Authors: Ellen Ruppel Shell
Cheap (43 page)
132
“that the masses could afford to buy them”:
“Welcome to Almhult and Linnebygden,”
Almhult Tourist Information Office
, Almhult, Sweden.
“that the masses could afford to buy them”:
“Welcome to Almhult and Linnebygden,”
Almhult Tourist Information Office
, Almhult, Sweden.
134
mountain bikes for Christmas:
Julia Finch, “Democratic by Design,”
The Guardian,
June 1, 2002.
mountain bikes for Christmas:
Julia Finch, “Democratic by Design,”
The Guardian,
June 1, 2002.
134
IKEA soothes its few fitful critics by acknowledging flaws
: In 1994 a Swedish newspaper exposed Kamprad’s earlier ties to the neo-Nazi movement. Rather than deny it, Kamprad went on national television and tearfully repudiated his youthful indiscretion.
IKEA soothes its few fitful critics by acknowledging flaws
: In 1994 a Swedish newspaper exposed Kamprad’s earlier ties to the neo-Nazi movement. Rather than deny it, Kamprad went on national television and tearfully repudiated his youthful indiscretion.
134
Save the Children and UNICEF:
Olivier Bailly, Jean-Marc Caudron, and Denis Lambert, “The Secrets in IKEA’s Closet,”
CounterPunch,
December 29, 2006.
Save the Children and UNICEF:
Olivier Bailly, Jean-Marc Caudron, and Denis Lambert, “The Secrets in IKEA’s Closet,”
CounterPunch,
December 29, 2006.
135
1.1 million customers visit an IKEA store every single day:
Joanna Vallely, “IKEA: The Swedish Revolution in Your Home,”
Edinburgh Evening News
, April 16, 2008.
1.1 million customers visit an IKEA store every single day:
Joanna Vallely, “IKEA: The Swedish Revolution in Your Home,”
Edinburgh Evening News
, April 16, 2008.
135
IKEA verge on the hagiographic:
Among the more glaring examples is Bertil Torekull,
Leading by Design: The IKEA Story
(New York: HarperBusiness, 1998). Torekull, a retired business journalist, portrays Kamprad as equal parts Father Christmas and Bill Gates—a benevolent and generous business genius committed to fellowship, fair play, and family values. While the business arrangement between them is unspecified, Kamprad handpicked Torekull to write the book.
IKEA verge on the hagiographic:
Among the more glaring examples is Bertil Torekull,
Leading by Design: The IKEA Story
(New York: HarperBusiness, 1998). Torekull, a retired business journalist, portrays Kamprad as equal parts Father Christmas and Bill Gates—a benevolent and generous business genius committed to fellowship, fair play, and family values. While the business arrangement between them is unspecified, Kamprad handpicked Torekull to write the book.
135
“We sell a philosophy and a mission”:
Daniel Birnbaum, “IKEA at the End of Metaphysics,”
Frieze Magazine
, November 11, 1996.
“We sell a philosophy and a mission”:
Daniel Birnbaum, “IKEA at the End of Metaphysics,”
Frieze Magazine
, November 11, 1996.
136
$6 apiece on the Internet:
For example, see Green Earth Inc., which lists four banana leaves for $24 plus shipping at
http://www.greenhousebusiness.com/balefr.html
.
$6 apiece on the Internet:
For example, see Green Earth Inc., which lists four banana leaves for $24 plus shipping at
http://www.greenhousebusiness.com/balefr.html
.
136
in exchange for employing more Vietnamese
: “Mr Ingvar Kamprad from IKEA meets the Vietnamese Prime Minister,”
Embassy of Sweden News
, April 3, 2008.
in exchange for employing more Vietnamese
: “Mr Ingvar Kamprad from IKEA meets the Vietnamese Prime Minister,”
Embassy of Sweden News
, April 3, 2008.
137
illegally logged timber: “
Vietnam, Hub for Illegal Timber,” BBC News, March 19, 2008. The BBC reported on findings of two charitable organizations, U.K. based Environmental Investigation Agency (EIA) and Indonesia’s Telapak, that Vietnam was “exploiting the forests of neighbouring Laos to obtain valuable hardwoods for its outdoor furniture industry, which contravenes Laotian laws banning the export of logs and sawn timber.”
illegally logged timber: “
Vietnam, Hub for Illegal Timber,” BBC News, March 19, 2008. The BBC reported on findings of two charitable organizations, U.K. based Environmental Investigation Agency (EIA) and Indonesia’s Telapak, that Vietnam was “exploiting the forests of neighbouring Laos to obtain valuable hardwoods for its outdoor furniture industry, which contravenes Laotian laws banning the export of logs and sawn timber.”
137
six-day workweek:
Keith Bradsher, “As Labor Costs Soar in China, Manufacturers Turn to Vietnam,”
New York Times
, June 18, 2008.
six-day workweek:
Keith Bradsher, “As Labor Costs Soar in China, Manufacturers Turn to Vietnam,”
New York Times
, June 18, 2008.
137
“with advanced economies”:
Harold Meyerson, “Why Were We in Vietnam?,”
Washington Post
, July 9, 2008, A15.
“with advanced economies”:
Harold Meyerson, “Why Were We in Vietnam?,”
Washington Post
, July 9, 2008, A15.
137
Vietnam and other low-wage nations
: See Anna Eriksson and Margareta Przedpel ska, “The Impact of Swedish Investment and Trade in Labour Conditions in Vietnam,” a master’s thesis online at
www.ep.liu.se/exjobb/eki/2001.nek/018
.
Vietnam and other low-wage nations
: See Anna Eriksson and Margareta Przedpel ska, “The Impact of Swedish Investment and Trade in Labour Conditions in Vietnam,” a master’s thesis online at
www.ep.liu.se/exjobb/eki/2001.nek/018
.
138
seven times the area of a football field:
A football field is a bit less than 58,000 square feet in area.
seven times the area of a football field:
A football field is a bit less than 58,000 square feet in area.
138
500-kilometer radius
: Karin Lundstrom, “Will IKEA Make the Arctic Bloom?”
This Europe
, November 29, 2007; see
http://www.thiseurope.com/node/191
.
500-kilometer radius
: Karin Lundstrom, “Will IKEA Make the Arctic Bloom?”
This Europe
, November 29, 2007; see
http://www.thiseurope.com/node/191
.
138
charging extra for plastic bags:
Avis Thomas-Lester
,
“IKEA Puts a Price on Throw-away Plastic,”
Washington Post
, March 16, 2007, B01.
charging extra for plastic bags:
Avis Thomas-Lester
,
“IKEA Puts a Price on Throw-away Plastic,”
Washington Post
, March 16, 2007, B01.
139
“enforce a distinct process of adaptation”:
Joseph Schumpeter,
Business Cycles
(New York: McGraw-Hill, 1939), 101.
“enforce a distinct process of adaptation”:
Joseph Schumpeter,
Business Cycles
(New York: McGraw-Hill, 1939), 101.
140
“that could be moved around at will”:
Richard Sennett,
The Craftsman
(New Haven, Conn.: Yale University Press, 2008).
“that could be moved around at will”:
Richard Sennett,
The Craftsman
(New Haven, Conn.: Yale University Press, 2008).
143
consumer electronics shop members
: Carol Stocker, “The Fix Is in Decline,”
Boston Globe
, February 10, 2005, H1.
consumer electronics shop members
: Carol Stocker, “The Fix Is in Decline,”
Boston Globe
, February 10, 2005, H1.
143
young viewers were unlikely to encounter one:
The Fix-It Shop was converted to a Mail-It Shop with a fax machine and shipping service. Interestingly, the Fix-It Shop was revived without comment in August 14, 2006, in episode 4,109 of the series.
young viewers were unlikely to encounter one:
The Fix-It Shop was converted to a Mail-It Shop with a fax machine and shipping service. Interestingly, the Fix-It Shop was revived without comment in August 14, 2006, in episode 4,109 of the series.
143
“unintelligible to direct inspection”:
Matthew B. Crawford, “Shop Class as Soulcraft,”
The New Atlantis
, no. 13 (Summer 2006): 7-24. This is a stunning, well-thought-out essay on the place and purpose of craft. I spoke with Crawford at length on the issue of craftsmanship, and some of his thoughts are undoubtedly reflected in these pages.
“unintelligible to direct inspection”:
Matthew B. Crawford, “Shop Class as Soulcraft,”
The New Atlantis
, no. 13 (Summer 2006): 7-24. This is a stunning, well-thought-out essay on the place and purpose of craft. I spoke with Crawford at length on the issue of craftsmanship, and some of his thoughts are undoubtedly reflected in these pages.
144
“to meeting the housing need be accomplished”:
Richard U. Ratcliff, review of
American Housing, Problems and Prospects,
American Economic Review 34, no. 3 (September 1944): 635.
“to meeting the housing need be accomplished”:
Richard U. Ratcliff, review of
American Housing, Problems and Prospects,
American Economic Review 34, no. 3 (September 1944): 635.
144
“cannot be limited to the construction industry”:
Ibid.
“cannot be limited to the construction industry”:
Ibid.
144
“how many you can sell for how little”
: Eric Pace, “William J. Levitt, 86, Pioneer of Suburbs, Dies,”
New York Times
, January 29, 1994.
“how many you can sell for how little”
: Eric Pace, “William J. Levitt, 86, Pioneer of Suburbs, Dies,”
New York Times
, January 29, 1994.
144
Levitt and Sons at the age of twenty-two:
Both William and Alfred Levitt attended New York University, but neither graduated.
Levitt and Sons at the age of twenty-two:
Both William and Alfred Levitt attended New York University, but neither graduated.
144
“he didn’t know what a two-by-four was”:
“Up from the Potato Fields,”
Time
magazine, July 3, 1950.
“he didn’t know what a two-by-four was”:
“Up from the Potato Fields,”
Time
magazine, July 3, 1950.
145
thought they had any chance of finding one:
Randall Bennett Woods,
Quest for Identity: America Since 1945
(New York: Cambridge University Press, 2005), 10.
thought they had any chance of finding one:
Randall Bennett Woods,
Quest for Identity: America Since 1945
(New York: Cambridge University Press, 2005), 10.
145
“but it is not good enough for us”:
Geoffrey Mohan, “Levittown at Fifty,” accessed August 8, 2008, at
http://www.newsday.com/community/guide/lihistory
.
“but it is not good enough for us”:
Geoffrey Mohan, “Levittown at Fifty,” accessed August 8, 2008, at
http://www.newsday.com/community/guide/lihistory
.
145
finish four to five homes a year: Levittown, NY—A Brief Survey. Levittown History Collection,
appended September 1, 1987.
finish four to five homes a year: Levittown, NY—A Brief Survey. Levittown History Collection,
appended September 1, 1987.
146
“the masses are asses”:
“Up from the Potato Fields.”
“the masses are asses”:
“Up from the Potato Fields.”
146
“discarded fashions and attitudes”:
Christopher Lasch,
The Culture of Narcissism,
24.
“discarded fashions and attitudes”:
Christopher Lasch,
The Culture of Narcissism,
24.
146
immersed in the “cult of the new”:
See, for example, M. Keith Booker,
The Post Utopian Imagination
(Westport, Conn.: Greenwood Publishing Group, 2002), 21.
CHAPTER SEVEN : DISCOUNTING AND ITS DISCONTENTSimmersed in the “cult of the new”:
See, for example, M. Keith Booker,
The Post Utopian Imagination
(Westport, Conn.: Greenwood Publishing Group, 2002), 21.
150
were forced to quit their jobs:
Clifford Krauss, “Rural U.S. Takes Worst Hit as Gas Tops $4 Average,”
New York Times
, June 9, 2008.
were forced to quit their jobs:
Clifford Krauss, “Rural U.S. Takes Worst Hit as Gas Tops $4 Average,”
New York Times
, June 9, 2008.
151
“or $2,329 per household”:
Jason Furman, “Wal-Mart: A Progressive Story,” November 28, 2005, online at
http://www.americanprogress.org/kf/walmart__progressive.pdf
.
“or $2,329 per household”:
Jason Furman, “Wal-Mart: A Progressive Story,” November 28, 2005, online at
http://www.americanprogress.org/kf/walmart__progressive.pdf
.
151
study of the impact of Wal-Mart on food prices:
Jerry Hausman and Ephrain Leibtag, “Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Wal-Mart Effect,” M.I.T. and Economic Research Service, USDA, revised draft, 2005. Find online at
http://www.businessweek.com/pdfs/2005/jerry__hausman.pdf
.
study of the impact of Wal-Mart on food prices:
Jerry Hausman and Ephrain Leibtag, “Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Wal-Mart Effect,” M.I.T. and Economic Research Service, USDA, revised draft, 2005. Find online at
http://www.businessweek.com/pdfs/2005/jerry__hausman.pdf
.
152
the demand tends to go down:
William G. Farang and Karl W. Einolf,
Management Economics: An Accelerated Approach,
M.E. Sharpe, 2006, 122.
the demand tends to go down:
William G. Farang and Karl W. Einolf,
Management Economics: An Accelerated Approach,
M.E. Sharpe, 2006, 122.
152
the country’s leading “Wal-Martologist”:
Justin Wolfers, “Are Wal-Mart’s Products Normal?” writing in the
New York Times
-sponsored blog “Freakonomics,” May 29, 2008. Wolfers is an associate professor of business and public policy at the Wharton School at the University of Pennsylvania.
the country’s leading “Wal-Martologist”:
Justin Wolfers, “Are Wal-Mart’s Products Normal?” writing in the
New York Times
-sponsored blog “Freakonomics,” May 29, 2008. Wolfers is an associate professor of business and public policy at the Wharton School at the University of Pennsylvania.
152
was either weak or nonexistent:
Emek Basker, “Selling a Cheaper Mouse-trap: Wal-Mart’s Effect on Retail Prices,”
Journal of Urban Economics
58 (2005): 203-29.
was either weak or nonexistent:
Emek Basker, “Selling a Cheaper Mouse-trap: Wal-Mart’s Effect on Retail Prices,”
Journal of Urban Economics
58 (2005): 203-29.
153
carrying a savings of no more than 2 cents:
See, for example, Fred Crawford and Ryan Matthews,
The Myth of Excellence: Why Great Companies Never Try to Be the Best at Everything
(New York: Crown, 2001), 48-49.
carrying a savings of no more than 2 cents:
See, for example, Fred Crawford and Ryan Matthews,
The Myth of Excellence: Why Great Companies Never Try to Be the Best at Everything
(New York: Crown, 2001), 48-49.
153
that everything in the store is cheap:
A study conducted by Zenith Management Consulting between July 2003 and January 2005 concluded that “only
15% to 20% of the items Wal-Mart sells are actually priced lower than competing retailers. 80% to 85% of the items Wal-Mart sells are more expensive than other retailers.
”
that everything in the store is cheap:
A study conducted by Zenith Management Consulting between July 2003 and January 2005 concluded that “only
15% to 20% of the items Wal-Mart sells are actually priced lower than competing retailers. 80% to 85% of the items Wal-Mart sells are more expensive than other retailers.
”
154
some of which was organic in name only:
Mark Alan Kastel, “Wal-Mart: The Nation’s Largest Grocer Rolls-out Organic Products—Market Expansion or Market Delusion?”
Cornucopia Institute
, September 27, 2006, available online at
http://www.cornucopia.org/WalMart/WalMart__White__Paper.pdf
.
some of which was organic in name only:
Mark Alan Kastel, “Wal-Mart: The Nation’s Largest Grocer Rolls-out Organic Products—Market Expansion or Market Delusion?”
Cornucopia Institute
, September 27, 2006, available online at
http://www.cornucopia.org/WalMart/WalMart__White__Paper.pdf
.
154
“more competitive retail environment”:
Gene Koretz, “Wal-Mart vs. Inflation,”
BusinessWeek
, May 13, 2002.
“more competitive retail environment”:
Gene Koretz, “Wal-Mart vs. Inflation,”
BusinessWeek
, May 13, 2002.
154
China, and elsewhere around the globe:
See, for example, Keith Bradsher, “High Rice Cost Creating Fears of Asia Unrest,”
New York Times,
March 29, 2008; and Robin McKie and Heather Stewart, “Hunger. Strikes. Riots. The Food Crises Bites,”
The Observer,
April 13, 2008.
China, and elsewhere around the globe:
See, for example, Keith Bradsher, “High Rice Cost Creating Fears of Asia Unrest,”
New York Times,
March 29, 2008; and Robin McKie and Heather Stewart, “Hunger. Strikes. Riots. The Food Crises Bites,”
The Observer,
April 13, 2008.
154
are all too familiar with its dangers:
See, for example, Brad Delong, “America’s Only Peacetime Inflation: The 1970s,” National Bureau of Economic Research Working Paper No. H0084, May 1996. Available online at
http://papers.ssrn.com/sol3/papers.cfm?abstract__id=225048
.
are all too familiar with its dangers:
See, for example, Brad Delong, “America’s Only Peacetime Inflation: The 1970s,” National Bureau of Economic Research Working Paper No. H0084, May 1996. Available online at
http://papers.ssrn.com/sol3/papers.cfm?abstract__id=225048
.
154
“perseverance devoted to few other tasks”:
James K. Galbraith,
Balancing Acts: Technology, Finance, and the American Future
(New York: Basic Books, 1989), 83.
“perseverance devoted to few other tasks”:
James K. Galbraith,
Balancing Acts: Technology, Finance, and the American Future
(New York: Basic Books, 1989), 83.
155
most workers to demand an increase in wages and benefits:
Louis Uchitelle,
The Disposable American: Layoffs and Their Consequences
(New York: Knopf, 2006), 125.
most workers to demand an increase in wages and benefits:
Louis Uchitelle,
The Disposable American: Layoffs and Their Consequences
(New York: Knopf, 2006), 125.
155
“different baskets of goods”:
Christian Broda, “China and Wal-Mart: The True Champions of Equality,” online at the Financial Express,
http://www.thefinancialexpress-bd.info/print__view.php?news__id=36662
, from a report he coauthored with fellow University of Chicago economist John Romalis: “Inequality and Prices: Does China Benefit the Poor in America?” March 2008.
“different baskets of goods”:
Christian Broda, “China and Wal-Mart: The True Champions of Equality,” online at the Financial Express,
http://www.thefinancialexpress-bd.info/print__view.php?news__id=36662
, from a report he coauthored with fellow University of Chicago economist John Romalis: “Inequality and Prices: Does China Benefit the Poor in America?” March 2008.
155
“close to a record low”:
Ibid.
“close to a record low”:
Ibid.
157
in almost anyone’s book:
Reed Abelson and Milt Freudenheim, “Even the Insured Feel the Strain of Health Care Costs,”
New York Times
, May 4, 2008.
in almost anyone’s book:
Reed Abelson and Milt Freudenheim, “Even the Insured Feel the Strain of Health Care Costs,”
New York Times
, May 4, 2008.
157
18 percent less on food:
In 1947, economist Jesse J. Friedman put today’s food costs into even starker perspective, writing: “As every housewife knows, the most important single item in the family budget is food. In the Labor Department’s cost of living index, food carries a weight of more than 40 per cent of the total for moderate income families.” See Jesse J. Friedman, “That Key Man, the Consumer,”
New York Times
Magazine, March 16, 1947.
18 percent less on food:
In 1947, economist Jesse J. Friedman put today’s food costs into even starker perspective, writing: “As every housewife knows, the most important single item in the family budget is food. In the Labor Department’s cost of living index, food carries a weight of more than 40 per cent of the total for moderate income families.” See Jesse J. Friedman, “That Key Man, the Consumer,”
New York Times
Magazine, March 16, 1947.
157
incurring record levels of credit card debt:
Elizabeth Warren, “The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net,” invited lecture in the Jefferson Memorial Lecture Series, University of California at Berkeley, March 8, 2007. This lecture is available for view at YouTube at
http://www.YouTube.com/watch?v=akVL7QY0S8A
.
incurring record levels of credit card debt:
Elizabeth Warren, “The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net,” invited lecture in the Jefferson Memorial Lecture Series, University of California at Berkeley, March 8, 2007. This lecture is available for view at YouTube at
http://www.YouTube.com/watch?v=akVL7QY0S8A
.
158
$12 million loss in 2007:
Jim Geraghty, “Hillary vs. Circuit City: An Exercise in Empty Populist Tub-thumping,”
National Review online
, April 18, 2007,
http://hillaryspot.nationalreview.com/post/?q=M2YzMzg
4
MjMxYzM
3
ZTZhOWJlMTA 4YThhN2Q1NjZlMGY=.
$12 million loss in 2007:
Jim Geraghty, “Hillary vs. Circuit City: An Exercise in Empty Populist Tub-thumping,”
National Review online
, April 18, 2007,
http://hillaryspot.nationalreview.com/post/?q=M2YzMzg
4
MjMxYzM
3
ZTZhOWJlMTA 4YThhN2Q1NjZlMGY=.
158
regardless of seniority:
Ylan Q. Mui, “Circuit City Cuts 3,400 ‘Overpaid’ Workers,”
The Washington Post,
March 29, 2007, D01.
regardless of seniority:
Ylan Q. Mui, “Circuit City Cuts 3,400 ‘Overpaid’ Workers,”
The Washington Post,
March 29, 2007, D01.
158
or had their commissions cut
: Robert Spector,
Category Killers: The Retail Revolution and Its Impast on Consumer Culture
(Cambridge, Mass.: Harvard Business School Press, 2005), 67.
or had their commissions cut
: Robert Spector,
Category Killers: The Retail Revolution and Its Impast on Consumer Culture
(Cambridge, Mass.: Harvard Business School Press, 2005), 67.
159
8.1 percent growth in transportation costs:
U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index, May 2008; available online at:
http://www.bls.gov/CPI
.
8.1 percent growth in transportation costs:
U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index, May 2008; available online at:
http://www.bls.gov/CPI
.
159
becoming dangerously obese
: Adam Drewnowski and S.E. Specter, “Poverty and Obesity: The Role of Energy Density and Energy Costs,”
American Journal of Clinical Nutrition
, 79, no. 1 (January 2004): 6-16.
becoming dangerously obese
: Adam Drewnowski and S.E. Specter, “Poverty and Obesity: The Role of Energy Density and Energy Costs,”
American Journal of Clinical Nutrition
, 79, no. 1 (January 2004): 6-16.
159
by eating out less:
The National Restaurant Association estimates that the typical U.S. adult averaged 5.8 “restaurant occasions”
per week
in 2007. This figure includes homemakers and people who work at home.
by eating out less:
The National Restaurant Association estimates that the typical U.S. adult averaged 5.8 “restaurant occasions”
per week
in 2007. This figure includes homemakers and people who work at home.
159
for most of us is substantial:
The Environmental Protection Agency reports that about 25 percent of food in America goes to waste (see
http://www.epa.gov/epaoswer/non-hw/reduce/wastenot.htm
). But others, such as journalist Jonathon Bloom who is writing a book on food waste, put the figure even higher, at 40 percent. Check out Bloom’s excellent blog:
http://wastedfood.com
.
for most of us is substantial:
The Environmental Protection Agency reports that about 25 percent of food in America goes to waste (see
http://www.epa.gov/epaoswer/non-hw/reduce/wastenot.htm
). But others, such as journalist Jonathon Bloom who is writing a book on food waste, put the figure even higher, at 40 percent. Check out Bloom’s excellent blog:
http://wastedfood.com
.
160
raised the minimum wage to $7.25 over two years:
U.S. Department of Labor, Employment and Standards Administration, Wage and Hour Division, online at
http://www.dol.gov/esa/whd/flsa
.
raised the minimum wage to $7.25 over two years:
U.S. Department of Labor, Employment and Standards Administration, Wage and Hour Division, online at
http://www.dol.gov/esa/whd/flsa
.
160
minimum wage of 1960
: Adam Cohen, “After 75 Years, the Working Poor Still Struggle for a Fair Wage,”
New York Times
, June 17, 2008.
minimum wage of 1960
: Adam Cohen, “After 75 Years, the Working Poor Still Struggle for a Fair Wage,”
New York Times
, June 17, 2008.
160
and crushing homelessness:
David Levinson,
The Encyclopedia of Homelessness
(Thousand Oaks, Calif.: Sage Publications, 2004), 83.
and crushing homelessness:
David Levinson,
The Encyclopedia of Homelessness
(Thousand Oaks, Calif.: Sage Publications, 2004), 83.
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