Key Messages
Cheap: A Journey To The Heart Of Our Obsession With Low Prices And How It’S Destroying The World Around Us
When it comes to shopping, we often strive to find the cheapest products out there.
But in this book, you’ll learn that “cheap” can be more expensive than you think.
The author delves into the global marketplace and what is going wrong with it, showing just how low wages in East Asia have resulted in the destruction of quality and craftsmanship.
He examines why people feel compelled to buy cheap products that they know aren’t even worth their money, and how pricing experts use manipulation tactics to get us all to buy increased amounts of items.
In short, Cheap by will show you exactly how expensive “cheap” can be — and also how we can start turning things around for a better and healthier economy.
The Invention Of Mass-Production Changed The Way Society Shops And Lives
It’s clear that the economy has changed drastically over the last two centuries.
With the invention of mass-production, everything from how and where we buy our goods to everyday life was turned on its head.
Instead of going to a local seamstress or farm to purchase what you need, you can now go to a superstore and find whatever you’re looking for in an instant.
This shift is largely due to Simeon North, an American entrepreneur who first developed a way to mass-produce guns.
He split up the production process by having semi-skilled workers make individual interchangeable parts instead of one person making the entire gun, which increased quality and sped up production.
This kind of mass-production trickled down into other aspects of society as well; with more work available in cities due to factories, more people began migrating there, further accelerating the development of that mass-production.
With traditional villages no longer being practical sources for purchasing goods, the Economy had to adapt in order to accommodate this quick turn around – something it continues to do over two hundred years later.
The Pioneering Entrepreneurs Of The Industrial Revolution Who Ushered In A New Era Of Shopping
The Industrial Revolution brought about an entirely new way of shopping.
Before this time, the production of items was a time consuming and labor intensive process.
It was only accessible to those with the financial means to do so.
However, with the advancement in technology, there came an increased demand for products that were easier to obtain and cost less than before.
This gave rise to stores like John Wanamaker’s Oak Hall in Philadelphia that sold mass-produced clothing at competitive prices which could be accessed by people from various economic backgrounds.
Furthermore entrepreneurs such as Frank W.
Woolworth opened stores offering inexpensive goods though their focus shifted more towards speed and less on customer relations in comparison to smaller shops of the time.
Price tags, shopping cards and cashiers were introduced to help make shopping faster and more efficient; staff members were trained quickly instead of relying on more extensive education, while customer interactions were focused on speed rather than fostering intimate relationships with customers as was previously done.
All these changes resulted in a drastically different shopping style available to customers after the Industrial Revolution that contributed significantly to how we shop today.
Making Shopping Decisions Is Guided More By Morality And Experience Than Economics
Humans are woefully irrational when it comes to shopping.
We make decisions that aren’t based on logic, economics or sense – but rather morality and experience.
Economists developed a model of “Homo economicus” some decades ago to describe the perfect shopper.
But he does not exist.
Take for example the act of driving five miles to get cheese from a store because it was nine cents cheaper than the store near your house – rationally you spend more money in gas than you save on the cheese.
Still, this type of decision is common among us humans because we seek to avoid loss, whether that be in relationships or for something as minor as saving a few cents on cheese!
We even see this behavior displayed by other animals too.
Experiments with capuchin monkeys have been able to show they have a strong understanding of fairness.
If one monkey is given a cucumber, but another monkey is given a grape, then the first won’t hesitate to throw away their cucumber because they feel they have been cheated out of something better.
Similarly, we as humans will often reject reasonable prices if we feel someone is taking advantage of us; our emotions override our logic when making decisions about shopping.
The Psychology Of Pricing: How Retailers Use Clever Tricks To Get Us To Spend More
Companies have become very strategic in how they set prices, specifically to fool us into impulsively making purchases.
When you visit any store or mall, you will see that the price points remain generally the same – $9.99 or $109.99 for example.
This is because our brains are more comfortable with numbers like one, two, five and ten since we all have ten fingers and five on each hand.
Plus, young children can easily multiply these numbers without much thought!
Pricing experts use this to their advantage so that when we come across a product whose price is something like $999.99 (which sounds surprisingly low compared to $1000), then we’ll be more likely to impulse buy it due to the feeling of getting a “bargain.” That’s why many shops have items listed as 99 cents rather than a dollar – it tricks us into believing we’re saving money when really, we’re just spending more than we should be!
The next time you find yourself drawn towards something inexpensive in a shop, take pause and think about why it’s priced the way it is – you might realize that you don’t need this item after all!
Companies rely on our natural human tendency for impulse buying behavior but if we’re conscious of why they do it, then our wallets will thank us later!
The Perils Of Overvaluing Bargains: Why We Should Be Wary Of Cheap Prices
We humans love a bargain, even if we know it’s something that we don’t need.
A perfect example of this is when you’re drawn in by a two-for-one special at the checkout counter for a pair of plastic bracelets, even though you know that they won’t last long.
Your brain just tells you to go for it and you do, because it feels better than paying full price.
This desire to find bargains has only become stronger over time, with people now turning to discount stores to stock up on items like laundry detergent and toothbrushes every week.
We get upset when prices rises even just slightly, and continue to demand lower prices yet keep forgetting that prices have actually declined over time when adjusted for inflation.
Nowadays we pay an average of 52 percent less for appliances
How The Quest For Cheap Goods Hurts Our Economy, Education And Workers
Low prices and retail culture are both hurting our ability to innovate and taking away hard-earned rights from workers.
The constant focus on profits has stunted creative thinking as businesses prefer not to invest in innovative new ideas without immediate or guaranteed profits.
This can be seen in our education system where companies are not looking for clever, inventive employees but rather disposable cheap labour.
Another consequence of the quest for cheaper goods is a striking decline in worker’s wages; the average American salary nowadays is much lower than before, due to advances in technology and globalization allowing firms to transfer their factories and offices to countries with lower wages.
A good example of this is Caterpiller, which suffered stiff overseas competition in 1970s/1980s, pushing them to reduce wages from $40 per hour plus benefits to just $13-$18 an hour and only $9 in benefits.
It’s clear that cheap prices and retail culture have been damaging both workers’ rights and innovation opportunities – it’s time everyone joined together against this harmful culture.
The Consequences Of Cheap, Global Shipping: Exploitation Of Low-Wage Countries And Their Workers
Whoever is buying the cheap goods produced in profit-driven countries, someone else has to pay for it.
The reality is that workers in these countries rarely get the benefits of their hard labor.
In fact, ever since many companies started moving their production overseas for low wages and cheaper production costs, living conditions have only worsened for those who work in the factories creating these cheap goods.
Take China as an example: wages are deliberately held down there so that outside investors will keep pumping money into businesses and factories which keep churning out cheaper items for our shelves.
Instead of improving social systems to benefit its worker population, governments are actually exploiting their citizens by suppressing wages further.
It all started almost 50 years ago when container ships made global shipping more viable and cost effective.
Shipping containers slashed fleet management costs with a very small crew needed to manage large ships filled with 6,000 containers – with shipping costs reducing by over 90%.
Striping away $20 of every $100 was enough to make American companies consider relocating production elsewhere.
We All Have A Role To Play In Creating A More Sustainable World By Shopping Responsibly
It’s time to start shopping more responsibly.
We need to think about the social problems caused by our consumption and the impact it has on people around the world.
Take Walmart, for example.
It is well known that they have low wages, high turnover rates, and long working hours.
On the other hand, you have stores like Wegmans who are dedicated to improving affordability while providing employees with a wide range of benefits, training opportunities, health insurance and a generous retirement plan.
We need to be aware of the implications of buying products from companies that don’t consider their workers’ conditions or environmental costs.
Instead of searching for every bargain we can find, we should look for higher quality products and try to limit unnecessary traveling for cheaper goods.
This means that some companies may have to start selling higher quality products with higher prices in order to make up for better working conditions as well as less environmental impact – which is exactly what we need if we want to foster a healthier relationship with our consumption habits and alleviate suffering around the globe.
So let this be your call-to-action – everyone can do their part when it comes to making informed decisions on where they purchase their items from!
Wrap Up
The Cheap Book Summary can be distilled down to this: Society has become too obsessed with consuming and buying things just because they are cheap.
Companies exploit this mindset to trick us into buying items that we don’t really need.
This is causing environmental damage in the form of overconsumption, and individuals must take action by actively avoiding the impulse to buy things that they don’t need.
At the end of the day, it all comes down to being mindful with your shopping decisions — don’t buy something just because it is cheap, or because you might need it later.
Ask yourself whether it is something that you truly need before making a purchase.
Do this, and you’ll be helping yourself — and everyone else — in the process.
