A new book out by Ellen Ruppel Shell, Cheap: The High Cost of Discount Culture, is getting all kinds of rave reviews. Shell takes as her argument a rather counterintuitive idea: that cheap goods and services are anything but. One dollar t-shirts end up costing a lot more when you factor such purchases’ ripple effects.
From a New York Times review:
Ms. Ruppel Shell writes in her opening chapter: “The economics of Cheap cramps innovation, contributes to the decline of once flourishing industries, and threatens our proud heritage of craftsmanship”….
Moreover, Ms. Ruppel Shell argues, there’s a pervasive social effect of Cheap, though one that’s generally invisible to the consumer, whose interest is making ends meet. The money saved has to come from somewhere or somebody: from cheap labor, materials procured without regard for the environment, or just the lower quality of the product itself. Nothing, in this sense, is really cheap. Somebody is paying somehow.”
To look at it another way, Shell doesn’t see price as an indicator of quality or value.
Discount marketers have developed an arsenal of techniques to make you buy what you think is cheap but might not actually be cheap. People don’t know the prices of most things, so they assume they’re getting bargains in stores like Wal-Mart, but sometimes they’re not.