By Leo DiPierro
When looking to define the environmental impact and the footprint a product has on the world, there’s usually a few areas in which a person first looks. Cell phones, hamburgers, and bottled water are a few of the items that people commonly look towards as having a sustained and trackable environmental impact. However, there’s many areas in which people don’t tend to look as well. The impact of something like an iPhone might be the easiest item to track, but there’s many other facets of the world’s economy and the products that it produces that tend to go un-tracked. Something that many individuals might not immediately think to look towards is toys. Despite the enormous impact that they have worldwide, toys are something that is often overlooked in many examinations of economics. Toy industries are some of the largest manufacturing industries worldwide, and they produce millions of tons of (primarily plastic) items every year. From Barbie to board games, toys have an undeniable impact on various lenses of the economy. From the acquisition of their materials, to the production and labor involved, to the shipping and distribution worldwide, toys must obviously have some kind of footprint in a meaningful way on the economy of the planet Earth. What better way to examine that footprint, after all, than to look towards the largest manufacturer of toys on the planet. The LEGO Group, headed in Denmark, is currently the largest manufacturer of toys on Earth (TIME, 2014). This paper will examine the company’s history, the political autonomy and economy behind its spread through the western world (and beyond), and the ethics behind the manufacturing of the product itself. LEGO products themselves may initially seem like a small and ultimately insignificant product, however once the scale of the product’s distribution and production is brought into scale, the relevance of their presence in the global economy is revealed.
In the 1940’s, the company’s original founder, Ole Kirk Christiansen, established the company to produce and distribute wooden toys under the label ‘Lego,’ which comes from the Danish phrase ‘leg godt’ which means ‘play well.’ While the company still marketed and distributed wooden toys throughout Denmark in the 1940’s and 50’s, the production difficulties of sourcing wood for toys within Europe caused Ole Kirk to look towards the then-new world of plastics. Plastic molding machines were relatively new to Europe at the time, and after the company’s initial purchase of one of the new machines began the production of primitive versions of the current bricks, which were then branded as ‘Automatic Binding Bricks.’ The 1940s and 50s saw the progressive growth of the company and its introduction into other European markets. Sweden was the first country into which the LEGO group expanded, paving the way for the company to group throughout Europe. However, it was not until the 1950s that the toy began to take its current shape. Under direction from Godtfred Kirk Christiansen, Ole Kirk’s son, the company filed a patent for the products and their new interlocking tube system of construction in January of 1958 in Denmark. From that point, the company continued to expand into other European markets, not reaching across the Atlantic until the 1970s. Prior to entering American markets, the company continued to expand its focus on mass production and quality of its product. By establishing branches of the company in Germany, Switzerland, Sweden, and Norway among other countries, Godtfred managed to establish a strong foothold in European toy markets by the time the 1970’s rolled around. In 1973, the company reached an agreement with its previous distributor, the luggage-producing Samsonite Corporation, to re-acquire the rights of distribution for its product in American markets. In 1975, the company established its headquarters in Connecticut, to a presence that was far smaller than their operations in Europe. The 1970’s saw some stagnation for the company, which had continued to grow since the 1950’s. Kjeld Kirk Christiansen, the third generation of LEGO’s family, took hold of the company from the late 1970’s until the mid-1980’s, when the first head of the company not of the Christiansen family was made CEO. The late 20th century was a tumultuous time for the company, primarily after its pronounced growth through the 1980’s. In the mid-late 1990’s, the company’s figures began to slip into the red with pronounced deficit, and rumors of bankruptcy were floating within upper management. However, change in management structure and acquisition of licenses like Star Wars helped the company return to profitability, and by 2004 Kjeld Kirk Christiansen was CEO once more, and helped to drive the company to its current status. Since the 1990’s, LEGO has established its presence in worldwide markets and has used the acquisition of popular licenses to drive its products forward, and cement its presence in the global toy market. As of today, it is both the largest toy and the largest tire manufacturer on Earth (CNET, 2012) and continues to expand its presence throughout the world.
As with any company, to understand how it has garnered its current status and expanded, one must examine the political economics behind growth. The LEGO group has maintained its position as a family-run company and has historically maintained a relatively open and transparent approach to business as far as management and production go. Controversy is not unknown, however, and the company has received criticism for a number of its decisions in the past. Historically, the production and distribution of LEGO bricks had occurred within European factories. As of the 21st century, however, the company has spread into distribution and production in countries like Mexico, China, and regions of Eastern Europe. One other political criticism the company has received has been from the organization Greenpeace. LEGO has maintained a contract with the Shell Oil Corporation since the 1980’s, for both Shell’s logo to be used in various LEGO kits (gas stations, race cars, etc.) and for the toys to be distributed at Shell gas stations. However, as of 2014, the company will no longer renew its contract with the oil company (The Guardian, 2014). Additionally, the company has also had to deal with a myriad of copycat products. Particularly in Asia, where copyright laws are often more lax on companies within the region, LEGO has pursued a copyright case that could potentially become a landmark for products experiencing Asian copies. In a press statement after the conclusion of the suit, vice legal president of LEGO stated the event would create a “…favorable business environment for all companies operating in the Chinese market.” (BBC, 2017) Prior to this case, the LEGO Group had already expanded their production into the Chinese market. In late 2015, the company opened a landmark factory in Jiaxing, outside of Shanghai. Internationally, this is the first time the company has had both a presence in China and prior legal process to distribute its products and minimize interference from fake products. Politically and economically, this creates an interesting scenario that may prove to increase the company’s growth and presence in these new markets.
Manufacturing plastics is something that quite simply can’t be environmentally sustainable. LEGO’s plastic agent, ABS, is made with oil as its primary ingredient. In researching who supplies the LEGO group with the oil necessary to compose their unique blend of ABS plastics, I discovered that Bayer AG is the primary supplier of oil to LEGO. This is particularly interesting on a manufacturing and ethical level, as Bayer both owns Monsanto and has a history of dealing with various oil companies and their respective pipelines, as well as producing agricultural herb and pesticide products (Stokes, 2006). Ethically, there is little chance that all the pipelines through which Bayer, and by extension LEGO, acquire its oil from are built on land rightfully acquired by those who own it (A situation seen with the DAPL in the United States). However, without access to a detailed record of where LEGO acquires its oil supplies directly from, there is no distinct way of knowing this. Fortunately, the company is turning away from oil as a supply for their product. In 2015, the company pledged over 1 billion Danish kronor in an effort to find suitable and sustainable raw materials for use in their products (Quartz Media, 2015), so as to uphold the quality of materials which the company has long been known for. However, this is not to say that LEGO is free of any environmental woes. Its factories undoubtedly product a great amount of atmospheric pollutants, as does the distribution network in order to ship and sell the toys worldwide. Additionally, as plastic does not decay, there is the waste factor to consider. Though LEGO tends to be a longer-use product, often collected and stored rather than being directly thrown away, it is reasonable to assume that some percentage of plastic garbage is composed of the company’s bricks, as the company has produced enough bricks for over 60 per person on Earth (TIME, 2008).
As a product and a service, LEGO is remarkably ethical as far as companies go. The company’s embrace of sustainable alternatives is surprising in an age of climate denial by powerful forces, and though pressured externally it was also a surprise to see LEGO end its multi-decade contract with Shell. Of course, relative good does not equal being completely guilt free, and the sourcing of the company’s labor and materials still brings some concern to light. While no company in modern capitalism is ‘clean,’ per say, LEGO seems as if it possesses the beginnings of the structure that could make an ethical company possible. As a product, it is fortunate that LEGO’s versatility allows it to be interpreted as an educational material, a hobby, and a tool for conveying even art. It’s truly remarkable that something as seemingly insignificant as a series of plastic bricks has grown in such a pronounced manner over the course of little over half a century, and that the group still contains much potential for future development with their pronounced presence in the global toy economy.
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