The Crisis of Cheapness: Why Low Prices Are Costing the World Its Future

By Fiona Cheng Aug. 25, 2025

The story of the modern economy can be told through a single obsession — making everything cheaper. From fast fashion to fast shipping, progress has been defined by price deflation, efficiency, and access. But the relentless drive to lower costs has produced a paradox: the cheaper the world becomes, the poorer it feels. Wages stagnate, environments collapse, and meaning evaporates in a marketplace that values affordability over integrity.

According to the World Bank Global Cost Competitiveness Study (2024), the real price of consumer goods has fallen by an average of 36 percent since 1990, even as ecological degradation, labor precarity, and inequality have soared. What once symbolized democratization — the ability of the masses to buy what only elites could afford — now represents depletion. Cheapness has stopped liberating people and started hollowing civilization.

The Economic Theology of Affordability

The pursuit of cheapness began as moral economics. In the 19th century, industrialization promised abundance for all, ending scarcity through mechanization. By the late 20th century, globalization perfected this dream. Lower prices were proof of progress — a quantifiable good.

But affordability is not free; it is outsourced. Each “discount” conceals an unpaid bill — in carbon, in wages, in waste. The OECD Environmental Accounting Review (2024) estimates that for every dollar saved by consumers through globalized trade, fifty cents of unpriced external damage is generated elsewhere: pollution, deforestation, or informal labor exploitation.

What we call “efficiency” is simply displacement.

The Labor Behind the Low Price

Cheapness depends on invisibility. Supply chains stretch across continents precisely to hide their human cost. Garment workers in Bangladesh earn as little as US$0.33 per hour; cobalt miners in the Democratic Republic of Congo, supplying global EV production, average US$2 per day. Yet their output fuels trillion-dollar industries that advertise “ethical sourcing.”

In 2024, the International Labour Organization found that 58 percent of global workers operate in “cost-competitive supply structures” — meaning their employment exists solely to suppress prices. Wage compression has become the invisible infrastructure of globalization.

Every bargain is a small act of extraction.

Environmental Deflation

The planet, too, pays for cheapness. As prices drop, consumption expands — a dynamic economists call the rebound effect. Gains in efficiency make goods cheaper, which increases demand and neutralizes environmental benefit. The International Energy Agency (2024) found that although the energy efficiency of appliances improved by 45 percent since 2000, household electricity use rose by 32 percent due to proliferation.

Fast fashion exemplifies the pathology. Global clothing production doubled between 2000 and 2020, while average garment lifespan halved. Over 100 billion clothing items are produced each year; less than 1 percent are recycled (Ellen MacArthur Foundation, 2023). The economic miracle of cheap apparel has become an ecological catastrophe of disposability.

Cheapness accelerates entropy.

The Psychological Price Collapse

Affordability does not only distort economics; it flattens value. When everything is inexpensive, nothing feels significant. A generation raised on endless sales and instant shipping has lost the sense that objects carry history or labor.

The University of Cambridge Consumer Studies Lab (2024) found that individuals exposed to daily online price promotions exhibited lower long-term satisfaction with their purchases and higher anxiety about financial security — even when their material wealth increased. The “paradox of cheap pleasure” is that abundance erodes appreciation.

A culture that worships affordability ultimately cheapens desire itself.

The Political Consequence of Low Prices

Governments, addicted to consumer confidence, perpetuate the cycle. Monetary policy rewards spending over saving; fiscal policy subsidizes consumption over production. Inflation control — keeping goods cheap — dominates every election promise, even when the costs are deferred to future generations.

In effect, nations compete not for innovation but for deflationary dominance. The IMF Structural Trade Report (2024) warns that “systemic underpricing” — the race to produce cheaper goods via currency manipulation, wage suppression, and deregulation — now poses greater long-term risk to economic stability than debt crises. The world’s wealthiest economies depend on an illusion: that prosperity can exist without proportion.

Cheapness has become the new imperialism — conquest through cost.

The Tech Illusion: Free but Not Free

Digital platforms perfected the ideology of cheapness by making price disappear altogether. Social media, search engines, and entertainment apps offer services for “free,” monetizing attention instead of currency. The true cost is privacy, time, and democracy.

The MIT Digital Economy Review (2024) estimates that the average user contributes US$768 per year in data value to major tech platforms — far more than a typical subscription would cost. Yet users, conditioned to expect zero-cost access, resist paying directly, perpetuating the barter of autonomy for convenience.

The invisible price is not an accident; it is the model.

When Everything Is Cheap, Nothing Is Resilient

The pandemic revealed the fragility of the cheap world. Supply chains optimized for cost collapsed under pressure; healthcare systems built for efficiency lacked redundancy. Cheapness, in the end, is anti-resilience.

As climate change, geopolitical fragmentation, and demographic shifts intensify, the “just-in-time” model of global trade is giving way to “just-in-case” economics — redundancy as a virtue. Japan’s Resilient Manufacturing Policy (2023), which subsidizes regional production despite higher costs, increased domestic industrial employment by 11 percent while stabilizing supply availability.

Sustainability, it turns out, is expensive — but so is collapse.

Revaluing the World

The solution is not inflation, but revaluation. Economies must learn to price honestly — integrating social and environmental cost into the logic of affordability. Carbon pricing, fair-trade frameworks, and circular design are early steps, but deeper transformation requires cultural change: redefining what “cheap” means.

In Denmark’s True Value Experiment (2024), supermarkets displayed products’ ecological and labor-adjusted prices beside retail prices. Sales of high-impact goods dropped 23 percent in six months. Transparency, not guilt, began to restore proportion.

Cheapness should not be a virtue but a warning label.

The Moral Economics of Enough

For two centuries, capitalism’s moral promise was that cheapness equals progress. But the 21st century reveals the opposite: progress may depend on paying more — in money, time, and attention.

The economist Kate Raworth wrote that “a healthy economy is designed, not grown.” A moral economy, we might add, is priced, not discounted.

To rebuild resilience, dignity, and meaning, the world must rediscover the lost art of paying what things are truly worth.

Because nothing is cheaper than the illusion that cost doesn’t matter.

Works Cited

“Global Cost Competitiveness Study 2024.” World Bank, 2024, www.worldbank.org.

 “Environmental Accounting Review 2024.” Organisation for Economic Co-operation and Development (OECD), 2024, www.oecd.org.

 “World Employment and Social Outlook 2024.” International Labour Organization (ILO), 2024, www.ilo.org.

 “Global Energy Efficiency Outlook 2024.” International Energy Agency (IEA), 2024, www.iea.org.

 “Circular Fashion and Waste Report.” Ellen MacArthur Foundation, 2023, www.ellenmacarthurfoundation.org.

 “Consumer Behavior and Value Study 2024.” University of Cambridge, 2024, www.cam.ac.uk.

 “Structural Trade Report 2024.” International Monetary Fund (IMF), 2024, www.imf.org.

 “Digital Economy Review 2024.” Massachusetts Institute of Technology (MIT), 2024, www.mit.edu.

 “Resilient Manufacturing Policy 2023.” Ministry of Economy, Trade and Industry (Japan), 2023, www.meti.go.jp.

 “True Value Experiment 2024.” Danish Ministry of Climate and Business, 2024, www.en.fm.dk.