It’s probably not fair to comment on a book I’ve never read, but here I go. I am basing most of my specific comments off of Richard Bernstein’s piece in the New York Times. In any case, Ellen Ruppel Shell, a correspondent for the Atlantic, has written a book called Cheap: The High Cost of Discount Culture, in which she argues that America’s drive to cheap, discounted good is detrimental to society overall. Her main point is that cheap goods end up lowering wages, preventing innovation, and hurting the environment.
I have not read the book, but her arguments are certainly not her’s alone, and the first two points, at least, seem to stem from a fundamental misunderstanding of economics. Simply put, there is no reason to think that cheap goods lower wages. The implication is that if people purchased an expensive bookshelf that is handmade, workers would earn more money than if someone purchases an Ikea bookshelf. This logic is faulty in at least two point. First, is that wages are not based on the end product’s price. Wages are based on the relative levels of supply and demand for labor for that particular job. In other words, if Ikea were to double its prices, the factory worker who makes the bookshelf would see exactly zero dollars of that increase.
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