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Anis Shivani

Anis Shivani

Posted: July 23, 2009 03:28 PM

Are IKEA, Outlet Malls, Wal-Mart, and Whole Foods Really Bargains?

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Cheap: The High Cost Of Discount Culture
By Ellen Ruppel Shell
Penguin Press, 296 pages. $25.95

American consumers are being taken for a ride. Ellen Ruppel Shell, in her persuasive new book, argues that "Shoddy clothes, unreliable electronics, wobbly furniture, and questionable food have become the norm. We pay less for these products than we would for their quality counterparts, but not so much less that we are getting a really good deal. As good stuff drives out bad, the market for quality goods shrinks, making the good stuff all the more costly." Cheap is in fact expensive, and the cheaper the bargain appears to be, the more costly it is. Gresham's Law (bad money drives out good) applies in full force, as the "happy medium" of quality goods at reasonable prices becomes extinct in favor of unsustainable polarities.

Ruppel Shell's is one in a growing genre of books that we might call rooted in the "anxiety of impoverishment," as opposed to the "anxiety of affluence," which marked popular social science from the 1950s until almost the end of the century. Postwar American social thinkers wondered whether we were missing out on the spiritual dimensions of life, as David Reisman, Betty Freidan, Vance Packard, Daniel Bell, and Christopher Lasch took on the false comforts of happy consumerism. Affluence is a facade for these thinkers, but they don't argue that affluence is shoddy. In the pre-globalization age, social thinkers had the luxury of speculating about the luxuriousness of luxury.

Since the mid-1990s, however, as information-driven globalization has been in full swing, a new kind of polemic has taken hold. It suggests that we are not actually affluent, but poor. Eric Schlosser, Michael Pollan, and Barbara Ehrenreich have written some of the paradigmatic texts. Slowness, localness, quality, authenticity, and the search for a means to bypass globalization's race to the bottom unify the new polemic. Ruppel Shell's book is very much in this vein, as she looks at how the mania for low prices engenders destructive consequences for our health and happiness.

In the early chapters, Ruppel Shell sets the stage for how we became so obsessed with cheapness. At the turn of the century, leading retailers were reluctant to be seen as discounters. In a classic application of Gresham's Law, the innovations of heavy discounters like Eugene Ferkauf forced more staid retailers to imitate cheapness. Ruppel Shell's chapter on behavioral psychology makes the point that pricing is not objective, but is "about context" -- malleable and fluid, depending on the circumstances. Our unconscious minds are easily manipulated by the advanced techniques of marketers, so that we become addicted to cheap.

Ruppel Shell's chapters on outlet malls and IKEA are her best, as she grounds her critique in the realities of these two consumer fads. Outlet malls trade on our brand insecurities. "Discounters like Crescent succeed by offering the perception of value using two signals: one, being situated in an outlet mall associated with so-called premium brands, and two, setting very high reference prices." But, as with Las Vegas, "outlets are nearly impossible to beat." Ruppel Shell discovers that goods sold in outlet malls are generally of lower quality than the original brands: "Roughly 80 percent of the goods sold at Coach outlets are lower-end pieces manufactured specifically for these stores."

IKEA has pulled off a greater deception, convincing "millions of people around the world that mass-manufactured furniture that looks, feels, and smells like extruded Lego blocks is not only affordable and stylish but soulful." One of cheap's greatest costs is the deskilling of labor. In IKEA's case, "centralized capital, not craftsmanship, is where the power lies." Cheap requires the consumer to adopt the traditional functions of the seller: "Outsourcing to the customer critical functions -- service, delivery, and assembly -- keeps prices low by avoiding the cost of wages and benefits." Cheap is wasteful, because "cheap objects resist involvement," and so we don't take care of IKEA products. The tendency has spread: "We expect our cell phones, our computers, our MP3 players to be worry free, to run perfectly with minimal intervention, but only for a certain period." IKEA has somehow convinced consumers that it is an environmentally responsible organization, but its team of "forestry experts to monitor its suppliers" is minimal. What IKEA represents is "predictable uniformity in the guise of novelty; design without craftsmanship; the customer bending to accommodate the commodity."

Cheap is expensive in other ways. Wal-Mart has been praised for saving the average consumer a few thousand dollars a year. Aside from how we evaluate the quality of Wal-Mart goods, any such savings are more than offset "by the rising costs of nondurable goods and services." "Cheap eats" are incredibly expensive, in what they cost us in sustainability and health. All-you-can-eat shrimp, such as at Red Lobster, are a perfect example. Shrimp used to be rare and expensive -- before we turned Thailand into the world's base for shrimp farming, supplementing "natural feeds with nutrient slurries, chemicals, and antibiotics." Cheap clothing at Wal-Mart comes tagged with realities we do not want to see. As one international labor law expert told Ruppel Shell, "The severe exploitation of China's factory workers and the contraction of the American middle class are two sides of the same coin." The contrast between behemoth Whole Foods, which is increasingly less friendly to local farmers, and East Coast grocery chain Wegmans, which "identifies with the local food movement," is another example of how easily we delude ourselves.

Ruppel Shell's lament is for the presumed nirvana of Fordlandia, where workers in the homeland manufactured products that worked, in return for wages that at least allowed them the possibility of choosing tasteful, elegant, and healthful goods. Globalization, which permits multinational corporations to bypass both sides of the bargain -- quality goods and high wages -- makes a return to the old regime inconceivable. Our manipulation by pricing mechanisms and marketing techniques is one side of the equation; much more intractable, and not prone to structural alteration, is the very edifice of globalized capitalism. Low prices, for Ruppel Shell, are a distraction, much like the Roman bread and circuses. But a distraction from what?

It's possible to see low prices as a survivalistic necessity; people realize they are consuming harmful substances, but the human body needs enough energy to maintain itself, hence McDonalds and Wal-Mart. The human mind has perhaps been broken enough to offer the body as a voluntary sacrifice in the race to the bottom; humiliation and submission have been internalized, and the search for cheap is a small aspect of the psychological defeat the worker silently endures, until he meets an untimely end due to some avoidable disease. Ruppel Shell is correct that "'Everyday low prices' are built on everyday crumbly lifestyles, not only for Mexican cloth cutters and Thai shrimp farmers and Chinese toy makers but for all of us." But cheap is a result of vacuous lifestyles, not its cause, or even the major motivator.

If consumerism has come to replace citizenship -- as scholars have recently been arguing -- then more than switching off cognitive dissonance, as Ruppel Shell suggests, will be necessary to overcome the Age of Cheap. Ruppel Shell rightly notes that "we freak out at an uptick in food prices," but we complain because we know we're not getting better quality in return. In the middle years of the century, when consumerism on an installment plan was taking root, emigre scholars helped establish consumer studies, lauding the U.S. consumer as an antidote to the ideologically driven European worker. The choice seems to come down to fascism versus consumerism, leading to tough questions: What are the real factors preventing knowledge on the part of consumers? Aside from behavioral psychology, are there structural reasons why we focus too much on price? Is cheap a form of exerting lost control over our lives? Can the poor afford sustainability, accountability, and responsibility?