Frugal People Will Suffer Least

I recently finished reading Thomas Friedman’s Hot, Flat, and Crowded: Why We Need a Green Revolution and How It Can Empower America. It’s a very good book if you’re interested in the environment, but it’s also a good read if you ever wonder what a “green economy” might look like. He covers a lot of ground, but the part that struck me the most was his argument that in the future we (as in everyone, not just Americans) will have to pay the true cost of the goods we consume instead of the artificially low prices we’ve become accustomed to. And that means that life will get a lot more expensive.

We’ve become accustomed to buying cheap goods that d

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13 Responses to Frugal People Will Suffer Least

  1. Merch says:

    Wow. I don’t know where to begin. The price you pay for a DVD or any other item includes the raw materials, the processing of the raw materials into the finished good, fuel and transportation costs, taxes, management, labor, and the case of some companies health care and retirement. If the items are produced in the US, it included the cost of proper disposal of waste.

    The reason things are so cheap is technology that is used to produce the item and economies of scale. To produce 1 DVD is extremely expensive but to produce millions is a lot cheaper.

    You do mention the end life of products and I will agree that companies do not look at the end life and recycle of there products. However, there are companies that do this exclusively. They take items directly from consumers and recycle them for a profit.

    If DVDs went to $100 a piece, it would be temporary. A replacement product would be introduced that would bring the price of movie down to an acceptable level. To assume that all the prices of goods would skyrocket is naive.

  2. eden says:

    “If the items are produced in the US, it included the cost of proper disposal of waste.”

    No, it absolutely does not. The CONSUMER has to pay for someone to take away their trash, and then that trash is either sent to the dump (not sustainable) or to 3rd world countries where the poor sift through the garbage while getting poisoned by the heavy metals.

    “includes the raw materials”
    No it does not. Many countries subsidize raw material extraction (including the US) by leasing government land at extremely low prices ($1 / acre for 100 years), or in many developing countries by taking the land of the poor or minorities.

    Throughout the entire article the author was not arguing that the costs of resources are not reflected in the price of items – but that the TRUE cost of resources are not reflected.

    “A replacement product would be introduced”
    In this scenario (if resource costs were true costs) everything physical would cost more. Your replacement product would be a solely electronic movie file.

  3. Traciatim says:

    Merch, while your first point is true it does have limits. The ‘True Cost’ can be masked greatly. Take the same DVD example:

    1) Complete manufacture in USA. The cost to drill the petroleum to make the plastic casing and the cost to get the metals will be higher as employment, environmental, and transport costs will be higher due to the wages in the USA and regulations. The equipment to make the DVDs and people who run it will cost more, and the disposal fee will have to be paid up front. True cost, about 5 bucks per DVD.

    2) Go somewhere with little to know environmental regulation to get your materials, press your DVD’s using unregulated industry that tosses their garbage in the drinking water of the next town . . . True cost, still 5 bucks, actual cost to company, a dollar, subsidized cost due to lack of caring for consequences of actions . . . 4 bucks per DVD.

    The company can price the DVD cheaper than the original example, and all the peopel will flock to Walmart to get it on sale because it’s been ‘rolled back’. That’s what is being described when ‘true cost’ is mentioned. Sure it’s cheaper to make and sell, but who had to sacrifice to make up the difference in cost?

  4. Mike says:

    I guess it depends on your definition of “true”.

    The real cost is absolutely less than what you pay, otherwise it would not be profitable for a company, corporate or individual to produce and sell the product. The problem is that “green” economies are artificial at best, and an outright scam at worst – think cap & trade. People will not (and should not) pay extra for such artificial concepts as carbon footprints. Let the free market decide what is fair.

  5. Like those above, I disagree with much of the content here. Yet I was drawn to the post because I agree that, whatever happens in the economy, frugal people will suffer least.

  6. TheFrugalCynic says:

    In this economy the frugal people won’t suffer the least, they’ll just be the last to capitulate.

  7. ThiNg says:

    Post #1 was on the money with “economies of scale”. If you have to make one car on your own, the cost is huge, but in mass production the cost becomes less.

    All of the examples in your article (cars, washing machines, etc.) became cheaper once the hit the mainstream market.

    My first 17″ LCD monitor was $1500, my new 24″ was less than $500. Items which are not mass produced are still expensive (you should see how much the hand made watch my father-in-law got me cost!). That doesn’t mean the real cost for all watches should thousands of dollars.

    There is a major logic ‘jump’ in your article. It’s difficult to take that same leap when I read it.

  8. audrey says:

    use, reuse, lend, borrow etc. I for one do NOT buy cd’s dvd’s etc. I use Netflix to watch movies, I download music from the internet etc. I do admit that I am one of those people that uses an iPod to workout and I am dependent on it. Cut me some slack I’ve been working out for 30 years, it doesn’t get easier! Consider me one of the frugal ones though people have been making fun of my efforts to conserve and recycle for years. At least I’m having the last laugh.

  9. Cindy M says:

    I agree with much of what you say and appreciate the article, Jennifer. But go, Audrey. They make fun of me also (I don’t even own a car anymore), but I could care less what anybody says, and it’s great to have that attitude. Who BUYS frickin DVD’s? Good movies are free on the net, check it out. Or new TVs? Please. Sorry all, guess I better find another forum, maybe the dumpster divers? (No, I would probably not eat dumpster food but yeah, have found some great things that way and it’s fun). Anyway, when it comes to any kind of entertainment, I actively search out freebies or that which are nearly so. How much time do I actually have for entertainment, anyway?

  10. Jen says:

    Andrew Bacevich on a past Bill Moyers show on PBS, speaks to this issue. One of the things that keeps the costs cheap is our military around the world. He is from the military, and knows about what which he speaks, so check him out, listen to his interview.
    China is a communist country, and can pay their people what they choose to, as little as they want to.

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  13. Lisa says:

    Hi! This article has a lot of truth to it. My family farmed for several generations & if people had to pay the true cost of food, most would starve. The government uses price supports & artificial price control on everything in USA. We,ve been living in a fairy tale for years and it’s about to end. The farmer receives the same price or in some instances less than 1950′s prices for crops. For instance in the 1970′s tomatoes sold for $5 for 10 pound basket wholesale, still thesame now. Most farm families work two jobs just to keep the farm & not able to do it even then.

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