Ellen Ruppel Shell
The Penguin Press (2009), 296 pp., $25.95
To hear Ellen Ruppel Shell tell it, what Oscar Wilde said of cynics—that they know the price of everything but the value of nothing—is true of contemporary American consumers, but not in the way that Wilde meant. Far from being practiced pessimists, we are naive optimists, says Shell, which makes us chumps for cheapness.In her dismaying and informative book Cheap: The High Cost of Discount Culture, Atlantic correspondent and Boston University professor documents how our all-American fetish for a free lunch (or at least a bargain buffet) leaves us vulnerable to exploitation by canny marketers and duped into selling out our own interests for a mess of half-price pottage. Cheap is by no means a scolding jeremiad—Shell has a lively style that makes something as dull as marketing theory actually engaging—but it will shake your confidence in your ability to navigate shopping malls without becoming a sucker.That’s because in the strongest part of her book, Shell, whose background is in science journalism, leads the reader on a fascinating, almost creepy tour of the psychological techniques discounters use to provoke a desire to buy. It’s a tour de force presentation of the history of discount retailing and the yin-yang dynamic between economics and culture. Who knew this stuff could be so interesting?It turns out that, given the high cost of materials and skilled labor, only the wealthy could afford quality goods before industrialization and mass production. In the latter half of the 19th century, Philadelphia merchant John Wanamaker pioneered the department store, which made use of economies of scale to purchase in bulk and sell at a lower price. He made his profit in volume, and observed firsthand how much affordable merchandise improved the lives of the working class.Later, retail innovators like F.W. Woolworth intuitively grasped that consumers felt prosperous when they were able to buy lots of things, and new things, no matter how cheaply made: People felt more like masters of their fates. According to one social historian quoted by Shell, Americans came in the early 20th century “to understand spending as a form of citizenship”, embracing “a material nationalism that placed goods and spending at the center of social life.” Sam Walton was only a gleam in his daddy’s eye back then, but America was well on its way to becoming Wal-Mart Country.The story of Cheap is only partly a tale of savvy retail visionaries figuring out better ways to get more goods to consumers less expensively. It’s also a tale of ingenious psychological manipulation designed to part buyers from their paychecks. Innovative retailers discovered that shoppers would buy things they didn’t need if they were convinced they were getting a deal. More recently, scientists have demonstrated the artful manipulation that prices can play on people’s deepest desires, and how logic almost always takes a back seat to emotions when deciding to make a purchase. We tell ourselves that we are rational economic actors, but scientists now know that humans are far more likely to deploy intellection to rationalize decisions that have already been made at a gut level. “We are also willing to accept flawed information and flawed evidence if it supports our beliefs”, Shell writes.Most Americans have become so used to shopping that we don’t notice what a head game it can be. Several years ago, I went shopping in the famous Grand Bazaar in Istanbul. It was a nightmare of anxiety for a shopper like me, unused to bargaining, which is how it’s done there. The whole thing made me so nervous about getting ripped off that I left without buying a thing. Having read in Cheap about the sophisticated, scientifically validated strategies U.S. stores use to give the consumer a false sense of confidence, I find it hard to imagine returning to an outlet mall without feeling like I’m back in the souk.But: so what? It’s not really news that sellers of goods try to convince us to buy things we don’t need. What Shell seeks is to tell us why this matters, and why, in our desperation for a bargain, we’re selling ourselves short—and out.Take the quality of our food. Factory farming has consolidated livestock raising, driving the cost of meat down. But there are hidden costs. Living in unnatural confinement makes animals susceptible to diseases, which require antibiotics to treat, and which can contaminate the meat anyway. Massive feedlots can cause enormous environmental problems. Cheap and plentiful shrimp come from Asian farms where they’re raised in ponds, often in disgusting conditions.Aside from health concerns, eating cheap, mass-produced food—and for that matter, buying any kind of cheap, mass-produced goods—changes our tastes, accustoming us to the second-rate. If all you eat is drecky factory-farmed meat, you come to think that’s what meat tastes like. For that matter, if you get used to books with as many errors of punctuation, spelling and even fact (Ponzi schemer Michael Madoff?) as Cheap, you come to expect haphazard editing. (And one sees this more often in books nowadays.)More seriously, Shell explains how our mania for lower prices allows us to tolerate horrible conditions for workers in other countries, as well as the steady diminishment of the American standard of living. It is by now a familiar story how America in the age of globalization has hemorrhaged well-paying manufacturing jobs overseas. In one of the most startling passages in the book, Shell shows that goods cost a lot less than they did a generation ago. She writes, “Compared with the early 1970s, in 2007 we spent 32 percent less on clothes, 18 percent less on food, 52 percent less on appliances, and 24 percent less on owning and maintaining a car.” So why aren’t we getting ahead? Because “any savings from low-priced consumer goods was more than wiped out by the rising costs of nondurable goods and services.”We can see the price tags easily enough, but it’s harder to keep our eye on abstractions like a wage decline spread out over a number of years. Along those lines, Cheap cites Nobel Economics laureate Daniel Kahneman’s fundamental insight that people tend to turn away from complex questions and ask themselves simple ones easily answered. This goes a long way toward explaining why, even though our addiction to cheap is costing us so much, we are so willing to give ourselves over to it.Plus, it can be fun, or at least it can seem that way. Shell is a pleasure to read because her tone is not Ralph Naderite hectoring; she often admits that she too enjoys succumbing to the pleasures of shopping, even when she’s aware that merchants are doing a number on her. Winding down a long Labor Day weekend road trip, I looked forward to arriving at home so I could make a shopping run to Central Market, an upscale grocery depot in Dallas. It struck me that it made no sense that, after seven hours of hard driving, I was eagerly anticipating a trip to a place where I knew I was going to have to spend a decent chunk of change. But as a foodie, I find that particular store an aesthetic joy to shop in, and have come to recognize, somewhat shame-facedly, that a shopping trip to Central Market is my primary form of recreation. As Cheap reveals, shopping-as-recreation has for nearly a century been a bedrock aspect of American social psychology—a habit expanded and deepened by Victor Gruen, the Austrian-Jewish émigré architect who invented the shopping mall in the 1950s. Add the lure of bargain-hunting, and the attraction is nearly irresistible.Though cultural sophisticates may look down their noses at proles piloting their land barges into vast Wal-Mart asphalt lagoons and trundling off in search of cut-rate merchandise, they fail to see how they too are co-opted by clever image-making. Shell slaps them hard in a devastating chapter demolishing the myth of IKEA. She could have just as easily taken a whack at Wal-Mart, every progressive’s favorite discount whipping boy. Instead, she smartly goes after the Swedish furniture and housewares giant, which has none of the image problems of Sam Walton’s stodgy, middle-American retail empire.IKEA has positioned itself as a hip, green, stylish Euro-discounter, the kind of bargain barn that people who find bargain barns tacky can patronize with pleasure. Shell demonstrates pretty effectively (all the more so because her tone is so even) that the Swedes are conducting a brilliant sleight-of-hand on their customers. Worse, perhaps, than its environmental record—which is not nearly as pristine as the company would have its customers believe—IKEA sells the idea that furniture should be disposable, that we shouldn’t expect anything more from it than a few years’ use. The IKEA miracle is convincing people that there’s something virtuous about paying for attractive but shoddy Scandinavian furniture that customers have to assemble themselves. This is part of a troubling but long-standing trend in which our valorization of low prices over value is driving out an appreciation for quality and craftsmanship. We have become so used to choosing low cost over quality that we are creating conditions in which we one day soon won’t have the choice at all.For example, my family and I live in a small Craftsman bungalow, built as working-class housing in 1914. The old house has its problems, to be sure, but after nearly a hundred years, the quality of its construction still astonishes. If you talk to knowledgeable owners of bungalows from that era, you find people who doubt that the expertise exists today to build simple structures like these sturdy houses. A Craftsman bungalow owner in Houston told me that his father-in-law, a retired engineer, used to take him to McMansion building sites and show him where builders were using substandard materials behind costly facades. Yet homeowners probably wouldn’t stay in them long enough for the houses to start falling apart around them. By contrast, the men who built our Craftsman bungalows erected them for people who fully expected to live in them for the rest of their lives.So we’re losing in the bargain an appreciation for craftsmanship and real value. Again, though: in these times, so what? Shell knows she’s got big problems trying to sell her argument amid the worst economic downturn since the Great Depression. “In these trying times”, she writes, “who but a hopeless elitist would suggest that low price is not an unassailable good?” Unfortunately, it’s hard to imagine that the impressive case she makes in Cheap for choosing value over low price will do much good in changing the behavior of people who are struggling to stretch their paychecks. Indeed, as I write this review, I’m sitting in a crummy IKEA armchair, which my wife and I knew was a piece of junk when we bought it. But like the IKEA sofa across the living room from me, it was the nicest-looking thing we could afford.In fact, for all its slapdash construction, IKEA furniture is an improvement over the stuff I grew up with in the 1970s. I completely agree with Shell’s evisceration of IKEA’s pretensions, and her criticism of the quality of its goods. But realistically, what’s the alternative? In my childhood, I recall that middle to lower-middles like my family had to make do with clothing and furniture that was just as lousy, but also ugly as homemade sin (two words: green naugahyde). Retailers like IKEA may produce junk, but it’s reasonably attractive junk. The problem even for enlightened consumers is that, unless you get lucky at a thrift store or consignment shop, it’s not easy to buy well-made furniture on a constricted budget. During the Romantic period, English designer William Morris led the Arts & Crafts movement, a reaction to the massification of consumer goods in the Industrial Revolution. The problem was that it cost so much to produce the simple, sturdy, handmade furniture created by Morris and his allies that only the well-off could afford to own it.To her credit, Shell recognizes, at least on the issue of cheap food, that there are complicating factors—availability, the price-distorting role of agricultural subsidies and so forth—preventing consumers from buying smarter. But this is more widely true. A stylish Dallas friend once confided to me that the luxury retailer Stanley Marcus long ago told his penny-pinching mother to buy the best garments she could afford, and only one of each—that value would prove a bargain. Shell would surely approve. Who wouldn’t? Yet, while no thoughtful mom actually likes to dress her kid in discardable junk from Old Navy, is it really difficult to understand why low prices make overriding sense to strapped consumers?No, and that’s the essence of the dilemma. What Shell’s important book describes is a national tragedy of the commons, in which individual consumers, all acting in their perceived best interest, weaken and impoverish the whole. The lust for low prices drives craftsmanship out of the market and manufacturing overseas, which brings cheap consumer goods back into the United States for purchase by people with less money than they had before. Where does it end—and how? University of Illinois political economist Robert Bruno warns ominously, “This thing could take us down.”There are no easy or obvious answers to the complex problems Shell has identified. No surprise, then, that the least persuasive part of Cheap is its conclusion. She praises the Northeastern grocery chain Wegmans for offering great products and solid service and paying its employees decently, all while keeping prices reasonable. Her point is that quality and affordability don’t have to be a trade-off. That’s fine, but it’s hardly an answer to the profound questions she raises about the sustainability of the current economic model.Perhaps it’s unfair to expect Shell to solve a problem that’s global in size, deeply rooted in our culture and psyche, and seemingly beyond the ability of anybody to fix. On the other hand, she points out that markets are not forces of nature, but human constructs. If history proves that command economies don’t work, it is by no means the case that we have no control over the markets we construct. Reforms have worked in the past, and though the global nature of our economy limits our political control over economic processes, we are not at the mercy of mysterious forces.One economist tells Shell that you could raise the wages of a Mexican garment worker by 30 percent while adding a mere 1.2 percent to the cost of a shirt. Why wouldn’t you, then? Because virtually the only way companies can compete with each other is on price. Every penny counts. Similarly, it’s easy to blame China for the atrocious conditions its workers labor under, churning out cheap goods for the world market. But Shell points to a successful 2006 effort by China-based U.S. business lobbies to urge the Chinese not to implement their own proposed reforms to improve the rights of woebegone workers. Human rights organizations were outraged, but in the end, the Americans knew perfectly well that their customers back home would put up with anything for the sake of cheap.Cheap spends a bit of time discussing how farm subsidies distort America’s food-buying habits, and corral us like cattle into buying food that’s not good for us, because it’s artificially cheap. This is a story told at much greater length by Michael Pollan, among others, but Shell would have done well to have explored in more detail the ways her readers could take action to change government policy, as well as to adjust their own appetites. In my house, we’ve taken to eating high-quality (therefore expensive) meat, but less of it. Somehow, the world hasn’t ended.It’s within our power to reform and improve the way we do business—but we have to want to change. That’s the heart of the matter: To convince Americans that low prices are not always a good thing, even if it’s demonstrably true, is a thankless, not to say hopeless, task. Activists have been trying to convince the public for many years that the externalized costs of their cheap goods fall on the backs of Third World sweatshop workers and on tortured animals abiding in misery on factory farms. Yes, yes, it’s terrible, people say. Somebody should do something about it. But please, don’t ask us to alter our appetites. Writes Shell, “The Age of Cheap has raised cognitive dissonance to a societal norm.” Maybe the cynics had it right after all.