TCS Daily

The Super Market

By Waldemar Ingdahl - December 2, 2004 12:00 AM

November 27 was "Buy Nothing Day", a day of protest against consumerism, when participants tried to refrain from buying anything. Founded by Canada's AdBusters magazine, it has spread to many parts of Europe.

In Sweden, the governmental consumer agency organized a seminar in Stockholm to mark the occasion. The event brought together the city council, media personalities, environmentalist NGOs, organic farmer organizations, and representatives from the Swedish food retail industry. The topic of discussion was whether Swedish products are better than imported ones. It was soon obvious that most speakers regarded Swedish food products as superior to those of other countries, maybe not always in quality and price- but from an ecological and ethical point of view. Transportation of goods consumes energy and damages the environment, their reasoning went, thus we should only import what we cannot produce ourselves- and steer consumption towards more local goods.

Low-cost chains were often criticized because of their supposed low quality and lack of organic alternatives. Never mind that their whole business model is to be cheap. Prices in Sweden are the highest in the EU, 20 percent above the median (with a VAT of 25 percent on many goods and services), so many low-income consumers appreciate that foreign low-cost chains compete with the old retail monopolies. Low-cost chains were also accused of not guaranteeing that livestock is treated well, as they are claimed to be in organic farming But what is humane and natural in animal husbandry is not a clear-cut issue, as I described in my article "Down on the Farm".

The standards and quality checks necessary for 'eco-friendly' certifications and 'ethical production' increase the costs of business significantly for small- and medium size companies since they cover the whole chain of production with a significant amount of bureaucracy in order to acquire the labels.

Besides, organic food does not sell well even in eco-friendly Sweden; it is too expensive and does not add consumer perceived quality, and is thus most frequently bought by people with high incomes. But of course many of the participants at this meeting called for increased subsidies to organic agriculture, and argued that government provisions should be acquired exclusively with products that are produced according to CSR standards. Third World countries that rely on exports often have a tough time adopting these standards.

European policy seems to aim for something other than low prices, wide choice and easily available information for consumers. A lot of it is the result of special interest groups like unions and corporations demanding pork-barrel spending from the government. It also is a result of the EU's Common Agricultural Policy and the constant demand for new regulatory agencies. For many of the activists it also provides a living. There was a whole Euro Disney of books, cartoons for the children about ecology, organic foods, trinkets and paraphernalia being sold outside of the conference room. For "Buy Nothing Day", there sure was a lot of crass commercialism.

It all comes down to a desire to make consumers conform to one particular vision of what is a "sustainable", "ethical" or "socially responsible" market -- with so many rules and restrictions that it is not a particularly free market.

Markets have many characteristics. They serve and express the individual pursuit of happiness. They spread ideas. They change the ways people live and work, and what is valued. They encourage the constant search for improvements. Markets evolve through trial and error, experimentation and feedback. They are not controlled by anybody, and their results are thus unpredictable. It is the market as an open-ended and decentralized discovery process that attracts the greatest opposition today.

The challenge to markets today is about control as a policy for society as a whole. It is the argument that markets are disruptive, and that they serve too many diverse values rather than "the one best way", a society of stability and full predictability. The role of the government, in this view, is not so much to reallocate wealth or socialize companies, as it is to curb, direct, or end the unpredictable nature of the free market.

Unfortunately, this new brand of controlling policy has not been given much attention by European free market supporters. It is different from the conflicts of a mere decade ago, where the traditional distributional arguments against markets are replaced by calls for "sustainability" and a "steady-state economy".

As Friedrich A. Hayek noted in his book The Road to Serfdom "many kinds of economic planning are indeed practicable only if the planning authority can effectively shut out all extraneous influences; the result of such planning is therefore inevitably the piling-up of restrictions on the movements of men and goods".

Defending global capitalism by pointing out its positive effects for us the consumers is of course crucial. But it should be backed up by questioning the definitions of many of terms the "Buy Nothing" politicians, activists, farmers, academics, and businesspeople use- and contrasting them with definitions that put consumers first.


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