Free Cheap by Ellen Ruppel Shell Page B

Mansfield. “The discount store’s growth is not so much due to its prices,” speculated an industrial designer of the time, “as to its fireworks.” There was a grain of truth to this, but only a grain. Pyrotechnics might draw customers initially, but the low prices kept them coming.
    The impact of the low-price juggernaut in the post-Sputnik era is difficult to overstate. Discounters shuffled the American demographic, abetting the further decline of already troubled city centers by luring still more customers to the suburbs and beyond. Department stores had for some time felt the pinch of urban flight, but many could at least rely on their suburban branches to sputter some revenue back into their city locations. Typically, these suburban stores were expensively constructed and carried merchandise priced at least as high as downtown stores. Discounters undercut prices at both the urban and suburban locations, and choked off the money flow. And discounters were promiscuous, carrying anything that could be bought cheap and sold in large lots. Increasingly these things were made outside the country’s borders.
    Discounters leaped at every opportunity to buy from foreign suppliers, particularly in Asia. In 1965 the United States ran its first postwar trade deficit with Japan. The deficit was small, only $334 million, and largely traceable to the importation of cheap goods, primarily low-quality steel targeted at the bottom tier of the American steel market. The remaining imports were also on the low end of the quality spectrum: transistor radios, portable black-and-white televisions, fabrics, toys, clothing, and glass products—things that customers might trip over in those flea market collections at Shoppers World in Des Moines. While some domestic producers complained of unfair competition, there was no overriding concern that these imports posed a real and sustained threat to American business interests or job security. Rather, these flimsy, cheap imports were considered a validation of the widely held view that Japan was far behind the United States in manufacturing sophistication and business savvy. Labor unions were surprisingly sanguine. Confident of the superiority of American products, United Steelworkers Union president David McDonald actually approved of the importation of steel from Japan. Years earlier he had testified before Congress, saying, “If I had the slightest feeling that increased trade, particularly imports, would be injurious to the American working man, I wouldn’t be supporting a policy of trade liberalization.” McDonald could not imagine that Japanese imports might pose a threat to his constituency.
    But even a tinny-sounding radio is a radio, after all, and American teenagers were happy to put up with static for the opportunity to enjoy the Beatles in private rather than huddle with their parents around a bulky American-made vacuum tube set. Gradually, America grew accustomed to the compromises embedded in low price and showed a growing willingness to trade cost for quality. This trend toward “value” (often a thinly disguised euphemism for cheap) gave discounters of the 1960s a substantial edge over traditional stores, where product quality and service were integral to the business model. And it gave low-wage manufacturers a huge edge over high-wage manufacturers unprepared to compete on price. But this was not—as it is often portrayed—a sudden titanic clash of first- and third-world manufacturers, with workers getting crushed in between. American corporations were by then deeply invested abroad and had factories scattered throughout the developing world and Europe. The line between American-made and other goods was already smudged. Essentially, many American firms were already multinational, and so-called Buy American appeals, some bordering on the jingoistic, were more often than not an attempt to blur this inescapable reality. Speaking at a meeting of the AFL-CIO in 1961, United