The Six Minute Book Summary of Lauren Weber?s In Cheap We Trust: The Story of a Misunderstood American Virtue
Executive Summary
Lauren Weber bases the book, In Cheap We Trust, on a concept that she knows well from her own childhood experiences. Her father was a frugal man and though she considered him cheap at the time, she would later pick up some of the same, or similar, habits that she didn't understand as a child. Weber traces the word cheap back to its origins and shows us how it was turned into a term of derision. Through stories of frugality and consumer spending in the past and relation of frugality to the world we live in now, Weber takes us on a journey of thrift.
Though we often hear the phrase, "a return to thrift," our past is not a solid history of devoted cheapskates as we may assume. History is instead a cycle of spending and saving. The earliest settlers may have been frugal, but this was more of a necessity than a choice. From the earliest years to the present, Americans found a way to be thrifty when the times demanded it, but were quick to jump back into spending when the opportunity arose.
Through the last few decades, our spending has grown more than ever before. Our savings have dropped and our debts have multiplied. We are consumption hogs in comparison to other countries with seemingly no plan to change our ways. We spend more and save less, even as the debt of our country grows to unimaginable amounts. We consume and waste, knowing that our waste is doing nothing to help our environment.
While most of our citizens are freely spending, there are those who decide to rebel against the majority and to be sensible with their money. There are a variety of different types of frugality. There are those who simply try not to waste. There are some who refuse to buy new goods (other than food or medicine). There are even those who "dumpster-dive" for food rather than pay high prices while good food is going to waste in our country every day.
The psychological drive behind this thrift is an amazing story in itself. Some research studies have proven that people feel anxiety, and even a slight amount of pain, when required to spend money. That, along with guilt and fear, aid in stopping a portion of the population from caving in to the pressures of society to consume.
There are many things that we can easily do to help save our environment, better our economy, and secure our own financial futures. Some of the simplest methods could help us stop the historical cycle of spending and keep our country and our citizens on track for saving and an altogether better future.
The Ten Things Managers Need to Know fromIn Cheap We Trust
1. The word "cheap" has evolved from originally meaning tradesman, to becoming a term of derision.
2. Women had an early role as the "budgeters" for the family. They had to learn how to reuse and not be wasteful.
3. There are many stereotypes, generalizing certain cultures as cheap. These stereotypes are often untrue.
4. War has throughout history, been a big driver for the back and forth cycle of thrift and spending.
5. A large percentage of people are unprepared for emergency or retirement in terms of savings. Many people don't save at all.
6. By being frugal, we can also help our environment.
7. Fresh food is thrown out every day, and salvaged by groups of people who want to be more frugal.
8. According to research, thoughts of purchasing items can cause anxiety and even pain for some people. Frugality is also driven by guilt and fear.
9. It is possible to break the cycle of spending and saving. The spreading of knowledge about how consumption effects our environment may be what it takes to finally break the cycle.
10. There are many little things we can do to be more frugal and save more. By doing so, we help our environment, we can help our country, and we can secure our own financial futures.
Full Summary of In Cheap We Trust
Cheap Thrills
In this chapter, Lauren Weber introduces us to the topic of thrift by telling stories about her father's thrifty ways throughout her childhood. He saved money by turning off lights, hand washing dishes, reusing tea bags, and even by attempting to monitor toilet paper usage. He did all of this to save, yet still indulged in expenses such as gas for long drives and expensive college tuition for his children. Weber also tells us that though she resented these things as a child, she now sees this quality in herself as well.
Weber tells us about the origins of the word cheap. "It derives from the Latin word caupo, or tradesman; evolved into the noun ceap (a trade) in Old English; and came to be used in Middle English mostly in the phrase "good chepe," meaning "good bargain" or "good price." The opposite phrase was not "bad chepe" but "dear chepe," which referred to high prices. By the sixteenth century, cheap was employed, without judgment, as a synonym for "inexpensive."" (p. 3) She then goes on to discuss how the word was later transformed into a derisive term.
Weber also speaks of the idea of a "return to thrift." (p. 7) She discusses the idea that thrift was not a virtue, abandoned over time by a lazy population, but more a necessity for the time. Americans were quick to give up their thrifty ways when the opportunities for them to spend started being more prevalent.
The Crowd Approved the Doctrine, and Immediately Practiced the Contrary
In this chapter, Weber discusses the history of thrift with the Puritans and the Quakers. The Puritans believed that indulging in worldly possessions interfered with their worship of God. Laws were put into place to restrict the purchase of vanity items. The Quakers also believed that they were supposed to live a simple life. Almanacs became popular as guides to thrift. One of the most popular was Poor Richard's Almanack, written by Benjamin Franklin. But as through the rest of history, this time in the past was filled with a back and forth sort of thrift. As money and opportunities increased, so did spending.
A Nation of Savers
In this chapter, Weber discusses the beginning of savings banks. These banks were created as a means for the poorer population to learn to save, rather than waste their money. One of the people who took advantage of savings banks is Hetty Green. She started depositing her money at a young age and grew up to be the world's greatest miser, according the Guinness Book of Records. She is the model of frugality. Though she had saved a fortune, she lived like a pauper.
Weber also discusses the effect of the end of the Civil War. This was a time when money was accumulated as wealth by many. The wealthy spent their money on parties and luxuries as they never had before. But this new spending wouldn't last forever. Once again, thrift became a way of life for many. Even school children started depositing their money through a special educational savings program.
What Use Can a Woman Have for Arithmetic?
In this chapter, Weber discusses the ways thrift has lived in the female population. In early years, women had no choice but to be thrifty. She includes the typical morning of one thrifty American woman in history. Sarah Tabitha Reid "woke up at four a.m., swept the kitchen floor, collected eggs, fed the family's chickens and turkeys, fetched water from the well, and made the fire-and that was all before breakfast," (p. 80) but as populations grew, families migrated towards the central hubs of the towns and women became less of producers and more of consumers of goods.
Weber goes on to discuss how women became the financial budgeters of the family. They learned how to reuse old products and shop for things before they became scarce, and therefore more expensive. This was the beginning of modern home economics.
Cheap Jews and Thrifty Chinese
In this chapter, Weber discusses the stereotypes of Jews and Chinese as cheap. As many Catholics were afraid to get into the business of lending, Jews took advantage of the opening. In this profession, as creditors and then as collectors, they were easy targets though they lived modest, respectable lives. The Chinese were stereotyped because of their simple, inexpensive diet and their early willingness to work for much lower wages. The gold rush brought many Chinese immigrants in a desire to strike it rich and return to China with their newfound wealth. Later in the chapter, in discussing why these stereotypes are still continue today, Weber poses the question, "are they successful because they're thrifty or are they labeled thrifty (derisively, admiringly) because they're successful?" (p. 126)
Use It Up, Wear It Out, Make It Do, or Do Without
In this chapter, Weber begins by discussing the effect of war on American thrift. War bonds and stamps were sold, often by pressures such as pamphlets asking, "Have you helped your country by investing in the war loan, or have you helped Germany by keeping your money in your pocket?" (p. 135) Americans were urged to contribute what they could to the war effort by purchasing bonds and by being less wasteful. They were urged to "go back to simple food, simple clothes, simple pleasures." (p. 138) Women were pressured to sign pledge cards stating that they would find substitutes for more expensive goods, make less waste by using every part of every product, and grow their own food at home. Americans patriotic thrift ended soon after the war. As in history before, people couldn't wait to get back to spending. Some of this spending was done on credit, as buying on credit was becoming more and more popular.
After the stock market crash led to a depression, thrift returned as a way of life out of desperation. People either didn't have money to spend, or were afraid to spend it which made things even worse. Weber goes on to discuss how politicians then changed from promoting thrift as patriotic, to promoting spending as patriotic. "Consumption had been reframed: shopping wasn't just about personal gratification anymore; it was a patriotic act with national consequences." (p. 157) As the next war brought America out of the Depression, people were urged not to waste. Ration rules were established, sometimes even on things that weren't limited. But this time Americans weren't urged to save as "economists fretted over the possibility that Americans would save their way into another postwar depression." (p.163)
Lively Golf Balls and Two-Ford Freedom: The Postwar Years
In this chapter, Weber further discusses the effect of the Second World War on consumer spending. Economists were afraid that the country would slide into another recession and urged America to spend, spend, and spend more. Commercials were designed to promote a higher standard of life to the general public. They didn't stop at promoting the purchase of one car, but portrayed housewives with the newfound freedom of having a second vehicle for household use. And when retailers were getting nervous that the public would end up with everything they needed and not have a need for more purchases, they got creative. Home and apparel fashion was kept moving at a high pace with many new designs. Appliances were designed to have a shorter life. And when retailers were asked to answer for these new policies, they defended their actions with the claim that they were helping fuel the economy and helping keep unemployment down.
Weber discusses how this new trend of spending continued on for many years. Helping to aid in the spending, credit cards were issued, with the first being the Diners Club card. These cards allowed a quickly evolving consumer society to purchase more than they ever thought they could. Though there were some who refused to borrow more, who stayed true to their frugality throughout the spending madness, "thrift was no longer broadcast as an American ideal." (p. 181)
Spendthrift Nation
In this chapter, Weber discusses the effect of consumer spending, and lack of saving on the economy. She starts by discussing the drastic drop in saving. While financial security should be priority number one in a recession, the American public still focuses on spending. As the purchases of luxuries increases so does consumer debt. And this debt continues to take up more and more of the typical American family's income. It's like a vicious circle. As we purchase more goods, we rack up more debt. As we rack up more debt, we spend more of our income paying our debts and have less to spend on day to day expenses. When we have less money to spend, we have to rely on credit, racking up yet more debt. Weber also discusses the situation many Americans are going to face at retirement. Defined benefit plans are rarely used as employers want to shift the risk to employees. And even the amount employers are willing to match in defined contribution plans, such as 401k's, continues to shrink. Many Americans are going to be forced to work part time or even full time jobs after they reach retirement age.
Weber also discusses the effect of the lack of savings by citizens on America's budget. America has been forced to borrow more and more from other countries. The amount that we pay other countries just in interest is staggering. Weber discusses as a solution to the debt problems our country is facing, a delicate balance of consumer spending and saving.
Eco-Cheap
In this chapter, Weber discusses the ways that thrift can actually help the environment. She talks about the effects that consumer spending has on global warming. The more products we buy, the more waste is created. Weber says, "The absolute cheapest way to save the planet is to stop buying stuff." (p. 213) She discusses how the "green movement" is aimed at slowing global warming, but mentions that those who have the best effect on the environment are those who don't spend. By trying to save gas money, thrifty individuals are reducing emissions. By reusing old products that many would throw out, they are reducing the massive amounts of garbage piling up in landfills. Weber also says, "Reducing our consumption may be the only way we can halt and even reverse some of the ecological damage we've wrought over the last few centuries of industrial culture." (p. 209)
Living Cheap in the Age of Mass Consumption
In this chapter, Weber discusses the people who are "rebelling against an age of mass consumption." (p. 224) Though she talks about independent individuals who devote their lives to cheap survival, she focuses on groups called "compacters" and "freegans." A group known as compacters collectively decided to stop spending money on new items other than food and medicine. These people allowed themselves to purchases second hand items, but nothing new. The other group, freegans, try to completely limit their spending. Some of their activities include dumpster diving (for food as well as other items) and squatting (to avoid paying rent). These people are able to "resist the seduction of the retail-industrial complex" and live frugally.
Cheapskate Psychology
In this chapter, Weber discusses the psychology of frugality. She begins by talking about Freud's idea that frugality has something to do with "unresolved potty-training issues." (p. 246) She later discusses that it comes partly from guilt and also partly from fear. While some people simply feel guilty by indulging in luxuries, some are afraid that by spending, they won't have money in case of emergencies later. Weber also reveals research that shows higher levels of anxiety, and even slight pain, in situations where people would have to purchase things. She finishes the chapter by discussing the law of diminishing returns in regards to frugality. She compares the amount of enjoyment you get out of something that you don't allow yourself to purchase often to the amount you would get out of something that you indulge in often.
Conclusion
In this chapter, Weber begins by discussing some of the ways that writing this book has changed her spending habits. By using some of the methods that she wrote about in previous chapters she has reduced her monthly spending by almost half. While frugal living has historically been a cycle, frugality in bad times with massive spending when the times rebound, Weber speaks of her hopes that awareness of the issue of global warming "just might change the game" (p. 273) in the cycle and convince people to carry on their frugal habits.
The Video Lounge
http://www.youtube.com/watch?v=nJaluF7h_ec
This clip shows a lecture by Chris Farrell. His argument for cheapness being the opposite of frugality is based on sustainability. By being frugal, rather than cheap, we still buy our necessities, but we buy with an eye on the future.
Personal Insights
Why I think:
With business conditions today, what the author wrote is – or is no longer true – because:What the author wrote is true because of the status of our economy. Unemployment rates are high and people are starting to limit their expenses. The necessity of the times is forcing people to be more frugal, yet when things get better, I'm sure that the cycle will continue. People will be ready to pounce on the opportunity to spend money on luxury items. The cycle has carried through the history of America, and I believe it will continue to repeat itself.
Then, all of the following bullet-items are mandatory to write about:
If I were the author of the book, I would have done these three things differently:1. I would have included more stories. They make a more interesting read.
2. I would have given more ideas of how people can reduce their "footprint" by being frugal.
3. I would have organized the paragraphs differently. They could have been broken up into shorter, more focused paragraphs.
Reading this book made me think differently about the topic in these ways:1. I have realized that by being frugal, I can have an impact on the environment.
2. I have realized that there truly is a difference between being cheap and being frugal.
3. I've learned that history repeats itself, even in the history of frugality.
I'll apply what I've learned in this book in my career by:1. I will make sure to have a balance between saving and spending.
2. I will try to be frugal in ways that have a positive impact on the environment.
3. I will try to make less waste and reuse existing things.
Here is a sampling of what others have said about the book and its author:"What others (scholarly and magazine reviews – along with on-line reviews – not simply reviews off the back of the book) have said about the book and its author?"
While Valerie Weaver-Zercher "can be a little sensitive about the word cheap," Tom Barlow finds that "her exploration of the paradox of thrift is the most interesting aspect of the book." There are many different ideas on the concept of frugality and the way you feel about spending is bound to influence your opinion of the book.
Bibliography
Barlow, T. (n.d.). Book review: In Cheap We Trust. Personal finance news, advice, calculators - WalletPop. Retrieved November 8, 2010, from http://www.walletpop.com/blog/2009/10/05/book-review-in-cheap-we-trust/
Weaver-Zercher, V. (n.d.). A review of In Cheap We Trust and The Cheapskate Next Door | The Christian Century. The Christian Century. Retrieved November 8, 2010, from http://www.christiancentury.org/reviews/2010-09/nonfiction-4
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Contact Info: To contact the author of this "Summary and Review of Lauren Weber's In Cheap We Trust: The Story of a Misunderstood American Virtue," please email Miranda.Manuel@selu.edu.
Biography
David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of works he has helped his students to turn into editorially-reviewed publications at the following sites:
Management Concepts (http://toptenmanagement.blogspot.com/) Book Reviews (http://wyld-about-books.blogspot.com/) and Travel and International Foods (http://wyld-about-food.blogspot.com/).+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Written by David Wyld
Professor of Management, Southeastern Louisiana University
Video for 'Cheap And Cheerful', directed by Sophie Muller. It's the second single to come from the bands forthcoming third album, out March 2008. www.thekills.tv www.myspace.com/thekills Video Rating: 4 / 5
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