Friday, June 8, 2012
Cheap: the High Cost of Discount Culture
© 2009 Ellen Ruppel Shell
A few weeks ago I read Cheap: The High Cost of Discount Culture, which is a critical history of the 20th-century trend in business toward cheaper goods. The history begins in the 19th century, with the rise of bulk retailing department stores. The existence of a business atmosphere that didn’t prioritize the lowest prices possible seems surreal to someone like myself, who came of age in the era of Wal-Mart triumphant. But according to Shell, traditional businessmen were positively scandalized by the ambitions of new retailers, who opted to make their profits by selling an enormous amount of cheap merchandise rather than a respectable amount of more moderately priced items. The new business model transformed the world, but there are consequences to every action.
Shell covers some of the same ground as was covered in The Wal-Mart Effect: the new model shifts the balance of power in business relationships from suppliers to retailers, which is bad news given that the retailers tend to be more monolithic, concentrating power in the hands of a few. Consumer expectations for cheap goods has disastrous environmental consequences: cheap is an adjective that once meant not just inexpensive, but inferior, and that meaning remains valid. The goods manufactured and sold by Wal-Mart and IKEA are produced as cheaply as possible, using the cheapest – most inferior – materials as possible. Not only do these cheaply-made goods wear out quickly, but they can’t be made into anything else. Although they cost the consumer little, they are a grave waste of resources in an age that can’t afford such waste. The costs that the consumers are spared are paid by cheap, abused labor, and the global environment. Shell also writes on price mechanisms and the psychology of selling, opining that the retailers’ success in convincing consumers that items can be sold this cheaply has distorted our concept of what things should truly cost, and ends by extolling the virtues of craftsmanship – a value I'm given to share. I despise purchasing items that won't last, or visiting stores where service is nonexistent because there the only reason people are hired is to restock merchandise and check goods out.
How convincing this is, I can’t say: The Wal-Mart Effect familiarized me with most of the key concepts. I was struck most here by the notion that we are creating garbage goods from garbage materials. Unfortunately, I can’t see that most people will decide to start buying more expensive goods, even if the discount culture depresses wages and wastes resources. However, as the 21st century progresses, the scarcity of resources will force people to use them more intelligently regardless of their wishes.
The Wal-Mart Effect, Charles Fishman
Hot, Flat, and Crowded: Why America Needs a Green Revolution, Tom Friedman