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An American at the Bazaar

August 10, 2012

I’ve been noticing that we in America seem to display a general confusion when it comes to two very fundamental economic concepts: price and value.

The average American seems to orient his purchase decisions around price. Moreover, his concerns about price seem to occur in the here and now–price is a short-term expenditure, not something he can average across the life of a product. He will buy shoes at Payless, a $3 T-shirt at Wal-Mart, and while he may doubt the quality of these products, he can’t help but entertain the vague delight that he is getting a good deal. Being raised in this “price mindset” teaches us that the measure of a good can be transcribed into a dollar price, and that the lower that price is, the better.

Another way of orienting ourselves in the world of consumption is to be concerned about value. Value doesn’t confuse price with utility. Value is difficult, because it requires relatively high-order cognition: it requires us to be in touch with our personal preferences and idiosyncrasies, and requires us to assess what a good means to us beyond what price (and advertising) would have us believe. In short, the “value mindset” requires us to dust off our free will and jog it around the block a few times. Value is a holistic, and also highly subjective measure. It will vary across individuals and cultures. In many ways, it defies–or at least complicates–the idea of a “rational actor”. And yet it is a real and valid process of assessment, and is common around the world. It may include considerations like:

  • time saving
  • durability
  • sustainability
  • beauty
  • pure Epicurean enjoyment
  • etc…

So we have price, and we have value. And in our culture, we have a lot of resources and socialization that have taught us to assess the one, but not the other. Want painful proof of this? Just take any American to a market bazaar, and watch him try to haggle. It’s a pitiful sight. His price/value confusion makes him at times insulting, at times delightfully easy to scam–and nearly always out of place in a bazaar.

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