Every purchase is a vote: the daily democracy of the free market

Advocates of government interventionism continuously try to make consumers appear as the victims of large corporations, who are being enslaved by consumerism and predatory advertisement. However, it’s actually consumers who together make the decisions of what is being sold in the first place.

There are elections on every day!

Whenever you go grocery shopping, you engage in large-scale discrimination, because you prefer some products at the expense of others. While “discrimination” might not be the word people use, it happens to be the most devastating of judgements for consumers not to buy a product. We have all seen it: a new flavour of soda, beer, or candy appears with flashy lights in the supermarket, and disappears half a year later due to absence of demand. When this happens, we are used to shrugging our shoulders, and don’t consider it a big loss. Consumers are relentless in their decision-making, and confidently look for the best price and the best quality.

This enables companies to appeal to the consumer, instead of the other way around.

Marketers have used the example of the French cosmetics company L’Oréal for this kind of adaptation to the demands of consumers. In 2011, the company closely monitored the preferences of consumers online, and found increasing interest in a particular hairstyle. As a result, L’Oréal developed a new dye product, and adapted everything from the production to the marketing tactics. They named the product ombre (French word for shadow/shade), which was the key word that had popped up the most in conversations about this hairstyle. The company didn’t produce something that nobody wanted, and then forcefully pushed it down the throats of consumers, but that it investigated the market demand and catered towards it.

By shopping, you engage in an election: only the best products will be selected. Products and services that were unwarranted and not considered useful by consumers become the victims of their own unpopularity.

Can you make people buy something they don’t want?

The short answer to that question is: yes. However, you’d be required to force consumers, either directly or indirectly to make that happen. This is the case of health coverage in many countries, where consumers don’t get a choice and are mandated by the law to purchase insurance, with all the problems that this entails. In a free market, where we’ll presume that your local grocery shop does not have armed guards who force you, at gunpoint, to buy certain products, people buy what they want. This last notion is the one that is the most contested by advocates of government interventionism.

The American legal scholar Cass Sunstein, who was Administrator of the Office of Information and Regulatory Affairs under the Obama administration published an essay entitled “Fifty Shades of Manipulation,” in which he tackles manipulation and consumer sovereignty. In the said essay, Sunstein invokes different forms of manipulation, and despite the effort to differentiate, reaches the following conclusion:

“It is important to acknowledge that in the commercial realm, manipulation is widespread; it is part of the basic enterprise. For that reason, the ethical taboo on manipulation is substantially weakened, in part on the theory that competitive markets impose appropriate constraints against undue harm. But in some cases, those constraints are too weak, and it is appropriate to invoke social norms or even the law to discipline welfare-reducing acts of manipulation.”

The basic flaw in the essay is a misunderstanding between “manipulation” and “marketing”, two words which are not pointing to the same type of strategy. Sunstein seems to believe that all types of advertising mislead consumers about the product, when this is actually a more exceptional case. When Volkswagen manipulated their vehicles in order to show a lower emissions output, they were giving consumers false information about their product. When companies advertise health benefits of their products that cannot be proven, then they are intentionally misleading their customers. However, this is miles away from advertising a product as being cool, refreshing, comfortable, or trendy. Are we to define the mere fact that a product is being described by the producer as “good”, as manipulation? Because by this same standard, I could feel equally manipulated by the fact that Mister Sunstein calls a book he edited himself, “relevant”. Who is he to decide what I find relevant? Will I feel misled if I find the book not to be relevant at all, and consider myself a victim of manipulation?

Most of all, it’s not like consumers are already seeing through common marketing techniques. The $9.99-trick has been around for quite a long time, and even while effective, consumers are aware of what retailers are trying to achieve here. In the same way, consumers know that it’s probably not “the best insurance”, “the smoothest soft drink”, or “the most efficient service” in the literal sense, and that marketers sell their goods the same way online as they would on an old-fashioned market place. And we’re not going after a salesman pitching his “best apples” on a marketplace, are we?

Ultimately, consumers buy what they find useful. The question of people buying things for which they would ultimately find no use, Ludwig von Mises wrote:

“It is a widespread fallacy that skillful advertising can talk the consumers into buying everything that the advertiser wants them to buy. The consumer is, according to this legend, simply defenseless against “high-pressure” advertising. If this were true, success or failure in business would depend on the mode of advertising only. However, nobody believes that any kind of advertising would have succeeded in making the candle makers hold the field against the electric bulb, the horse drivers against the motorcars, the goose quill against the steel pen and later against the fountain pen. But whoever admits this implies that the quality of the commodity advertised is instrumental in bringing about the success of an advertising campaign. Then there is no reason to maintain that advertising is a method of cheating the gullible public.”

Who gets to decide what good choices are?

Let’s assume that those who believe that consumers don’t have free will are correct, and that punitive measures towards predatory marketers are necessary (which is already the case today, with limits on advertising or other types of sales restrictions). Who gets to decide which choices are harmful, and which aren’t? If Whole Foods has manipulated consumers into buying higher quality food and live healthier lifestyles, then we certainly won’t blame them, correct? But do we really know that consumers are happier this way? Couldn’t a different administration decide that it knows that consumers are actually happier when they continuously eat the cheapest food? You’ll soon find that making yourself dependent on the advice of an administrator.

The bottom-line is that yes, consumers make independent choices, and yes, companies do attempt to influence these choices. But so are activists calling upon you to boycott goods, go vegan, avoid high prices or reduce sugar. As consumers, were able to make up our own minds up about the options before us, and while they might ultimately not always be the most sensible, we largely prefer it over the uninformed planning of the state.

This article was first published by Values4Europe.

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About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

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