Consumerism - the BIG lie!

It is a popular and well accepted thing these days to serve a special interest group - even if you are a politician elected to serve the entire public - as long as that special interest group is the almighty consumer. Why, in 1989, to be a consumer advocate is almost as American as pledging allegiance to the flag. At some time in our country's recent history, the label has become so important to politicians and would-be politicians that it is impossible to find one who won't quickly claim the distinction. Just try it sometime.

The stampede to be the biggest consumer advocate has been so great, that even well meaning business folk claim the silly title. You see it all the time in advertisements, public addresses and written pronouncements: "Our company has no self-interest - we live only to serve the consumer," their message shouts.

Of course, it is all part of THE BIG LIE of consumerism - made up of a number of small parts that deserve careful scrutiny. Let's call them the little lies that make up the big lie:

Little Lie #1: Buyers are more sacred than sellers.

Think about that. If a business person earns a dollar so that he can feed his family it has a certain value. However, if his customer spends or saves a dollar dealing with his business, the value of that dollar grows to enormous proportions in the mind and rhetoric of the consumer advocates. It's a lie. Both dollars have equal value. Buyers are no more important to society than sellers.

Little Lie #2: It's always a good thing to support consumers against business.

It's simply not true. Is it always good to support Republicans against Democrats? Men against women? Whites against blacks? Cattle ranchers against sheep herders? Of course not. Yet consumerism discards any balanced approach to day-to-day conflicts arising in our economic system by simply proclaiming that buyer is good; seller is bad. We have elevated the blessed consumer to almost godlike proportions; the consumer can do no wrong and business should bow prostate before him.

Little Lie #3: Politicians and regulators should always be consumer advocates.

Really? Weren't they elected/appointed to serve the public? Aren't sellers and producers and business people members of the public? Business people vote and pay taxes, don't they? Doesn't business deserve a balanced approach - an objective mediation of situations involving consumers vs. business? You bet your life they do. It is flat wrong for a politician/regulator to take sides at the onset by proclaiming himself a consumer advocate. Public advocate yes; consumer advocate no!

Little Lie #4: Consumers exist in a vacuum.

The truth is all sellers and producers and business people are also consumers while almost all consumers have ties to the seller/producer side of the economy. If you're one of those consumer activists that believes you are benefiting some pure consumer by beating up on pure business, you are deluding yourself. Take the California consumer activist's rate rollback on auto insurance, for example. If the California Supreme Court upholds Proposition 103's mandatory rate rollback, a move that will certainly be financially devastating to a number of carriers - will it be a pure good thing to the California consumer?

While it may be oh-so wonderful to the nonexistent pure consumer, it may not be so terrific to the tens of thousands of real consumers who may have a major portion of their pension fund (or their child's college education, or whatever) invested in insurance company equities. Or the real consumer who owns a little print shop that relies heavily on XYZ Insurance Company's orders - just before they pull out of the state. Or the real consumer whose family income is subsidized by a spouse working for ABC Insurance Company - just before the big layoffs. Or the real consumer who is now supplying the once healthy and prosperous insurance industry with any one of a thousand support services - perhaps no longer necessary or affordable. In America's heavily integrated economy, beating up on big business is about as smart as whacking one's self in the head with a club.

Little Lie #5: The American Free Enterprise System requires consumer advocates in order to function properly.

Hogwash. The American Free Enterprise System requires advocates of the American Free Enterprise System. Consumer advocates, squalling and squawking for more and more government intervention in the economy are really advocates of a different system. Guess which one.  A true advocate of our system appreciates the intelligence of a balanced advocacy. Certainly there will be times when a lawmaker or a regulator will be forced to take the side of either a buyer or a seller. But to announce one's allegiance before the issues even hit the table either speaks of a basic dishonesty or a basic misunderstanding of the dynamics of our great system.

Little Lie #6: If you don't like the way the open market has evolved, you can just pass a law to change it.

Now there'ss a nasty little lie. But if it were not, life would be so simple. Why we could just pass a law tomorrow that all cars would cost $5,000. All homes would cost $25,000. Interest rates would be cut to 2%. And, of course, auto insurance would only cost $25.00 a year for everyone. We could just fix all those greedy old companies that thought they were going to make a profit on us, wouldn't we?

Now stop day dreaming. There is no Santa Claus. Car manufacturers are not going to operate at a loss. Home builders are not going to work free. And the stockholders of auto insurance companies are not making philanthropic donations to humanity when they invest.

Little Lie #7: The best thing for a consumer is to eliminate (or reduce to a pittance), the profits of business.

After all, that is money saved by the almighty consumer, right? Wrong. Dead wrong. It is only the profit or potential for profit that motivated the seller to take a risk and bring his product or service to market in the first place. It is only the profit or potential for profit that motivates one seller of goods or services to offer more for less to the consumer. It is only the profit or potential for profit that motivates investors to risk their funds in business when they could earn 9% or 10% risk free in government insured CD's. Without profit or the potential for profit, nothing happens!

The truth: The best thing you can do for the consumer is often the best thing you can do for business.

When you stimulate business, you increase competition. When you increase competition, you increase consumer choices; you increase innovation; you increase efficiency; you decrease prices. While this may all be Economics 101 to you, to an ever increasing legion of consumer advocates, it is apparently incomprehensible.

Let's get angry at public servants (you notice they were not elected as consumer servants), who blatantly presume to represent a special interest group over the interests of the rest of us. And when you hear one of those pointy-headed consumer activists telling THE BIG LIE that pro-consumer means anti-business, don't let 'em get away with it!

  Email the  author:  ron.manera@litespeed.net