The Price of Everything: Finding Method in the Madness of What Things Cost
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"Porter's work out to ring up the audience for Steven Levitt's Freakonomics."
Many of the prices we pay seem to make little sense. We shell out $2.29 for coffee at Starbucks when a nearly identical brew can be had at the corner deli for less than a dollar. We may be less willing to give blood for $25 than to donate it for free. And we pay someone to cart away trash that would be a valuable commodity in poorer parts of the world.
The Price of Everything starts with a simple premise: there is a price behind each choice, whether we're deciding to have a baby, drive a car, or buy a book. We often fail to appreciate just how critical prices are as motivating forces. But their power becomes clear when distorted prices steer our decisions the wrong way. Eduardo Porter uncovers the true story behind the prices we pay and reveals what those prices are actually telling us.
them. Others employ different tactics. Kodak’s ESP printers are about 30 percent more expensive than similar models, but the ink cartridges cost as little as ten dollars and print about three hundred pages. Regardless of the mix of tactics, the overall price of printing should fall as printer makers vie to win market share. CONSIDER WHAT HAPPENS when there is little or no competition in a market. Steve Blank, a former Silicon Valley entrepreneur who teaches a customer development class at
economist Jacob Mincer found that women were making the decision on whether to work based on their own wages, rather than those of their husbands. Work even transformed women’s bodies. Men tend to like women with big hips and breasts for reproductive reasons. Female hourglass shapes are associated with the onset of fertility—girls have similar shapes to boys, but begin accumulating fat around breasts and bottoms at puberty, when their estrogen levels rise. But these aren’t the only determinants
of great social experimentation. Hundreds were founded around all sorts of ideas, from the beliefs of the French utopian socialist Charles Fourier and the Scottish Robert Owen, father of the cooperative movement, to anarchist groups and dozens of religious sects. Very few survived more than a couple dozen years, driven asunder by the difficulty of ensuring cooperation and avoiding disputes over the allocation of resources, rights, and responsibilities. What is notable is that religious communes
the prevailing concern about the state of the earth and dared the Stanford ecologist Paul R. Ehrlich, a noted prophet of doom, to a bet. Ehrlich had built his reputation dusting off Malthus’s expectation of impending environmental collapse. “In the 1970s the world will undergo famines—hundreds of millions of people are going to starve to death,” he wrote in The Population Bomb in 1968. In The End of Affluence, published in 1974, he forecast “a genuine age of scarcity” by 1985. Simon would have
around to get the best possible price for their plasma TV are doing us all a favor. They get a better machine, have more money left over to buy other things, and improve the odds of success of the company that makes good products for less, boosting the economy’s efficiency. Successful technology companies that profit from the work of highly qualified workers will offer higher wages—a higher price—to attract better-qualified applicants. Workers will keep raising their qualifications as long as the