Today's Wall Street Journal has a long piece about Coca Cola's alleged environmental infractions in India, where the company's plants are believed to leak toxins into local water supplies when they are not simply using up all the water in the area. The company feels that they are unfairly targeted -- that protesters have a problem with globalization rather than their environmental record, and there's probably some truth to that. But the protestors probably don't see much of a distinction: Having your country sullied with a foreign brand is a kind of pollution of the cultural environment -- sure, Coke's misdeeds are not as serious as Bhopal, as has been histrionically alleged, but it is invasive pollution nonetheless, a kind of dumping the destroys local businesses and local ways of life. (A hypothetical question: Suppose all the fast food restaurants in America were suddenly transformed into Chinese take-out stands -- would Americans start protesting? Would they even notice?) Globalization is a kind of environmental destruction, if you find something sanctified in local, organic modes of life.
But what shocked me in the story (apart from the stunning willingness of the Journal to entertain the possibility of corporate wrongdoing) was the detail that it requires four liters of water to make a single liter of Coke. That's shocking because when I go to the grocery store, the water that Coke is peddling is always more expensive than the brackish sugar-water that sails under the flagship brand name. What is going on here? Why is Coke cheaper than water when it takes so much water to make it? Is it that Americans are just dumb enough to pay that much for water? Is it that Americans don't appreciate the value of water unless it has a big price tag attached to it? Who will stop the madness? Any economists out there reading, I would truly appreciate an explanation of this. Thanks.