Consumer Sovereignty By Daily Marketplace Ballot
1. "When we call a capitalist society a consumers’ democracy we mean that the power to dispose of the means of production, which belongs to the entrepreneurs and capitalists, can only be acquired by means of the consumers’ ballot, held daily in the marketplace.”
~Ludwig von Mises in "Socialism: An Economic and Sociological Analysis," 1951, page 21.
2. “Consumers are the kings and queens of the market economy, and ultimately they reign supreme over corporations and their employees. … In a market economy, it is consumers, not businesses, who ultimately make all of the decisions. When they vote in the marketplace with their dollars, consumers decide which products, businesses, and industries survive — and which ones fail.”
~“Consumer, Not Corporate, ‘Greed’ Is Ultimately Behind Layoffs.”
17 Comments:
'Ask a large corporation, Coca-Cola, about the power of consumers when it introduced "New Coke," and the product promptly flopped. Then talk to the owners of the more than 600 Michigan businesses that filed for bankruptcy in 2001 and ask them who controlled their destiny? Then visit the International Supermarket Museum in New York, and view the 60,000 products that have failed in U.S. supermarkets, a convincing testament to what economists call "consumer sovereignty"'...
Bang! Totally on target Professor Mark...
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So true. The marketplace is far more of a democracy than government. In the marketplace elections are taking place every minute of the day with the votes constantly tabulated. It's the ultimate in giving power to the people.
Kudos to Professor Perry on a great article. In this new America, the right to purchase and spend as we see fit is one of the last freedoms available to common folk.
Yeah, but if we listened to these guys, we'd never have compact fluorescent light bulbs.
Mmmm. Mercury vapor.
I agree...but on the other hand, we might never have had the Internet without DARPA.
The real world flummoxes neat idealogical paradigms every time.
There is only one sure thing: If something, like national defense, is watered with public dollars, it will become increasingly coprolitic, parasitic and expensive over time, and suck money out of the jobs- and wealth-creating private secttor.
Consumer sovereignty and Wal-Mart present a great paradox for U.S. capitalism. Wal-Mart is both the largest consumer retailer in the U.S. and the largest customer for Chinese made consumer products.
The capitalist U.S., through Wal-Mart and others, sources products from increasingly government dominated manufacturers. China is fortifying its state businesses to fuel growth.
129 huge central government owned conglomerates are increasing their dominance of major industries. They have recently been expanding downstream in these industries for vertical integration. There are upwards of 8,000 local government investment companies that provide financing and regulatory relief to fund to much of the rest of the economy and control commerce.
The paradox of a capitalist country buying consumer goods from a consolidating government controlled economy, that suppresses a marketplace consumer sovereignity , should be the subject of debate and consternation for the beneficiaries of capitalism.
...except where it isn't. See adverse choice for an example of that. It's more of a case of "the only people that matter are the ones that count the votes".
What blows a nice large hole in that is relying on the dispersed nature of that power. They are hardly kings when their power gets usurped frequently. Once the concept of "we can afford to lose those customers" took hold, any concept of sovereign customers did too.
Thus the blame can go back rightfully on company action. In the case of Japan, their own government backing their companies at the US's expense.
Seth, I see where you are coming from. Regardless, are you suggesting that Americans have limted choice regarding purchasing? You can't have it both ways.
"In the case of Japan, their own government backing their companies at the US's expense."
If the Japanese government subsidizes Japanese automakers, that means that all those poor Japanese taxpayers are chipping in some amount to help pay for my car.
Thank you, thank you, thank you.
Jason:
Yes, given that the PR cost(time, money, reputation) for a company is less for the same effect than it is for an individual. They can steer people more easily to inferior products, or act against the will of the community.
Individuals can, but the costs are higher and they can be easily marginalized. An example of this is the focus on developing countries doing that to products destined to developed countries. Products that were designed with developed countries in mind (and adapted to developing countries) are now of lower quality due to the focus on the developing world(and simply localized for the developed world with no thought of developed world markets like the US). Acting against the will of the community is also harder for the flesh & blood individual, as they can be easily marginalized as well.
The individual is not on as high of a pedestal as Mackinac places them, nor is the business as servile as Mackinac wishes to describe them. But if they want to say up is down or black is white, the Mackinac Center isn't going to be stopped from doing so.
Quote from sethstorm: "... or act against the will of the community."
Who is this "will of the community"? It sounds really great, but I don't think I've ever met this person.
Who is this "will of the community"? It sounds really great, but I don't think I've ever met this person.
You're trying to fake your lack of knowledge on something. Why?
When the community at large does not want something to happen, yet a company finds a way to get the local/county/state governments to go against the community, that is going against the will of the community.
"When the community at large does not want something to happen, yet a company finds a way to get the local/county/state governments to go against the community, that is going against the will of the community"...
Hmmm sethstorm, on what planet is this supposedly happening?
Remember one small but important detail, we have the government we deserve...
Quote from sethstorm: "When the community at large does not want something to happen, yet a company finds a way to get the local/county/state governments to go against the community, that is going against the will of the community."
This "community" is just a fantasy in your mind. A "community" isn't a person any more than a forest is a tree. If a group of people have a common desire or goal, it's still just a group of individuals.
If a company can get a government to do something a "community" doesn't want, it isn't the company's fault it's done, it's the government's fault, these so called representatives of the "community".
Individuals act in their own self interest. It doesn't matter whether they are part of a "community", a company, or a government. Allowing any of these groups to threaten or coerce others in pursuit of those self interests will only result in oppression, no matter what the philosophical goals.
Then talk to the owners of the more than 600 Michigan businesses that filed for bankruptcy in 2001 and ask them who controlled their destiny?
I believe that you fail to appreciate the amount of damage that governments can do, even when the consumer may be supportive of various businesses. That said, I agree with the overall conclusions reached in this posting.
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