The Very High Cost of Low Prices

The Very High Cost of Low Prices

The human rush to bargain stores resembles a swarm of bees. Shopping for bargain pricing has become addictive, destructive and unsustainable. The direct impact of this phenomenon on the global eco-system is colossal. So, what’s the solution?

People hate doom and gloom stories but the good news according to Michael Carolan, author of Cheaponomics – The High Cost of Low Prices (Routledge March 2014,) is that people are willing to listen if the message is driven through humor and relevant examples. Practical alternatives work even better.

For starters, he says, cheapness is an illusion. The real cost of low prices is alarmingly high. The price is usually paid somewhere else – usually by poorly-paid workers in poor countries. And environmental pollution may not be costed into goods and services, but is paid for indirectly by people living away from its source or by future generations. He says: “Even with private cars, when the total costs of this form of mobility are tallied it proves to be an astronomically expensive model of transportation. All of these costs need to be accounted for.”

The author captures these issues by the concept of ‘cheaponomics.’ “The key point is that costs and risks are socialized: we all pay for cheapness, but not at the point of purchase. Instead, we need to refocus for a better sense of well-being, social justice and a balanced approach to prosperity.”

Michael Carolan, Professor and Chair of Sociology at Colorado State University, USA, sees his book as a tool for change. It suggests an alternative economic life whose goal, if we willed it, could be human fulfillment. His other books are “The Real Cost of Cheap Food”, “The Sociology of Food and Agriculture”, “Reclaiming Food Security” and “Society and the Environment: Pragmatic Solutions to Ecological Issues”.

The big question is – how original are Prof. Carolan’s ideas in Cheaponomics when the sustainability movement around the world has made a beginning on ecological impact of manufacturing and consumption. And a good number of companies have already made a good beginning towards zero or minimal impact?

Despite these questions, making the bargain pricing business reality the central focus and target for change appears fresh. Moreover, it is a smarter way to start change of behavior. Also, the sustainability today is active at the corporate level, it is yet to sink into the retail behavior of consumers.

What Prof. Carolan wishes to achieve is overly ambitious. But he knows there’s no other way.

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