Horse Trading in the Age of Cars: Men in the Marketplace (review)

Steven M. Gelber notes that cars became the only mass produced consumer good sold by haggling at in the early twentieth century. This happened at precisely the time that fixed prices were becoming the norm for other goods because of the rise of national branding and the emergence of the department store. His central thesis is that this happened because the new technology filled the role of the horse. Buyers and sellers (typically men) had long haggled over horses since, as biological entities, there was considerable variation from individual to individual. The pulling power of horses varied not just with size and health, but as one prominent analyst noted, with “will.” There were other intangibles that affected the utility of equids, such as gait, conformation, and willingness to bond with another species. As Gelber points out, bargaining over such animals was asymmetric. Invariably sellers knew more than buyers. At a time when courts were extending the power of consumers over vendors, caveat emptor remained the norm in horse trading. In modern car-buying the same asymmetry remains, especially over the crucial issue of price, often played out over the issue of trade-in value.

This thesis rings rings true, although I have a few caveats about it. By the 1890s, at least in big cities, most horses were sold in large auction houses, which insisted that sellers offer “no questions asked” warrantees, typically for 48 hours. Still the street market, mainly for used horses, attracted exactly the kind of underhanded dealing that often appears in used car sales today. Geller’s case would be stronger if he had given more examples of horse traders becoming car dealers. It may well be that carriage traders, a somewhat more reputable group, were the crucial links. The auto was produced by very large corporations, which sought, usually with futility, as Gelber notes, to restrain practices that were giving the whole industry a bad name. Finally Gelber also points out that courts extended far more protection to car buyers than horse buyers. More prosopography of early car salesmen would have clinched his case.

Inevitably, readers will ask for a comparison with Sally Clark, Trust and Power: Consumers, the Modern Corporation and the Making of the United States Automobile Market (New York: Cambridge University Press, 2007). To summarize briefly, Gelber is better at the buyer/salesperson nexus and at gender issues (women are more likely to be victimized by the asymmetrical knowledge of automotive transactions and the general masculinity of self-described “car guys”). Clark gives a broader view of automotive corporations and their marketing policies.

Geller’s work is also praiseworthy because it avoids the kind of temporal parochialism that characterizes so many contemporary monographs, covering the entire automobile age. There are full-fledged descriptions of the seller’s market that followed World War Two when dealers underpriced trade-ins so they could claim to the producers that they were only selling new cars at list. This ran against the normal policy of over-pricing trade-ins, in effect offering new cars at a discount, something the producers also opposed. An especially strong chapter shows how the Monroney Act (1958) was manipulated to deceive consumers, probably compounding the problem it was supposed to cure.

Did such sleazy sales practices drive consumers away? Probably not, Gelber argues. Car salespeople have mastered the art of making consumers believe that they are getting a deal, evidently successfully, Detroit’s most important attempt at fixed price sales, the Saturn, has failed, as have internet dealers pursuing a similar policy. Japanese car firms, for all their success in breaking American manufacturing and design practice, have never tried to create their own sales regime, a sign that it works.