April Freeman Banner 2014

ARTICLE

Consumerism

FEBRUARY 01, 1971 by MAX E. BRUNK

Dr. Brunk is Professor of Marketing at Cornell University. This article is from his talk before the Illinois Agricultural Association at Chicago, November 17, 1970.

In America today people work fewer hours, have more security and real wealth than ever before, and yet we are an unhappy people involved in much social dissent. We are frustrated over poverty, equal rights, changing social mores, campus revolt, pollution, and our environment. It is no longer fashionable to talk or worry about our productive capacity either as a nation or as individuals. Farmers and our business institu­tions are taken for granted. We are not so much concerned with the source of our wealth as we are with its appropriate disposal.

The things we worry about to­day were, of course, problems years ago, but we were too busy, too insecure, too poor to do much about them. Perhaps we should be thankful for the affluence that has made it possible for us to move these "old problems" upward on our scale of priorities. At the same time we should recognize that while affluence provides the means it does not necessarily provide the wisdom for instantly coping with the complex social problems now concerning us.

Affluence has provided an abundance of people who are eco­nomically free to concern them­selves about the affairs of others. Man hours no longer thought to be needed to produce goods and serv­ices are, in no small degree, the source of our social discontent.

Until quite recently, we have been so busy growing in an indus­trial sense, and we have enjoyed the fruits of our labor so much, that we have had little time or resources to devote to those broad social problems created by our rap­idly advancing technology. No small part of this technological advance has been in agriculture. Those persons left in agriculture today are the economic survivors of the greatest mass migration in the history of man. Had there been no out-migration from agriculture over the past 35 years, our present farm population would be 65 mil­lion rather than 10 million. This sudden displacement includes many who have neither the capac­ity nor yen to learn and master a new profession—many who find it disagreeable to work by the clock and calendar. Many of these are the technological dropouts who are in trouble—who are both a burden and responsibility of our modern society—who are a source of discontent in this time of afflu­ence.

One Dropout, One Vote—Formula for Disaster

Numbered among the dropouts and other technological misfits are many of our youth who, supported by affluent parents, have not had to worry much about becoming pro­ductive citizens. Our colleges are crowded with those who have lit­tle or no idea of the professions they ultimately seek to follow. Many, in their bewilderment, seek immediate changes in our social structures amounting to an instant social security designed to per­petuate their dole.

Suddenly we are aware of a large and growing group living on the leavings of a highly pro­ductive society. Earlier societies have had their leisure classes but never before in history has so large a proportion of a society been free of the worries of seek­ing the bare essentials of food, shelter, and clothing. The perplex­ing problem facing us is how to absorb these technological drop­outs and make them productive. For how else are we to combat a national negativism and get on to­ward a happier society?

In the meantime, this growing horde of economic parasites takes on a very serious meaning in a one-member, one-vote democratic society. Still in the minority, their presence is largely manifested in social meddling—in contemplation about the welfare of their fellow man. One such movement we vague­ly call consumerism—a term still too young for the dictionary. This particular movement not only impinges on your rights as a consumer but also is symbolic of present-day social meddling.

Consumerism is a movement of activists who champion issues which appear to be beneficial to consumers. My carefully worded statement that consumerism is a movement of activists who cham­pion issues which appear to be beneficial to consumers is blunt and to the point. It will not make the consumerist happy for it ex­poses the spurious implication that there is, outside the market place, a bona fide movement of consum­ers who join in common cause on their own behalf. Nevertheless, in order to understand the growth, strength, and power of consumer­ism one must realize that it is not a movement of consumers them­selves. The term implies protection of the consumer, but the flood of proposals for ways and means of protecting the consumer are not generally traceable to those seek­ing protection for themselves. To the contrary, the specific issues of consumerism are initiated by those who, for assorted reasons, seek to protect others from harm. It is this third-party involvement in a buyer-seller relationship that gives consumerism its uniqueness. The consumer activist, regardless of motive, is indeed a crusader.

Third-Party Intervention

Time will not permit an explora­tion of all the motives of the con­sumerist. They obviously range from selfish to unselfish, from dis­honest to honest, from thoughtless to well informed. Whatever his motives, the consumer activist con­tends that consumers should be protected from physical and eco­nomic harm, that consumers should be informed and educated in product knowledge, that con­sumers should have a choice in the market place, and finally that con­sumers should have proper legal redress for wrongs. Such virtuous aims seem undebatable until one realizes that under consumerism they are subject to third-party in­terpretation which may or may not be in the consumer interest.

In a normal market relationship, the buyer’s right to accept or re­ject imparts forceful economic meaning to these aims consistent with each individual’s particular set of values. But competitive en­terprise is rejected by the consum­erist who identifies protection in terms of third-party values. And because such values can always be made to appear rational, they are condoned and often vigorously supported by the general public. As a result, innumerable laws, reg­ulations, and coercions are rapidly displacing the free decision of the individual in the market place, and the right of the consumer to choose increasingly becomes a mockery.

Without much doubt, I reveal my personal conviction on consum­erism. I think most of all I resent the hypocrisy of the politics be­hind consumerism—the illusion that someone is doing something for me when in fact he is only doing something, at my expense, to serve his own selfish political in­terests.

I hear business leaders today claiming that consumerism is anti-business—antiproducer—anti-agriculture. They, too, have fallen victim to the hypocrisy of consum­erism. They are mistaken. Con­sumerism is aimed at the con­sumer. Business can adjust and endure under consumerism much better than consumers can. To business, consumerism merely closes the doors to certain oppor­tunities, redirects effort, or alters the competitive advantage one business might have over another. But look what it does to the con­sumer who pays the cost and loses the benefits that a prohibited prod­uct or service could have provided.

I reject the popular contention that the housewife-consumer is ig­norant, stupid, or uninformed merely because her actions are not consistent with either my beliefs or the beliefs of any professional consumerist. In my opinion, con­sumers with dollars in their pock­ets are not weak by any stretch of the imagination. To the contrary, they are the most merciless, mean­est, toughest market disciplinari­ans I know. I reject the thesis that there is any one universal value in marketing that can be made ap­plicable and acceptable to all 200,000,000 American consumers. Any businessman who succeeds in his efforts to capture the favor of the consumer knows this. He knows that the values and needs of differ­ent consumers change with almost every purchasing decision. Surely we need to distinguish between the proper role of government in pro­tecting consumers from deceptive practices and the inappropriate role of serving as intermediary be­tween buyers and sellers in mak­ing value judgments.

The Price We Pay

In our zeal to protect the "inno­cent" consumer, we need recognize that each protective step necessar­ily limits our productive capacity as a nation. It may be argued that a wealthy nation can afford such luxury and, though this is true, we need also to take into account the price we are paying for con­sumerism.

Risk is inherent in every con­sumer purchase—in every con­sumer act—and man can do noth­ing to alter that fact. The efforts of man to eliminate risk in the market place contain much polit­ical appeal but are nonetheless fu­tile because the reduction of one kind of risk must always be ac­companied by a compensating in­crease in another kind of risk. The cost of protection is deprivation. We can, if we desire, achieve a high degree of auto safety by reducing speed; but society rejects the sacrifice and instead, with the safety belt, accepts a lower safety level requiring less sacrifice.

Some of the most protected members of our society are the inmates of our prisons. These un­fortunates know the personal cost of their protection through acute awareness of their deprivations. But the cost of consumer protec­tion is not so apparent. We have no way of putting a value on the sacrifice in foregone products and services that a free market could provide.

Motivated by Power

So far I have identified the con­sumerist only as a kind of self-appointed, omnipotent guardian of the consumer. Who is the consum­erist? Where do his ideas come from? What gives him motive? To some degree I think we are all con­sumerists at one time or another. We all have ideas about how other people should behave or be made to behave. When we get worked up about some issue we may even be­come activists and try to force our opinions on others. However, the most potent and dangerous con­sumerists are found in the ranks of elected public officials, career public workers, authors and writ­ers, college professors, school teachers, preachers—people who have time on their hands to worry about others—people whose status depends on publicity and popular­ity—and perhaps above all, those technological dropouts who have yet to find a place in society.

It is interesting to observe that the consumerist sometimes has as much difficulty convincing the con­sumer of her need for protection as in convincing a regulatory body to do something about it. This is what they call education. But in final analysis the consumerist with the real punch is the elected official who champions laws, the appoint­ed official who establishes regula­tions, or the self-appointed med­dler who needs only to demonstrate, to release a report or make a speech to hit the headlines. I doubt that my congressman is responsible for the eight sets of seat belts that came in my latest car, but I got them and I paid for them. While some congressmen deem it expedi­ent to play on the political oppor­tunities of consumerism, we can be thankful that most of our public representatives, perhaps much bet­ter than the general public, under­stand the shams of consumerism. In a very real sense, these respon­sible representatives often protect the consumer from the consumer­ist.

The Case of Unit Pricing

So far I have dealt in broad gen­eralities. Perhaps a specific illustration may help to expose con­sumerism in its true light. I have heard it said that if strawberries were a manufactured product, they would be restricted from the mar­ket today because so many people are allergic to them! Indeed, the long arm of consumerism will soon reach back to the products of the farm as it already has in its in­tense concern with antibiotics, in­secticides, herbicides, and fertil­izers.

Anyway, my little story has to do with unit pricing and I approach it with no misgivings. From mail I have received, I’ve learned the danger of commenting on any con­sumer issue because someone, some self-appointed consumerist, always stands ready to defend such issues. A few years ago someone had the thought that if all products in the retail store were price-marked in equivalent units of pounds, quarts, square feet, and the like, then the consumer could better identify the best buy. There was an implied as­sumption that the variety of pack­age sizes on the market were a calculated attempt to deceive the consumer.

Gradually the idea began to catch on and more and more people be­gan to accept and champion it. I know of no strong bona fide con­sumer support for the idea but I do know of a lot of passionate pleas made by consumerists who thought the idea had merit, especially for people on a tight budget. Finally, the proposal gathered enough steam to be ordered into effect by the Department of Consumer Af­fairs in New York City. But be­fore it could be invoked, the courts ruled that the Department had no authority to require conformance. The matter currently rests there while steps are being taken to es­tablish the needed authority.

But, as in any fight, charges and countercharges flew wildly. The merchants claimed that the costs of so marking products would be prohibitively expensive—that the net increase in cost would be borne by the consumer. The consumerists claimed that such marking would enable some consumers, and par­ticularly those who needed it most, to save up to 10 per cent on their grocery bill. No one really had any facts, though the idea sounded plausible and workable. This is the typical way consumerist issues arise and generate support, first among those who would like to do something for the consumer, and then among consumers who inno­cently become effective consumer­ists without really knowing it. It also reveals the typical negative reaction of the business commun­ity which serves only to add the fire of certainty to the consumer­ist’s eyes.

Fortunately, this is one idea that could be tested with reasonable pre­ciseness, and one of my colleagues at Cornell, Professor Daniel Pad-berg, undertook to do that in a chain of stores in the Midwest. The most interesting of his con­clusions is that both the costs and benefits were grossly overstated. The costs in the smallest stores ran to over 4 per cent of the sales value but in large supermarkets they amounted to less than a tenth of one per cent of sales. But a check of product movement over time in­dicated no significant shift in pur­chases by the consumer. In two broad food categories the con­sumer actually shifted her trade up to the higher cost per unit item; in the cereal category she shifted to lower-cost packages; and there was no change in the others. Sur­veys of consumers shopping these test stores revealed that awareness of the availability of the informa­tion was greatest among the high-income, well-educated consumers. Despite these findings, the only real facts on the issue available, it is my prediction that the consumer­ist will continue to champion unit pricing, will continue to talk about how it will benefit the poor, and eventually will succeed in getting widespread regulations making unit pricing mandatory.

The issue of unit pricing did not originate from any factual base, and accordingly, facts are not likely to alter the decisions of those who champion its cause. It makes no difference that the theory of unit pricing is based on a false and strictly materialistic premise. It makes no difference that it gives the large merchant a competitive advantage over the small. It makes no difference that the wealthy take greater advantage of the informa­tion than do the poor. Even if the benefits are not very great, it may be argued that the costs are in­significant. At least the consumer doesn’t need a computer when she shops and she gained a notch in her right to be informed. But is the cost really insignificant if we add this to the hundreds of other laws and regulations that have been forced on the consumer with­in the last several years?

The Market Will Handle Whatever Is Essential

Once again I would make it abundantly clear that I neither ad­vocate nor oppose the idea of unit pricing. I am only saying that if indeed it has merit, if truly enough people want it, the compet­itive pressure of the market is suf­ficient to bring it into being with­out the aid of third-party med­dlers. In a democratic society we can, if we desire, force its cost on the public by either legislation or regulations. But no amount of leg­islation or regulation can force its use on an unwilling, uninterested consumer.

In today’s sensitive market, the producer of any product or service needs to keep an eye on both the consumer and the consumerist. The activities of the consumerist are causing the consumer increas­ingly to rationalize her actions in the market place, and this verbal justification is in turn affecting her behavior. Shrewd marketers in the past have always responded more to the actions of Mrs. Con­sumer than to her talk. The litera­ture of market research is full of examples in which the consumer said one thing but did another. When called upon to explain his actions, everyone hopes to sound rational, whether he acted that way or not. Consumerism is creat­ing a self-consciousness in con­sumers and developing a vocal re­sponse based on third-party ra­tionalization that can be grossly misleading to those bearing the responsibility of serving the con­sumer.

Business Is Suspect

In considering the impact of con­sumerism on marketing, any in­dustry should recognize that con­sumerism breeds on suspicion of the motives of business. Some­thing has to be wrong, someone has to be unhappy for consumer­ism to exist. The consumerist sees different-sized packages on the market, not as an attempt to meet the differing requirements of peo­ple, but rather as a deliberate ef­fort to confuse the consumer. In the consumerist’s mind, fractional-ounce contents have nothing to do with efficiency or cost savings but are designed to make comparative pricing difficult! Codes are put on packages to hide vital information from the consumer! Colors and printing are used to deceive! Pack­aging is used to cover faulty merchandise, and advertising is designed to make people act im­pulsively against their better judg­ment! The list is endless, and it always will be, for this is the nature of consumerism. However, I believe this observation tells us that the more business conducts its affairs in the open—lives in a goldfish bowl so to speak—the less it will be subject to the whims of the consumerist.

My little example on unit pric­ing may sound trivial but it is not so considered by the industries in­volved. It’s like the truth-in-lend­ing law. How many consumers do you think wanted this law for their own protection? How many thought it might be a good idea for someone else? How much more do you now know about interest rates and carrying charges than before the law was passed? How many dollars has it saved the consumer? Regardless of how you choose to answer, the truth-in lending law is now safely tucked away on the books where it can be forgotten. The few mills of mar­keting margin that it will perma­nently cost may even be worth the silencing of the consumerist on this issue. I only regret that it has freed the consumerist to dream up some other regulation that might hurt me more.

Consumerism is made up of little issues each affecting either rela­tively few consumers or few busi­nesses. It thrives on the impor­tance of being unimportant. It enlists the passive support of the majority against the vigorous op­position of the few and in this way it grows on our economy like a cancer. There is a common belief that consumerism has grown out of the malpractices of business. This is false, but certain malprac­tices of business have been ef­fectively used by the consumerist to give credence to specific con­sumer issues. The characteristic approach of the professional con­sumerist is to find several flagrant violations of good faith which can be substantiated. These are pock­eted while a broadside charge is made against an industry. When the charges are met with denial, the specific cases are brought forth from the pocket to legitimatize the general charges. The repetition of this time-worn legal trick seems never to be recognized by the little American who believes he is being wronged by big business. The whole idea of the giant-killer has a certain romantic appeal to him.

The President’s Special Assistant for Consumer Affairs

There is one other timely con­cern and that has to do with cur­rent efforts to create one govern­mental agency, office, bureau, or department to serve as spokesman for the consumer. Provision for such an office came out of Senate Committee hearings just prior to the 1970 elections and the House had already acted on a somewhat different version of the same measure.

How effective a spokesman for the consumer such an agency might be is demonstrated by the past activities of the President’s Special Assistant for Consumer Affairs. During its eight-year ges­tation period much effort has been made to gain consumer, business, and labor support for the program. Many talks have been given, press conferences held, and consumer meetings scheduled. Although the office of Special Assistant has car­ried the identity and prestige of the White House and has been served by three different, highly respected and competent ladies, the general public has never really taken the Office seriously. Any mention of the Office will usually bring forth a knowing twinkle of the eye or a sympathetic smile. It should be apparent to the most ardent supporter of the program that bona fide consumer interest has failed to develop. It should be apparent that our responsible pub­lic officials should be doing more important things than writing specifications for panty hose or the size of lettering on a can of sardines.

Apparently, the consumer al­ready knows that any remedial action he deems necessary is most directly accomplished as a result of his actions in the market place. He also knows that the market place respects his actions whether he is in the minority or with the majority. He does not expect to impose his consumption values on his neighbor, any more than he expects his neighbor’s values to be imposed on him.

The Office of Consumer Affairs, in order to demonstrate public concern, claims the receipt of over 40,000 consumer complaints a year. That sounds like a lot of un­happy people, but how significant is it when you consider that it amounts to one complaint per 15 million dollars of consumer expen­diture per year? Anyway, it is my guess that bona fide complaints far, far exceed this number but that they are sent to those who can do something constructive about it—not to places where only punitive action can be anticipated.

Unhappy Consumers Vote "No"

All of us have had unsatisfac­tory experiences with products. Not only have we been misled at some time or other, but many times products have failed to per­form or come up to our expecta­tions. Thinking people must rec­ognize that this is part of the price we pay for being the wealth­iest and most productive nation in the world, part of the price we pay for progress, development, and improvement. We learn by mak­ing mistakes. Every year, thou­sands of new products and services reach the market; and for every new one, thousands are withdrawn—rejected by the consumer. We can, if we desire, avoid these costly and wasteful errors. We can protect the consumer, but do we really want to close the market and forego all improvements in products and services? Do we really want to substitute admin­istrative dictate from Capitol Hill for individual buyer decision?

Regardless of any new agency that might be created to represent the consumer, and regardless of the growth of consumerism, the only true reading of the consumer is to be obtained from her actions in the market place. There can be no true spokesman for the con­sumer other than the actions of the consumer herself. She can ra­tionalize her actions but, try as she might, she cannot explain them in full. That is why she can­not tell you what new or modified goods and services would better serve her needs. In marketing re­search I have spent the better part of my life ringing consumer doorbells in a futile effort to get them to tell me how some product or market service can be improved or what new products or services they want, only to find that in our conversation they failed either to visualize their alternatives or iden­tify the true values to which they in final analysis respond. The con­sumer, in her mute but effective way, can only bring all her value considerations to bear in response to what is offered her. She has her own built-in protective device. If you displease her—if you do not offer her the best alternative—if indeed you deceive her in terms of her own values, she simply and quickly votes "no" in the market place. That is the miracle of the free market—the miracle the con­sumerist refuses to recognize.

 

****

Long Range Consequences

The economic consequences of socialism are fairly obvious, and they have been dealt with at length and compe­tently by a number of economists. Government gets into business and industry in a big way, as a producer itself and as the major consumer for industries tied in with gov­ernment spending. But important as these economic effects are, collectivization has long range consequences of far deeper significance. Political control and direction of eco­nomic life, even under the noblest of auspices, carries with it demands and imperatives which are hard to reconcile with the basic assumptions which lie at the foundation of our culture and our institutions.

BEN MOREELL, The Admiral’s Log

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February 1971

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