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How the Quakers Became Unlikely Economic Innovators by Inventing the Price Tag (aeon.co)
Belying its simplicity and ubiquity, the price tag is a surprisingly recent economic development, Aeon magazine writes. For centuries, haggling was the norm, ultimately developing into a system that required clerks and shopkeepers to train as negotiators. In the mid-19th century, however, Quakers in the US began to believe that charging people different amounts for the same item was immoral, so they started using price tags at their stores to counter the ills of haggling. And, as this short video from NPR's Planet Money explains, by taking a moral stand, the Quakers inadvertently revealed an inefficiency in the old economic system and became improbable pricing pioneers, changing commerce and history with one simple innovation.
What the Quakers actually said was "my price is the same for any man, be he a pauper or a king".
I was taught that the Quakers started doing this in the early 1700's here (UK). My school was founded in 1703.
I was never convinced about the morality though. I have lived in countries where they still haggle. I bought coffee and milk from the same person nearly every day for six months, and I am pretty sure I never paid the same amount twice. Its not just about how well the customer is, or otherwise - its also about how keen the seller is to get money quick. If you are really poor, you still may get the seller to sell at a loss, rather than carry their wares home after closing time, especially if the goods are perishable. (Also true in London markets today). In the 1700's most people self employed, and were able to control their own destiny more than employees can (if you were an employee, you were not in a good position at all).
But the video is correct, in a big store, fixed prices are definitely an advantage.
And haggling school? well just try taking a taxi in any third world country - you either get it pretty quickly, or you will go broke! However, in the spirit of equality, Uber is bringing the Third world to everyone, everywhere.
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One of the Testimonies of the Religious Society of Friends (Friends, to Quakers, but most people call them Quakers) is equality. Another is honesty and others include integrity, truth, and simplicity. Friends believe in doing their best, in other words, not doing shipshod work. If they have an item they have produced for sale, say, for example, a chair, then, as part of their belief in integrity, they will have put their best work and used quality material in making that chair.
With that in mind, at one point, and I don't know if this started with just one Friends' Meeting or how it spread, but the consensus was that if you've worked diligently on a chair and one person comes into your shop and offers you $10 for that chair, but the fair value (considering labor and materials) is $5, then it's being dishonest and acting without integrity to take the additional $5 because that person was not a good negotiator. It's taking advantage of their lack of time or inability to negotiate. On the other hand, if a Friend has put in conscientious work and has to make a choice between selling it for $3 or not selling it, that's not fair to them.
The consensus, for a while, had been on a fair price for a fair amount of work and materials. From there, it wasn't far to go to reach a conclusion that if $5 is a fair price for that chair, then, barring changes in costs for materials (or maybe labor or cost of living), then gaining more or accepting less through dickering is less than fair, to either the shop owner or the customer.
While I know many will say, "Well, if they don't take all they can get for it, they're idiots!" If your focus is on the accumulation of wealth and possessions, then, from that point of view, that may be true. But if your intent in life is not material, but on personal improvement, growth, and following your spiritual beliefs, than there is much more to be gained from turning down the extra money offered than there is in accepting it. Friends are big on fair gains as opposed to grabbing what you can when you can. (Which is why they don't gamble and generally are quite careful in selecting what stocks they will invest in.)
Remember, this may not seem moral or immoral to you or others. That's okay. For Friends, their concern is in doing what they believe is right.
One key to this innovation is to really try to understand the motivation from a personal level. The existing practice required the Quaker store owner to try to haggle with the customer for every transaction - which consists in some sense of an effort of two parties to deceive each other about what one is willing to pay or accept. And the Quakers greatly emphasized strict personal honesty - so this was a frequent unpleasant experience that they wanted removed.
Additionally in a close knit community different people paying different prices is a source of social tension. Shop owners no doubt experienced customers - people of the community they knew - wanting the same price some other person of the community that they knew received. If this happens very often the temptation to simply set the same price in practice becomes strong. And if you do that why not just write it down and save the owner some time, and halt unwanted attempts to haggle.
Talk of "axioms" is irrelevant (and it should be noted that axioms are by their nature arbitrary). Although such an argument could appeal to a modern urban intellectual individualist, it would have appeared bizarre to an 18th Century close knit community devoted to personal moral improvement.
Interestingly the Quakers were also one the prime originators of the anti-slavery movement. Before the mid-18th century the notion that slavery might be intrinsically immoral was an extreme fringe notion. Slavery was generally accepted socially, legally, and religiously.
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The Double Glazing sales industry (in the UK) brought haggling back with vengeance. They insist that can't give you a quote without sending a sales guy into your home because apparently you're unable to take half assed measurements at the same level as that the sales person who does the same and says a surveyor will have to come and measure things precisely anyway. And once in, they pull discounts out of their butts, and if you send them off they'll call you with even more discounts on top of "those are all the discounts available mate" that you got already.
In my specific case, the list price went down from 9K to 3K after all the discounts and a customer retention discount (i.e. I canceled on them shortly after taking their offer). How is that even possible?!
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An excellent idea. At the same time, we can get rid of usury.
Perhaps it's because the rich most often obtain their wealth not from hard work but through pricing differences on stocks and the borrowing of money to others? It's precisely because as a society we want these things, we allow these things to exist to improve liquidity--to avoid the wealth to merely horde their assets or see where their wealth could be used to move goods and profit from the price difference. It's also precisely we realize that that's where most of the extreme wealth comes from that we were, for a long time, willing to charge at a much higher tax rate on that wealth precisely because the earnings were not at all in proportion to the effort.
In fact, it's rarely in proportion to the economic good or social good either, but that's the problem with using taxes as a means of trying to maintain social justice. There exists no perfect tax code because it's impossible to adequately tax people fairly. A flat amount is unfair because wages for the same work vary by region; it's also unlikely to be payable by many. A flat proportional amount is unfair because nothing about proportionality is fair because neither wages nor costs are proportional by work or region. Nor is progressive or regressive taxation fair. In fact, it's basically impossible to have a fair tax rate let alone one that provide sufficient revenue to any government.
Beyond the fact that, no, let the left doesn't want to tax people at over 90%, I'm unaware of anyone who in the long-term has a negative tax rate even with tax credits--maybe some corporations?--without committing tax evasion. People pay a lot more than income tax and while there are some tax credits that can grant people negative tax rates for a few years, they're not a permanent thing and the accumulation of all taxes is positive.
But you are right in one respect: those who are disabled or are mentally challenged do receive benefits in excess of what they contribute. Generally over the population, there's certainly individuals who have received a tax paid education for which they will never contribute enough in taxes or other economic benefit to overcome their cost. That's basically a universal truth of taxes: revenue is not equally collected and dispersed. In fact, if that's all taxes were, then there'd be no point in taxes. Taxes are inherently a form of wealth redistribution--I'm sure you're a big fan of the prisons and the poorhouses.
You can argue overall that certain people receive too much benefit. either because the class of benefit is unwarranted or the individual is undeserving, but with all the hand waving you're doing, I don't honestly think you even recognize where your tax dollars go or how this "theft" actual plays out. If you really want to avoid "theft", go somewhere without a government or any people.
You're thinking from your point of view, not the point of view of most Friends.
Regarding paying extra for a rush, remember this was in the 1700s. Yes, it's possible that someone could say, "I need a chair now and I'll pay $10." If they had a chair in stock, it would be the same to the shop owner as someone who was not in a hurry to get it. If they said, "I need a chair by tomorrow and I'll pay extra," likely the response (in that era) would be something like, "Friend, I wouldst be glad to make a chair for the as soon as I can, but I would not be able to complete it by tomorrow." On the other hand, if he could do it and it was something he could do easily, he would still do it without an extra charge. It's not likely he would stay up, for example an extra several hours, to get a chair done for a "rush" order.
As to the "true value," yes, that depends on what people are willing to pay for it, but Friends would have been making products that people can use. Furniture, tools, maybe simple toys, but not something like a fancy high end chair with extra features. A shopkeeper or tradesman would know what the value of his product or labor was. They'd know what was going on in the market and whether people were paying $5 for a chair or not. This was at a time when people weren't dealing with newer models or new features and products that were unknown quantities that are riskier to sell. These shops and businesses would generally be shy of taking risks, so they'd be staying with a proven market.
While this led to the idea of set prices (and price tags), yes, a lot has happened since this practice started and much of it has nothing to do with Friendly views or values, but with greed or profit.
(And it's worth noting that while accumulation of material wealth was not a Friend's goal, that many Friends did well in commerce because they had a reputation for fairness, quality, and integrity. Much of their income would often be saved up because of their simple lifestyle.)
Ah yes, it's another "I know how to become rich, it's easy, just do X. I just don't do it because it's immoral!"
Not because it is immoral, because it requires significant capital to invest. Once you have a few million cash you can basically live well forever on just the return from relatively safe investments, with minimal effort.
That was Marx's point. If you own the factory it is relatively easy to sit back and watch the profits roll in while others do the hard labour, and someone without a factory can't just start sewing their own clothes and hope to compete with that. Owning the only means to generate wealth pretty much ensures that no-one else can get wealthy.
It works in practice too, e.g. companies that encourage employees to own stocks so they have a stake in its future.
Becoming rich is actually a property of the individual
That's a vague and unconvincing statement. The children of rich people clearly have a lot more opportunities in life - better education and health, low cost loans from their parents when no sane bank would lend to them etc. Many of them end up failing repeatedly, but they have that family wealth buffer to protect them.
const int one = 65536; (Silvermoon, Texture.cs)
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