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The Quest for Cheap and the Death of Globalization

by Gordon Laird

Pub Date: Nov. 10th, 2009
ISBN: 978-0-230-61491-8
Publisher: Palgrave Macmillan

You know the economy is in trouble when you can’t find anything for a dollar in a dollar store.

Financial journalist Laird, who is from Canada, that healthier economy to the north, takes a sidelong look at the depressing—literally and figuratively—effects of the eternal quest for the cheapest possible goods. The great innovation of chains such as Wal-Mart, he says, has been to tighten the supply chain and squeeze out every spare cent, so that consumer goods have dropped significantly in price from even a decade ago. Of course, so have real wages and the value of a dollar, but it’s not just that. The economy started on a track, and in order to sustain all those bargains, we all had to consume excessively until awakened by the ugly reality of a recession bordering on depression. All that tail-chasing had some curious effects. As Laird notes, retail great Macy’s saw its profits tumble thanks to “aggressive copycat discounts,” even as its boss talked about “the relentless pursuit of newness”—as if that were a good thing. Such a system obviously cannot be sustained, writes the author, which may be one reason why we’re seeing ever more expensive goods creeping into the dollar stores of old. Under these conditions, no significant wealth creation is possible, a major drag on a capitalist system premised on that ideal. Furthermore, it’s the gee-gaws that are going for nothing, while the things we really need—food, medical care, housing, utilities—are steadily increasing in price. The “system of cheap” is broken, writes Laird, and we may look back on it one day wistfully as a chimera, since “we will very likely never shop this hard again.”

An alarm call, but not alarmist. Less fluently written, but no less valuable, than Ellen Ruppel Shell’s Cheap: The High Cost of Discount Culture (2009), which it neatly bookends.