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Sure, It's Cheaper. But Why?

By Ezra Klein
Wednesday, August 19, 2009

"Ask yourself why a processed food is discounted at any given time," says Ellen Ruppel Shell, author of the new book "Cheap: The High Cost of Discount Culture." "It's not seasonal." The answer, I guess, is that the producer is trying to gin up demand. Or that the parent company got a gush of commodity subsidies. Or that someone built a machine that can press twice as many Wheat Thins in an hour.

But Shell's point is well taken: Prices at the grocery jag and wiggle like a Hill intern trying to negotiate 18th Street after a long night. And consumers don't generally know why. No one hands out a pamphlet explaining that lobster prices have fallen as low as $2 a pound because, on the one hand, Maine has done such a superlative job managing its lobster fishery that the catch is triple what it was 20 years ago, and on the other, lobster is one of the signal purchases that people cut back on during a recession, as it's considered the culinary equivalent of a gem-encrusted scepter. All we know is that lobster is cheap right now.

Affordable lobster turns out to be a happy -- and delicious -- story. But in her book, Shell tackles the tale of cheap shrimp, which turns out to be a bit more troublesome. "Many of us can still remember [shrimp] as a delicacy," writes Shell, "served in a martini glass with a side of cocktail sauce or folded tenderly into cream sauces." That's how I remember shrimp, at least. Growing up, it was my favorite food. But it was a rare treat. One Thanksgiving, my family splurged and went to the buffet at the local Hilton. They had an unlimited platter of cocktail shrimp. I'd never seen such a thing before. My plate looked like a revenge fantasy against crustaceans. My older brother, sensing that abundance had led me to temporarily lose my mind, bet me that I wouldn't finish the food. He lost.

Now shrimp are commonplace. Red Lobster offers up an "endless shrimp parade" for $15.99. Between 1980 and 2005, consumption of shrimp tripled as prices halved. The supply of shrimp transformed totally, as did the price. In her book, Shell tracks the forces behind the change. Some of them are predictable: Shrimp stopped being caught and started being farmed. The trade moved out of America and into Thailand. The little critters are covered in antibiotics, pesticides and disinfectants. Increased demand induced outside investment. Technological advances made shrimp production more efficient. The result: While a traditional shrimp pond yielded 450 pounds of shrimp per acre, the industrialized shrimp farms produce 89,000 pounds per acre.

Some of the changes, however, are less predictable. The companies rely on dirt-cheap migrant labor (this is migrant labor, remember, because the Thai labor market is too pricey), and the documented abuses range from child labor to worker torture to rape. The mangrove forests that used to protect the coastline and sustain the ecosystems have been cleared out (a 2002 study estimate that 65,000 hectares had been lost to shrimp farming), and their absence contributed significantly to the death toll from 2004's brutal tsunami. The surrounding waters are thick with chemicals and waste and salt.

"Shrimp today are not like shrimp of the past," says Shell. The transformation of the production process has created a materially different product, albeit one still called "shrimp." The taste is different, the nutrition is different, the accompanying chemicals are different, the impact on the environment is different, the economies it supports are different, the waters it lived in are different, the food it consumed is different.

Shell argues that it is a conceptual mistake to understand an item that has gone through such massive price and production changes as "an exact analogue" to its costlier predecessor. "It's not a good chair," she says, "it's a good cheap chair. It's not a good shrimp, it's a good cheap shrimp." Anyone who has eaten a fresh summer tomato and a supermarket's winter imitation will know what Shell means.

None of this is to say that lower prices are always bad, or higher prices always good. It's not even to say that affordable shrimp are bad. And the lobster example is a nice illustration of low prices resulting from enlightened fishery management and the simple dictates of consumer demand. It is just to say that price changes, particularly radical ones, have a story, and generally one worth thinking about and inquiring after. Sometimes, as in the lobster example, it's a story we want to be part of. But sometimes it isn't. And there's nothing on the price tag to tell us which is which.

Ezra Klein can be reached at kleine@washpost.com or through his blog at http://www.washingtonpost.com/ezraklein.

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