Title: "The Price of Everything: Solving the Mystery of Why We Pay What We Do"
Author: Eduardo Porter
Publisher: Portfolio, 2011; 304 pages; $27.95
You might think that Shakespeare’s "Merchant of Venice" is excessively highbrow to be referenced much in the Southern-style, gospel music-filled services of African-American Missionary Baptist churches. Allow me to correct this misperception.
As a lifelong attendee of such services, there is one quote of the Bard I’ve heard, if once, a thousand times: "Even the Devil can cite Scripture for his purpose."
And so it is with homebuyers and the psycho-mathematical contortionism they practice in justifying the value they assign to a home, as most often reflected in an offer to buy a particular property.
Emboldened by the hazy refrain on which real estate agents cut their teeth — that the fair market value of a home is what a qualified buyer is willing to pay for it — buyers overlook highly comparable recent sales, they compare the price per square foot of the sprawling, ranch-style home they want to buy with the price per square foot of the Unabomber-cabin-sized carriage house that recently sold a few blocks away.
"That house down the street that sold for $300,000 had much more natural light and new counters," they might say, in a logical stretch to justify a $225,000 offer. Or "it’s a buyer’s market, after all — the seller is probably pretty desperate. This place has been on the market for 45 days already!"
And sellers are no better — everyone thinks their little shack’s value should be right about the same as the remodeled, expanded and upgraded palace two neighborhoods over, rather than the identical little shack next door. OK — I exaggerate. (But not by much!)
It’s no wonder, after years of defensive verbal sparring with buyers and sellers in an effort to disabuse them of their decision-ruining pricing psychoses, that the title of New York Times editorial writer Eduardo Porter’s latest book piqued by interest: "The Price of Everything: Solving the Mystery of Why We Pay What We Do."
Once I started reading, though, I went from piqued to engrossed with this intensely provocative and holistic look at the "prices," or values, we humans place on everything: from each other to faith, and even the future.
Porter’s thesis is this: Everything has a price, and not even just things — labor, our political and life choices, the people in our lives — everything. As Sting might say (or sing), "Every move you make, every bond you break, every step you take" — they all reflect your values and motivations. In "The Price of Everything," Porter aims to surface these values and motivations as they are reflected in the prices we will or won’t pay for various things, experiences and the like.
Porter explores such price phenomena as the data showing that people "enjoy" wine more when they believe it cost $90 than when they think it cost $10, and his own fickle preferences in coffee shops vis-à-vis their pricing, brand aesthetics, location and socialization opportunities — all of which turned out to be more critical, in the short run, than the way the coffee tastes.
He delves into the Veblen effect (whereby people conspicuously consume luxury goods not because they like them, but to signal their superiority to others) and many other irrational human tendencies when it comes to the price we pay for goods, as these glitches show how we think and feel.
Porter applies this entertaining mix of academic analysis, anecdotal cases in point, and commercial and governmental case studies to his treatment of "The Price of Life" (e.g., the value that individuals, their governments and industry places on human safety, labor, health and lives), "The Price of Happiness" (conclusion: you can’t buy it with money, but can with other currencies), and "The Price of Women" (he’s not just talking trafficking, here, but the value various cultures place on women, their work, and the "marital transaction," among other things).
Porter moves on, covering the "Prices of Work," "Free" (yep! those Internet freebies do cost), "Culture," "Faith and the Future," before touching on the economic destruction that can happen when prices fail to accurately steer our purchasing decisions, as when skyrocketing housing prices cause housing consumers to pay more and more, inflating a real estate bubble).
The title of "The Price of Everything" is misleading only in that "everything" implies that it covers only things. Porter delivers on his promise to explore not the economics of price and purchasing, but truly the entirety of human values, priorities and cultures, using monetary values as a gauge.