You go to the local discount store and buy some little doo-dad. Something you probably didn’t really need in the first place, but the price was right. You happily bring it home, use it for a few weeks and…it breaks. It wears out. It’s irritating, but you shrug your shoulders and say “Well, it was cheap.” You half expected this, even if you didn’t admit it at the time. The important thing is that you didn’t pay too much for it. The problem is, in the end, you didn’t really get anything. Was the price actually even close to the actual cost of the item?
In Cheap: The High Cost of Discount Culture, Ellen Ruppel Shell discusses the history of our “discount culture”, the psychological imperatives that drive it, and reveals some of the hidden costs—some of the things that we have given up—in our pursuit for “everyday low prices”.
Shell is the author of two other books: The Hungry Gene: The Inside Story of the Obesity Industry and A Child’s Place: A Year in the Life of a Day Care Center. She is also a correspondent for The Atlantic and has written for numerous publications including Time, Discover, National Geographic, New York Times Magazine and The Washington Post. Currently she is a professor of journalism at Boston University where she coordinates the graduate program in science journalism.
A good part of the book (two chapters) is devoted to the history behind our descent into discount culture. Beginning with the need for cheap and efficient munitions after the American Revolution, we have excelled at manufacturing more while reducing costs. Appreciation for craftsmanship began to decline and goods became generic and standardized. Retailers with an almost evangelical zeal to sell for less in order to make bigger profits came to the fore in the late 1800s: retailers such as Wannamaker and Woolworth who introduced such ideas as the price tag, cheap unskilled clerks, and self-service in order to cut overhead and cut prices along with it. People’s acceptance for cheap became a demand for cheap which in turn became an expectation for cheap. In fact, we developed the ideal of a “consumer’s republic” where cheap became a patriotic right.
With the advent of low prices and the increase in technological know-how on distribution, suppliers became beholden to retailers instead of the other way around. Retailers could demand lower prices from suppliers and get them. Globalization furthered this by placing it on a global scale. Wages are reduced to ensure prices are reduced…and quality of life continues to be scaled downward…all in the pursuit of a lower price.
The most interesting chapter, entitled “Winner Takes Nothing”, details the studies done by marketing and pricing experts as well as behavioral psychologists that demonstrate how humans are hard-wired to pursue “the good deal”. Pricing is a nebulous game at best, based on emotion far above market forces. Studies demonstrate how, despite the beliefs of many economists, people often do not act in their own best interest because of emotional reactions to the innate idea of “fairness”. What is a fair price? It is the price that I’m emotionally OK with. Marketers have become very adept at tapping the psychology of the public, especially the inherent “joy of the hunt” that shopping for the lowest price gives.
The author then explores an outlet mall (or an “anti-convenience store”) in Las Vegas, discusses the global food market’s impact on “cheap” and the role that Chinese exporting has played on increasing the impact of discount culture on a global scale. All of this serves to make the point that America, and increasingly, the world, is working on a model of Gresham’s Law: bad money drives out good. And the primary reason for this is lack of information on the part of the public about the true cost of goods in capital, quality, and in human quality of life.
I wish that the author had discussed the phenomenon in which not only the quality of our goods is diminishing but even the size…a 2×4 isn’t even a 2×4 anymore, it seems. Seventy-five percent of a bag of chips is air. Canned goods that came in 14 oz cans now come in 10 oz cans, but cost the same as before. Shell offers a great overview of the big picture but lacks a lot of concrete solutions that could help in the everyday. I also would have enjoyed a discussion of the class aspects of Cheap. Many people who buy local or organic are often described as “hippies” or “too rich” to go to a “regular store”. There is some discussion of the way the almost-always rich retailers often describe the benefit discounting gives to the quality of life of the poor, but not in the way that class or social standing often dictate people’s choices of store.
In the end, Cheap doesn’t tell us much that we don’t already know. You get what you pay for. Corporate conglomeration hurts small business and the poor disproportionately. Too many of our goods come from places that do not treat their people very well. Globalization is a fact of modern life and we must adapt to it to survive. Thrifty people do not drive 15 miles to save $3 on a package of tube socks…cheap people do. These are not earth-shattering revelations. But the point is that too often we do already know these things…and we still look for the “everyday low price”. We ignore this and grow complacent; satisfied only in that somebody else didn’t get a better deal than we did. The fact that we either don’t know, or refuse to seek out, the information on how our goods are made/distributed/etc. allows these hidden costs to proliferate and skyrocket. It serves as a call to awareness and as a great start to a much needed national discussion on what we’ve given up on a discount.