Who Pays For Cheap Products

Reuben March 23, 2016

Singapore

We, consumers want everything to be cheap. The Cheaper, The Better!

We sometimes, wonder how the purchased price of the product could cover even the manufactured cost of the product.

There is no such thing as a free lunch. At What Costs to Whom!

Michael Carolan, Professor and Chair of Sociology at Colorado State University, USA, author of several books, including 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, tells us in his latest book, Cheaponomics, The High Cost Of Low Prices that citizens are frequently subsidizing low prices through welfare support to poorly-paid workers in their own country, or relying on the exploitation of workers in poor countries for cheap goods. Environmental pollution may not be costed into goods and services, but is paid for indirectly by people living way from its sources or by future generations.

Michael Carolan finishes by describing a new game that would make most of us better off. Cheaponomics is a revelation, and Carolan concludes an engaging story with a set of practical recommendations. Governments ought to incentivize accurate pricing and enable affordability as the key to price rationalization in the market. Real cost may make goods expensive in the short term but not over the long term as these would be designed to last longer and avoid wastage. Affordability is about enabling, about capabilities and about holistic well-being rather than the shallow advantages of cheap goods.

A more radical solution to resolving the above is a shorter work week, say, 20 hours. It could go a long way to helping alleviate a number of urgent, interlinked problems: overwork, unemployment, over-consumption, climate change, empty communities (especially between the hours of 9 a.m. and 5 p.m), low levels of well-being, gross levels of inequality, unsustainable lifestyles, and the like.

Living within our (and future generations’) natural capital means. Jumping off the work-spend treadmill helps break us from the habit of living to work and working to consume. In its place, we will still find ways to achieve many of the same ends (e.g., peer-to-peer renting) while having more time to build relationships and community.
Social justice and greater well-being for all. Shorter work weeks will distribute paid work more evenly across the population. This act will have near immediate positive impacts on well-being by eliminating unemployment and long working hours while simultaneously enriching family and community relationships. In short, divesting time from the energy-intensive, socially destructive, social-capitalizing amateur economy is better for everyone: the planet, our families and communities, and future generations.
Real prosperity.Shorter working hours give us a better chance at adapting the economy to the needs of society and the environment, rather than subjugating our lives and the environment to the needs of the economy.

For individuals who wish to enjoy personal well-being, understanding “The Law of diminishing marginal utility” and consume product with maximum utility satisfaction may be the way to go.

The law of diminishing marginal utility is a law of economics stating that as a person increases consumption of a product, while keeping consumption of other products constant, there is a decline in the marginal utility that person derives from consuming each additional unit of that product.

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