experienced by many Australians by the model under which they operate, being maximising return on investment by shareholders and to achieve this they must exploit their suppliers, their consumers and their workers.
The corporate supermarkets try to pay the lowest price to their suppliers, charge the highest prices to their customers and pay their workers as little as possible, which in turn maximises return on investment to shareholders. This has also led to concern that this in turn is fuelling inflation as it leads to prices being higher than they need to be.
A similar process is occurring in the housing and rental market which contributes to housing stress and inflation. It does this through developers, builders, and landlords all operating on the premise of maximizing profit by setting the prices of land, rent, and houses based on what they market can bear.
Does this contribute to inflation? Yes as the price of rentals and the cost of housing frequently increase above the underlying rate of inflation – and often increasing at eye watering and heart breaking rates of between 10 and 20 per cent per annum. As long as someone is prepared to pay that rent, buy that land or house, then this state of affairs will continue. As one will quickly realise, the first and only lever which the Reserve Bank Board uses is to either increase interest rates or leave them on hold has zero effect on controlling inflation but contributes to the further aggravation of the cost-of-living crisis and the homelessness crisis being experienced by the majority of Australians.
There are solutions to this but not ones that the two major political parties – which help to prop up this state of affairs and capitalism – are prepared to undertake. At present only 1 per cent of Australians shop at cooperatives and if this number would increase to the levels experienced in some European countries where over 40 per cent of people shop at cooperatives, then the corporate supermarkets would need to lower their profit margins to remain competitive. There is a large Asian supermarket in my neighbourhood in Perth where I have seen this operate for some fruit and vegetables. The prices of certain items are half of what they are for the same items at the Woolworths about 1 kilometre away. These high prices caused by the operation of the capitalist system also contribute to other ills of society such as the climate crisis and the domestic violence crisis.
Would it therefore be beneficial for all if Australians adopted a system that did not require the operation or existence of capitalism? There is such a system. It is called socialism, and the workers own and manage the system of production to satisfy use values rather than exchange values.
Yours truly
Richard Titelius
17 July 2024
