Money Talks: A Book Review: Cheap, The High Cost of Discount Culture

Ellen Ruppel Shell takes on the mindset of low prices means better competition and a healthy economy in her book Cheap. As a reporter and a self-confessed happy shopper, Shell dove in to the questions of cheap in American, and global, culture. What she uncovered is both chilling and fascinating.

Turns out, we all love a bargain and it is not just a monetary thing. There are physiological and psychological factors in play, and the big business boys are studying those things. There is big money in understanding why and how people spend their money. Shell explores studies, conferences and anecdotes as well as history to discover what makes the discount model so appealing.

The book doesn’t look at just one area – food, household goods, furniture – all are investigated. She looks at the top discount stores and the most successful stores to see how they make it all happen. But she also looks at our love of ‘luxury foods’ such as shrimp. She uncovers some uncomfortable truths about some companies, and probably some things that most of us know but don’t want to acknowledge.

I like that the book doesn’t berate but presents the facts. Through interviews, numbers and studies Shell reveals the culture of cheap and how it is impacting society as a whole. And what she reveals is scary, no doubt about it.

As she discusses how competition has forced so many companies to cut cut cut in work-force, benefits, quality and more, she looks at the impact this has had: “As citizens we recognize this ‘collateral damage’, deplore it, and frequently decry it. We rail against exploitation of low-paid workers in Asia as we drive twenty minutes to the Big Box to save three bucks on tube socks and a dollar on underpants. We fume over the mistreatment of animals by agribusiness but freak out at an uptick in food prices. We lecture our kids on social responsibility and then buy them toys assembled by destitute child workers on some far-flung foreign shore. Maintaining cognitive dissonance is one way to navigate a world of contradiction, and on an individual basis there’s something to be said for this. But somehow the Age of Cheap has raised cognitive dissonance to a societal norm.”

As society has accepted lower wages and lower-quality manufacturing, we have lost experts and craftspeople. Shell points out that newspapers report on business, but not labour. We expect our things to break down and know that it is cheaper to replace them than to fix them, if we could even find someone to fix them. Gone are the neighbourhood fix-it shops, the furniture makers and the cobblers. Shell also asks why it seems that we equate quality with high expense and affordable with low quality. Why is there no middle ground any more?

“Cheap is a two-sided coin. Tails is Whole Foods and other chains promoting the oxymoronic ideal of affordable luxury. Heads is Wal-Mart, Target, outlet malls, dollar stores, and other low-price brokers. These supposedly opposing entities actually bolster each other, creating the false impression that quality and everything that goes with it must by definition be expensive. This, of course, rationalizes both business models: If we want quality, we go one way; if we want value, we got the other. What is missing here is what we used to take for granted – what my mother called ‘the happy medium’.”

In the end, Shell is asking us to step away from the dissonance and to acknowledge the realities that low prices have created. And prices are lower, in general, than they were 30 years ago. We pay less for many, many items than our parents did. We expect way more ‘stuff’ for our money now, whether that be pretty furniture or shrimp at all-you-can-eat restaurants. The big question: Is it sustainable?

Definitely a book worth reading.

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