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Low-cost practices

Les pratiques du low cost

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Published on Thursday, September 22, 2016

Abstract

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The notion of “low-costing” - which can refer to a production process or finished product – is difficult to define. The term is also applied in a geographic sense, referring to the cheapness of a country’s workforce. This semantic confusion is one of the reasons it is worth focusing on the construct and analysing its growing importance, notably in the Western world.

Announcement

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 Coordination

Marnix Dressen and Jean-Pierre Durand

Argument 

The notion of “low-costing” - which can refer to a production process or finished product – is difficult to define. The term is also applied in a geographic sense, referring to the cheapness of a country’s workforce. This semantic confusion is one of the reasons it is worth focusing on the construct and analysing its growing importance, notably in the Western world.

Clearly, the fact that most products (and services) are characterised by a variety of quality and price levels is nothing new. Yet above and beyond price-based competition, there are questions about the emergence of a new model that might be defined through its two main (interrelated) principles[1]:

  • Radical simplification of products and services reduced to their core functionality (i.e., no deluxe or comfort attributes, no aesthetic ambitions). Examples include point-to-point air or rail travel (with less room or services offered unless supplements are paid); the design-manufacturing of “basic” cars; and goods sold by hard discount retail outlets in their original packaging or on palettes.
  • Minimised input costs (cheap materials and minimal spending on labour). This intimates a massive use of subcontracting, an offshoring of productive activities to countries with an inexpensive workforce, an attractive capital taxation regime, the intensification of work and/or a systematic downgrading of people’s job status.

Low-cost approaches have a direct impact on work, construed here as a core institution. They also affect employees, directly in the companies undergoing the process but also “by contagion” by causing a firm’s rivals to match its race to the bottom in terms of wages and working conditions. The social model born out of modern technological changes such as the Internet also tend to focus on low-costing, with the growing de-materialisation of trade becoming a leading factor in price reductions and in the transformed dissemination of products and services.

 “Low-costing” gives the impression of being a continuous trend. It is possible, for instance, to find its roots in the emergence of mass retail outlets in France in the 1960s, succeeding the local groceries that had prevailed until then. This was followed by “hard discounting”, intimating that online sales by websites specialising in “bargain basement prices” may be little more than a new vehicle for the perpetuation of this logic, based as always on the idea that more and more work should be done by consumers themselves[2].

More broadly, there is also a question whether “low-costing” causes a divide between employees and consumers’ sense of identity. As consumers, it may be in people’s interest for costs to reduce dramatically but this harms them as employees because it means lower wages hence a vicious cycle of increasingly low-cost products. Based on analysis formulated by Marx and the Frankfurt school, the question can be asked whether the low-cost logic exacerbates the fetishism for goods and increasingly invisible conditions governing production in a capitalist system. The idea here is that low-costing actually radicalises traditional capitalism. Even further, it needs to be determined whether the methodical quest for lower costs – with no concern for producers’ welare - embodies a kind of “anthropological revolution” in the sense that Norbert Elias gave to this term, meaning an in-depth transformation of mindsets in a way that makes it impossible to consider certain situations at length because of the emotional effect. The general narrative today is that society is at the dawn of a low-cost culture that will help everyone. The reality is that it benefits the economic elite, being the only ones capable from now on of affording expensive deluxe consumption behaviour.

1 – Analysing low-costing in its different dimensions

Contributions might cover the following topics:

Historical and geographical approaches:

“Low-cost” is generally depicted as resulting from the crisis in industrial capitalism’s growth and regulation. It is also portrayed as a child of financial capitalism. Questions here are whether the roots go further back in time (and how far); what kinds of actors have promoted it; under what circumstances; and with what intentions. Moreover, if the phenomenon goes further back than first imagined, the way its prolegomenon differs from today’s realities is also worth analysing, as are the political spaces where it was born (continents, nation-states, regions etc.) and alongside of this how low-cost issues were and are viewed in different spaces across the world (location, morphology, important, etc.).

Employment and work:

It may be possible to determine an order of magnitude characterising low-cost activities’ economic scope and dynamics, particularly in terms of how this breaks down  between the industrial, service and even primary (agricultural) sectors. The issues here are the specificities of these jobs (including working conditions) and whether the workforce involved typifies the norm in terms of gender, age, national origins and levels of training. Otherwise, there are the question of whether branches, sub-branches or “professions” subjected to low-cost imperatives experience different kinds of industrial conflicts and collective bargaining, and more specifically whether they resemble the variants observed in the primary job segments that Doeringer and Piore have identified (1971). This is another way of ascertaining whether low-cost approaches have spread to more ordinary jobs and what if any effects this might have had on actual work and the organisation thereof. Low-cost production and jobs might be causing a generalised race to the bottom, or conversely creating greater polarisation between the top- and bottom-of-the-range. Of course, if this polarisation does exist, it could be associated with the emergence of intermediate level production for producers (i.e., middle cost approaches like those seen in passenger air traffic).

A range of different models:

There is every chance that low-cost models are not singular but multiple in nature. The question then becomes whether industrial and service activities sharing this description can be characterised in a similarly transversal vein or whether the low-cost phenomenon entails distinct realities specific to given socio-economic spaces (attesting to vertical segmentation). Similarly, it needs to be seen whether branch specificity has a greater impact than national specificities, or if not, how the two might be hybridised.

In terms of low-cost product markets, analysis of their weight in visible economic production (and analysis of the underlying dynamics) would also be welcome, given insufficient knowledge about low-cost companies’ total turnover and contribution to national GDP. Along the same lines, it would be good to look at how in large traditional companies the relationship has evolved between traditional activities and low-cost diversifications. It is not clear that data exists today enabling statistical evaluation of these phenomena. Hence some vagueness regarding the potential interpretations and meanings that might be associated with this kind of change in the productive system. Lastly, there is the question whether the private sector is the only one affected by low-costing or if the public sector is also changing (i.e. via de-materialised relationships within users, administrations and state-owned enterprises).

2 – The social effects of low-costings

Low-costing may also have social effects that can vary between different customer segments which will themselves vary depending on age and social class (with younger and/or less affluent populations potentially experiencing the phenomenon differently than upper-middle-classes suffering less from the multitude of crises affecting Western society today). Along these lines, contributions might look at how the rise of low-costing has affected leisure activities (i.e. basic hotels with no reception staff) and to what extent it has changed people’s professional activities (i.e., managers with employer-paid travel expenses now traveling on low-cost airlines).

Given the reduction in production costs and the low prices practiced in many service sectors (and certain industrial products), another topic might be whether low-costing helps to maintain and/or even increase lower social classes’ purchasing power. It may achieve this by increasing access to goods and services that were previously out of reach for less affluent populations (international flights, new cars, etc.). In this sense, low-costing might also be seen as partially replacing a Keynesian state that has been weakened and is in debt. It might also possess an integrative social function that is partially structured around the never-ending search for inexpensive goods[3] . This intimates that the low-cost phenomenon should be attributed functions that are generally associated with a “civilising process”, in the sense of enacting the aforementioned “anthropological transformations” and inducing social categories that love the Internet but lack economic capital to constantly seek greater value for money by emphasizing price more than any other factor.

Since customers buying low-cost products and services are also present or future workers, they may be experiencing a contradiction between their buyer function (tempted by low prices) and their employee function (with work and job conditions potentially degrading due to the production of entry-level goods). The issue at that point becomes the validity of framing this in terms of split identities. Beyond this, the low-cost phenomenon may also cause environmental damage by increasing the consumption of certain fossil resources (see the carbon footprint of air travel and other industry activities). This raises questions about how to combine the phenomenon with the aspiration for less social inequality.

[1] See Combe Emmanuel, Le low cost, Paris, La Découverte, 2011.

[2] Ostensibly involving in this case low-cost products less (computers, refrigerators, etc.) and more their sale/purchase.

[3] For analysis of how low costing affects social structures, see Gaggi Massimo and Narduzzi Edoardo, La fin des classes moyennes. Ou la naissance de la société low cost (“The end of the middle class or the birth of a low-cost society”), Paris, Editions Liana Levi, 2006.

Submission guidelines

The present call for contributions targets social science researchers (historians, geographers, sociologists, economists, philosophers, anthropologists, etc.) and everyone with an interest in the low-cost economy (company managers, trade unionists, consumers, etc.) etc. Articles may have a maximum of 45,000 characters (including spaces and bibliography).

They must be submitted before 1 March 2017

to nrtravail@gmail.com as per the modalities and presentation norms specified in the Soumission et évaluation section of the NRT website: nrt.revues.org


Date(s)

  • Wednesday, March 01, 2017

Attached files

Keywords

  • low cost, emploi, travail

Contact(s)

  • Arnaud Chabrol
    courriel : nrtravail [at] gmail [dot] com

Information source

  • Arnaud Chabrol
    courriel : nrtravail [at] gmail [dot] com

License

CC0-1.0 This announcement is licensed under the terms of Creative Commons CC0 1.0 Universal.

To cite this announcement

« Low-cost practices », Call for papers, Calenda, Published on Thursday, September 22, 2016, https://calenda.org/377767

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