I suppose, many people from the west would say that we live in the wonderful times because we are freer than ever, democratic values are fostered in many countries, people have freedom of speech, freedom of religion, freedom of choice… wait… choice? Let’s talk about it.

The choice is one of the core democratic values. It describes an individual’s opportunity and independence to make a decision unconstrained by external factors (Bavetta and Navarra, 2011). However, with the help of neoliberal thinkers, corporations’ activities undermine it.

The issue goes around the market economy. The basic understanding was that the market economy has to be competitive in order to maximize the variety of products, thus widening the spectrum of choice of the consumers which make consumers happier. To make it work, it was necessary that market would be open that smaller firms could compete with each other. Although, antitrust law was developed in the 20th century in order to set the limits to corporations that they wouldn’t dominate the market and thus protect smaller market shareholders,  the new theory of economics emerged which still prevails. Neoliberalism let corporations to monopolize the market and take over the smaller firms which in turns led to disturbance of the competition and thus the narrower spectrum of choice (Crouch, 2011).

The shift from competitive market economy to the market economy dominated by large corporations has caused a change of attitudes towards consumer choice. Neoliberal theorists argue that the market should work not for the wider choice but rather for more efficiency (Crouch, 2011). Therefore, Consumer choice became less important and instead of it, consumer welfare has been taken into account. As Crouch (2011) explains, both are crucially different: to prefer consumer choice means to leave decisions to consumer themselves which is a democratic concept, whereas consumer welfare is technocratic one, which means to let judges and economists decide what is good. Therefore, the problem is that the market is not working in a democratic way undermining the freedom of choice. As Hayek (1944) pointed out: “Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his mercy“(Hayek, 1994, p. 69). Another problem which is even worse is that our sacrifices of choice do not necessary bring us any good. As Crouch (2011) illustrates, “if having inadequate information makes customers more likely to purchase a product, there will be an increase in profits, therefore in overall wealth, and therefore in consumers welfare itself” (Courch, 2012, p. 56). Hence, the issue is that consumers are destined to choose not the best option.

Furthermore, large corporations distort people’s choice. According to Crouch (2011), large corporations are not fully subjected by consumers’ sovereignty and in fact, it can be opposite – consumers can be subjected by corporations. It can happen by the creation of demand by corporations as their enormous share of the market enables them to affect consumers in various ways. As Crouch (2012) argues, large corporations have an ability to shape market and consumers desires by marketing and advertising superiority. For example, one of the most obvious cases is McDonalds. One of their main targets is children. They attract the most vulnerable through television, activities in school and happy meals (Morran, 2015), thus creating artificial demand for their production and distorting people’s choice.

All in all, nowadays we can see plenty of examples of giant corporations dominating in the market which are to be blamed that they control our perceptions and desires by advertising and marketing which mean that we don’t really have a choice in many cases. However, corporations are not bad. Policy makers are! Because they let this to happen by implementing market policies which contradicts the core principles of healthy capitalism and democracy.

 

Renatas Makarovas

References:

Crouch, C. (2011) The Strange Non-Death of Neoliberalism. Cambridge: Polity press. p. 49-62

Hayek, F. A. (1944) The Road to Serfdom. London: Routledge, 1944. p. 69

Bavetta and Navarra (2011) Economic Freedom and the Pursuit of Happiness. p. 65. Available online: http://thf_media.s3.amazonaws.com/index/pdf/2011/Index2011_Chapter5.pdf [Accessed: 2015-11-21]

Morran, C. (2015) How McDonald’s Markets To Kids Through Moms and Teachers. Available online: http://consumerist.com/2015/03/20/how-mcdonalds-markets-to-kids-through-moms-teachers/ [Accessed: 2015-11-21]

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