2 CONSUMER CHOICE: RHETORIC AND REALITY The figure of the consumer occupies a prominent place in contemporary social life, economic analysis, and political rhetoric. Within economic analysis consumption has long been presented as the end or point of pro- duction and the interest of the consumer promoted as taking precedence over that of the producer (Smith 1976[1776]). As J.K. Galbraith noted, within ‘virtually all economic analysis and instruction, the initiative is assumed to lie with the consumer’ (1969: 216). The growth in productive capacity that accompanied the development of industrial capitalist econo- mies in the late nineteenth century and through the twentieth century led to understandable concern being expressed about the need to gen- erate effective consumer demand for the rapidly increasing range and volume of goods and services becoming available. As productive capac- ity increased and consumer culture grew in intensity and reach, within economic analysis and political rhetoric, increasing reference began to be made to the importance of the consumer being able to exercise choice and pursue his or her interest in and through the market. ECONOMIC AN A LYSIS A ND TH E SOV E R E IGN CONSUM E R SUBJ E C T In some formulations within economics the consumer has been repre- sented as ‘sovereign’. The notion of consumer ‘sovereignty’, drawn from the political realm, was employed initially within neo-classical economics but returned to prominence late in the twentieth century in neo-liberal CONSUMER CHOICE: RHETORIC AND REALITY 31 economic and political thought when renewed emphasis was placed on the importance of adhering to free market principles and keeping state intervention to a minimum (Harvey, 2005: 20–2). The concept, origi- nally introduced in the 1930s by William Hutt, attributed a dominant economic role to the consumer and served to legitimate the idea of the ‘free market’, within which unimpaired choice could be exercised by ‘sovereign’ consumers. Within economics it has continued to be assumed that ‘power lies with the consumer’, that there is a ‘unidirectional flow of instruction from consumer to market to producer’, indeed it has been suggested that in the market economy there is ‘always a presumption of consumer sovereignty’ (Galbraith, 1969: 216). Alongside the idea of consumer sovereignty, two related notions, of ‘consumer choice’ and ‘consumer confidence’, have increasingly become the focus of social and political comment and economic analysis. Lending further weight to the significance that has been accorded to consumption and the figure of the consumer, in the closing decade of the century within sociologi- cal discourse it was being argued that identity, status, and social inclu- sion were increasingly bound up with participation in consumer activity rather than involvement in production, occupation, or work, and that in our ‘society of individualized consumers’ freedom was increasingly ‘grounded in consumer choice’ (Bauman, 1998, 2000: 82–4). Consumer choice is now regarded as an unquestionable virtue, an indis- putably beneficial product of the market economy, and an exemplification of the freedom that is considered to be a corollary of modern capitalism (Friedman, 1982). Although the origin of the term is generally attributed to William Hutt’s 1936 book Economists and the Public: A Study of Competition and Opinion (Hutt, 1940; Persky, 1993), it is in the work of the ‘neo-Austrian school’ economist, Ludwig von Mises (1881–1973), that the notion of consumer sovereignty receives its most explicit formulation. Mises was cat- egorical about the economic significance of consumers: it was not entre- preneurs or producers who ultimately determined the course of economic affairs but consumers. As he remarked in characteristic fashion: Neither the entrepreneurs nor the farmers nor the capitalists deter- mine what has to be produced. The consumers do that … The con- sumers patronize those shops in which they can buy what they want at the cheapest price. Their buying and their abstention from buying decide who should own and run the plants and the farms. They make poor people rich and rich people poor. They determine precisely what should be produced, in what quality, and in what quantities … The consumer is in a position to give free rein to his caprices and fancies. The entrepreneurs, capitalists, and farmers have their hands tied; they are bound to comply in their opera- tions with the orders of the buying public. (1996[1949]: 270–1) 32 CONSUMER SOCIETY From this neo-classical standpoint it is the interests expressed, influences exerted, and wishes articulated by consumers that predominate in the market, it is they who ‘determine the direction of all production processes and the details of the organization of all business activities’ (1996[1949]: 270–1). For Mises entrepreneurs and owners of the means of production are ‘virtually … trustees of the consumers’, they do not rule consumers or have power over them, but to the contrary serve them (1996: 273). Producers are portrayed as dependent on the ‘supremacy of consumers’, as needing to comply with ‘the wants of the consumers’ and accommodate to ‘the sovereignty of the consumers’ (1996: 287). In direct contrast to the view of economic life that presents producers, entrepreneurs, and the owners of property as in possession of economic or market power Mises comments: All market phenomena are ultimately determined by the choices of the consumers. If one wants to apply the notion of power to phe- nomena of the market, one ought to say: in the market all power is vested in the consumers … Ownership of material factors of production as well as entrepreneurial or technological skill do not – in the market economy – bestow power in the coercive sense. All they grant is the privilege to serve the real masters of the market, the consumers, in a more exalted position than other people. Ownership of capital is a mandate entrusted to the own- ers, under the condition that it should be employed for the best possible satisfaction of the consumers. (1996: 648, emphasis added) While Mises did briefly acknowledge that ‘an infringement of the supremacy of … consumers’ might arise from ‘monopoly prices’ (1996: 358), ultimately he regarded this as an empirically rare eventuality and he was far more concerned about what he saw as the negative impact on consumers of growing government interference in the market economy. The notion of consumer sovereignty outlined is controversial on at least two counts. To begin with it suggests that consumers, through the exercise of choice, possess a power and influence to coerce in the mar- ketplace that is comparable to the power possessed and exercised by sovereign political agents within the polity. This comparison is at the very least overstated and ultimately hard to sustain, as Murray Rothbard acknowledges in the course of a lengthy endorsement of the market and the significant part played by consumers: The term ‘consumers’ sovereignty’ is a typical example of the abuse, in economics, of a term … appropriate only to the political realm and is thus an illustration of the dangers of the application of CONSUMER CHOICE: RHETORIC AND REALITY 33 metaphors taken from other disciplines. ‘Sovereignty’ is the quality of ultimate political power; it is the power resting on the use of vio- lence. In a purely free society, each individual is sovereign over his own person and property, and it is therefore this self-sovereignty which obtains on the free market. No one is ‘sovereign’ over any- one else’s actions or exchanges. Since the consumers do not have the power to coerce producers into various occupations and work, the former are not ‘sovereign’ over the latter. (2001: 561, emphasis in original). In addition to sovereignty being an inappropriate metaphor there is a more significant substantive objection to the influence attributed to consumers. While consumers routinely do exercise choice and decisions to buy or not to buy particular goods and services undoubtedly have sig- nificant implications for producers and commercial enterprises, choices made by consumers are in respect of given ranges of goods and services produced within economic circumstances and market conditions and subject to cultural processes and influences which consumers have not chosen. As a critic of nineteenth-century economic liberalism noted of the structural constraints on human agency, people make history, but ‘they do not make it just as they please; they do not make it under self- selected circumstances chosen by themselves, but under circumstances, existing already’ (Marx, 1963 [1852]: 15). What is produced does not derive from consumers’ needs rather consumers are drawn into a ‘circle of manipulation’ (Adorno and Horkheimer, 1997: 121) in which prod- ucts are ‘tailored for consumption … and … to a great extent determine the nature of consumption’ (Adorno, 1991: 85). Consumers do exercise choice and make decisions about purchasing goods and services, but do so subject to a variety of influences, including manufacturing, retailing, and marketing strategies, as well as fair trade and environmental cam- paigns, and not under conditions of their own choosing (Gabriel and Lang, 2006). As Adorno remarked in a series of critical reflections on consumer culture, ‘[t]he customer is not king, as the culture industry would have us believe, not its subject, but its object’ (1991: 85). Today’s consumers encounter a consumer culture that is highly indi- vidualistic, very materialistic, and continually subject to transformation through the perpetual generation of new fashions and styles and the relentless development of new product lines and services, which are enticingly promoted through increasingly innovative advertising, mar- keting, and branding campaigns, frequently fronted by celebrities from the iconic worlds of entertainment and sport. It is a highly stratified con- sumer culture, one that is differentiated according to inequitably distrib- uted access to a variety of essential resources, including not only income, wealth, and credit, but also information about consumer products, their 34 CONSUMER SOCIETY potential benefits, and attendant risks.