Feb. 13, 2013 at 4:34 AM ET
Price tags are as fundamental to a market economy as money. Yet they've become an endangered species in the 21st century American economy. Quick: Can you say how much you spent on your cellphone bill last month? Or pay television? I'm sure you can't say how much you paid in fees on your investments.
And if you've been to a grocery store lately, you know that price tags have quite literally disappeared from most items, replaced by often-confusing shelf tags.
We've discussed this phenomenon before at Red Tape Chronicles, focusing on failed efforts by a 90-something-year-old consumer advocate named Esther Shapiro to save price tags in the state of Michigan.
Why are clear price tags important? Without them, there is no competition. Consumers can't shop around and pick the best price, or make judgments about the best value. Sure, it can seem silly to complain about hunting around for prices on spaghetti sauce jars, and critics have a point when they talk about the waste of labor it involves.
But the real problem with slain price tags comes with newfangled subscription products, where consumers slowly but surely become numb to price, and where hidden fees, huge bills and bait-and-switch teaser pricing leave buyers utterly confused. This phenomenon obviously hurts consumers, but it hurts industry too -- with clear pricing, the best companies with the best products and the best value are rewarded over time. Without clear prices, companies that create the most confusion win, and honest companies slowly fade away. For an academic look at this phenomenon, read, "Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets."
In our Red Tape Chronicles: Protection series, we decided to take a very different approach to communicating the problem of disappearing price tags; a whimsical animation, created with collaboration from artists at the School of Visual Arts in New York City. Click on the play button above to watch. We hope you'll find it fun and persuasive.
The potential extinction of price tags threatens our economy and our way of life, as it did during the Recession of 2008, which was caused in part because folks didn't understand how much they were paying for their houses, and how much the borrowed money cost. It's time for a more focused discussion on this critical element of capitalism, and we hope we've begun that discussion here.