On Consumer Choice

It is often said that one of the great merits of capitalism is that it allows retailers to respond to consumer desires, so that when a consumer wants, for example, shoes, a retailer is there to sell her said shoes, and a nice little exchange happens and everyone’s a winner. Furthermore, if the consumer is displeased with the service she receives (poor quality shoes, for example), she is free to “take her business elsewhere”, as the saying goes.

However, things are not this simple in the real world.

Let’s start from the beginning. The goal of a business in capitalism is maximization of profit, plain and simple. Selling things for which there is a high demand seems like the easiest way to achieve this goal. Not only is profit maximized, but consumer needs/desires are fulfilled. Again, everyone’s a winner. Unfortunately, when the business’s primary goal is to make profit for itself, the most obvious implication is that we can expect lies and deceitful tactics to be employed in order to sell products. A quick look into present-day advertisement shows this to be the case. Look at Monsanto, for example. They are unloading literally billions of dollars into lobbying against bills that would require its food products to carry labeling when–as is overwhelmingly the case–they contain GMOs. Why is this a problem? Well, what the consumer wants is healthful food. What Monsanto wants is profit. And if using GMOs is cheaper, then from the standpoint of capitalism, the obvious choice for the corporation is to continue using GMOs, regardless of the health risk to its consumers, and, as much as possible, to prevent the consumers from even finding out about these health risks so that they continue to buy the product!

Some will object that it is better business to not deceive one’s consumers, as upon finding out, they will “take their business elsewhere” and you will lose your profit. But again, look at Monsanto–or, better yet, Wal-Mart. Wal-Mart sells food and clothing (among other things) at very low prices, so that low-income people can buy them. However, it is no secret that much (if not all) of Wal-Mart’s clothing is produced by slave labor in countries such as Vietnam, Bangladesh, and China. Is that what consumers want? Presumably not. Why do so many people still shop there? Because it’s the only place they can afford! Do you really expect consumers to boycott the only place at which they can afford to shop, even if they know that its products aren’t healthful or are produced in morally outrageous working conditions? Of course not!

And besides that, capitalism is necessarily short-sighted. What is important is not the perceived long-term effects of the product being sold (whether on the consumer, the environment, or one’s grandchildren), but the short-term effect of ensuring profit for the next quarter. One might say that in theory this is not how capitalism is supposed to work, but in practice it very obviously is exactly how capitalism works.

Maximizing profit and meeting consumer needs–truly meeting consumer needs–simply do not go hand in hand. Next time you’re in an outlet store (or any kind of store for that matter), think about whether all of the manipulative and deceitful methods that are used in attempts to convince you to purchase expensive, superfluous things (that are often unhealthy, environmentally destructive, and produced by slaves, to boot) truly reflects a system that is as free and mutually beneficial as free market advocates say it is.

[As an aside, I have known people in commission-based sales careers who often truly seek the customer’s best interest, and consequently–and I think this is telling–often end up losing money by doing so. I think it’s great when this happens, but it’s not so good from the capitalist point of view wherein, quite simply, profit maximization takes precedence over everything–including the best interest of the customer. It is worth noting that markets do not necessarily equal capitalism. For example, mutualism, the form of anarchism advocated by the first political philosopher to call himself an anarchist, Pierre-Joseph Proudhon, is a type of anti-capitalist market anarchism.]

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