The Anatomy of Consumerism; M. E. Brunk

This, in itself, tells us some thing about the nature of con sumer issues. It tells us that Dr. Brunk is Professor of Marketing at Cornell University. This article is from a talk before the Annual ¥eeting of the Cooperative Extension Association of Livingston County, New York, November 15, 1972. 78 there is a wide divergence in our personal economic philosophies. It tells us that the issues of con sumerism are relatively unim portant .in our choice of political representation. But if we are to assume a rational position of ad vocacy or dissent on various issues we need to know much more about the general anatomy of consum sumerism. Traditionally our economy has been built around the market mechanism. In a very real sense the market provides a voting place for the wants and needs of people. The uniqueness of this voting place is t}:lat it respects and re sponds to the will of minorities as well as majorities. And this is fortunate because not all people have the same wants, needs and desires. When we see others .do things we ourselves would not do, 1973 THE ANATOMY OF CONSUMERISM 79 we do not know whether they are being victimized, are expressing a value different from. our"own, or have been deprived of opportuni ties equal to our own. As a result, against this backdrop of a free market, we are gradually building up a set of socially determined restrictions and mandates having universal application to all people.

These are restrictions imposed on people in their role as consumers. And we would not have it other wise for we as a people, in at tempting to find a way of "living together, have decided to forego some of the material wealth pro vided by the free market in the interest of what we call the public welfare. Third.Party Activists On previous occasions, and in no derogatory sense, I have de fined consumerism as a movement of third-party activists who cham pion causes which appear to them to be beneficial to consumers in general. It is not an organized movement of 210 million Ameri cans speaking in common cause on their own behalf. It is a movement of many fragments with issues frequently championed by small minorities. While this is no in dictment, it does raise certain questions about the leadership, how well informed it is, how well it truly represents the general consumer interest. The point I make is that consumerism is made up of a third-party involvement in a buyer-seller relationship.

It is not my function here to argue the case of the free market or how far down the road of socialism we should continue to go. But I do have some personal convictions about consumerism. In many instances the costs far ex ceed the social benefits. I" do not like the negativism of consumer ism - the constant search for scapegoats and things that are wrong. I do not like the sensa tionalism of consumerism which leads society to accept impulsively certain restrictions on our produc ti ve capaci ty. I do not like the emotional verbalism of consumer ism - the "truth" issues, the con sumer "protection" issues, and so on. I resent the hypocrisies of con sumerism: the hypocrisy that someone is doing something on my behalf which in reality serves only to further someone else's selfish political or social interests; the hypocrisy that consumerism is aimed at" the business community when in reality it is only the con sumer who is deprived or who pays the bill. We forget that the business community can operate and prosper under any given set of rules that society imposes on it. In final analysis the question is: how much production do we 80 THE FREEMAN February want out of our business com munity? In fact, within the busi ness community itself many strong advocates can be found for almost any consumer issue simply because each issue serves to en hance the competitive advantage some business may have over another.

Waves 01 Consumerism Consumerism is not a new phe nomenon. We have always had it. But its identity becomes more apparent during certain periods of economic growth. Around 1900 we had the sensationalism of Upton Sinclair. Looking back we can see the transparency of the many fabrications and· fantasies of' this colorful writer. But in his day they were accepted by many unhappy people who felt they were being exploited by big business. For example, Sinclair wrote of packinghouse workers falling into vats of fat and not being fished out "until all but the bones of them had gone out to the world as Durham's Pure Leaf Lard I" Very quickly we had our first Federal Meat Inspection Act and although this legislation was largely an emotional response to journalistic sensationalism I think most of us today would agree that it has served the consumer interest in a constructive way. Anyway, the consumerism of 1900 resulted, as you will recall, in considerable antitrust as well as labor-rights legislation. The teeth of our anti trust laws and the economic power of labor unions can be traced to the consumerism of that time.

Then, consumerism. declined with the build-up of international ten sion that culminated in World War I. Our need for productivity could no longer tolerate the false lux uries of consumerism, the false luxury of responding to every scrap of sensationalism. Toward the end of 1920 we hit another peak in industrial development. Again, displaced· workers became disciples of Stuart Chase and the sensationalist writings of Kallet's and Schlink's 100,000,000 Guinea Pigs. Many New Deal programs had relevance to the' charges set forth by these writers. Then, along came World War II followed by the Korean conflict and we for got about consumerism for a while. Once again it has been brought to life, first through the writings of Vance Packard and then through the activities of Ralph Nader and his many disci ples, who seem to know more about what the consumer needs or should have than do the consumers them selves.

The food industry is a prime target for the consumerist. Not only is food a major item of ex penditure but also it has a direct 1973 THE ANATOMY OF CONSUMERISM 81 bearing on health. Add to this the consideration of the changing na ture of our food composition, nec essitated by a dynamic m,arket structure ever responding to con sumer demands, technological de velopments and population demo graphics, and you have the mak ings of an industry highly vulner able to the issues of consumerism. To Gain Popular Support Taking a. closer clinical look at those consumer issues which have gained widespread public support in recent years, we can perhaps gain some appreciation of the characteristics of such issues and their applicability to our food sup ... ply. First, the social benefits of an issue must be easily rationalized usually by some grossly oversim plified cause and effect relation ship: for example, the directed ra tionale in truth-in-Iending, truth in-packaging, inform,ative labeling and so on. Benefits must be di rected at a major proportion of consumers and the more such bene fits have the appearance of being directed at health or economic wel fare the more viable the issue.

Typical of popular consumer issues is that costs of protection are hidden by dispersion through out a complex production and dis tribution industry; or such costs are easily, though sometimes spuriously, rationalized as falling on large, concentrated or prosper ous industries .. One of the remarkable features of the marketing system, as con trasted with the negativism in volved in many consumer issues, is the way it has broadened choice in serving the specific and diverse needs of an almost endh~ss num ber of consumer groups each hav ing peculiar requirements. We must not make the mistake of as suming a universality of consumer values. Each of us, in terms of his own individual values, tends to ra tionalize what he considers appro priate universal values for others. We have difficulty understanding and respecting values other than our own. The Food Labeling Panic: Does It Serve Consumers?

Looking back over the many consumer protection bills that have passed the Congress in recent years and more importantly the many administrative regulations that have been imposed on the consumers' freedom of choice in the marketplace, one is at a loss to see where some of these actions have served the consumer well. Take for example the current food labeling panic. Depending on particular interests, advocates want foods labeled as. to ingre dients. They want nutrient values indicated, weights, use directions, 82 THE FREEMAN Februa,ry product count and number of serv ings, guarantees and warnings about misuse, prices per unit of content, open code dating, inspec tion stamps, identity of manufac turer, and many oth,er kinds of information. One can set forth very formid able· arguments for the nutritive labeling of food products. And certainly no one with the con sumer interest at heart would argue against the need for a bet ter informed consumer. But is the problem really that simple? Do we really have a set of nutritive values universally applicable to all people? We have many sets of min imum daily requirements, but are they true values? Do people know how to use them? Do all persons have the same needs? Then there is the whole question of the avail ability of nutrients depending on the way food is prepared and used.

Would such labeling lead to a false confidence by consumers that cer tain needs were' being met? In what terms should the require ments be stated? What would be the cost of conforming to such labeling requirements and how many new bureaucrats would it re quire to police the program? Would consumers take such label ing into consideration in their buying decisions? How much di gestible information can be pro vided on a label? And there are many other questions one could raise. ~eep in mind, I am neither advocating nor condemning nutri tive labeling. I raise these ques tions only to illustrate the kind of considerations which we have all too often negJected in 'establishing many of our regulations on the consumer. Open Dating of Foods For a moment along this line we might take a brief look at the propo~ed consumer protection leg islation that would require the open dating of food products. If . the manufacturer puts a bunch of funny numbers on a package to tell them when a product was made, why shouldn't the consumer be entitled to know what all this means? With some products this may be appropriate; but the false inference really lies in the fact that the date code is not used by the manufacturer nearly so much as a time code as for lot identifi cation. The suitability of a product for consumption depends far more on storage and handling condi tions than on time. I'd much rather eat hot dogs kept under proper refrigeration for 30 days than those only 3 days old but not refrigerated. Require an open date on them and what would be the added cost of store stock rotation and returned merchandise which is perfectly suitable for consump1973 THE ANATOMY OF CONSUMERISM 83 tion? And who do you think would pay that cost?

Are No Risks Worth Taking? Permit me to comment on one other example. The Congress re cently passed a law prohibiting the use of DES (Diethylstilbes trol) in animal feeds. Headlines reporting this issue could have read: "Congress votes to outlaw use of dangerous' drug" or "Con gress votes to increase annual beef cost $3.50 per capita and to make it a little tougher." Both head lines would be appropriate. In brief, these simple facts led to the action: First, direct dosages of DES to maternity cases in France were found to have caused cancer. Secondly, traces of DES were re cently found in the livers of sev eral animals. Consequently, the extremely remote risk that the use of DES in livestock feed might cause cancer was traded off against lowering the quality of beef and raising its price to the consumer. In testimony, the Food and Drug Administrator took the position that prohibiting the use of this feed additive will cause more fatalities through malnutri tion than would result from the controlled use of DES.

I used these two examples of consumer protection because they seem to illustrate two distinct yet general types of measures. One prohibits a practice or service while the other creates a practice or service to which it is hoped consumers will respond. Seat belts, nutritive labeling, unit pricing are all added services prescribed un der the guise of consumer protec tion. In this type of protection the cost is imposed on the consumer by law but the use by the con sumer remains optional. On the other hand, prohibited practices are made mandatory on the con sumer and the costs of the protec tion lie in the vague area of de privation. As more and more regu lations are imposed on the con sumer, we need increasingly to recognize this distinction in mak ing our individual judgments on each new issue. Gradually Overwhelmed Perhaps you do not feel strong ly about any of the specific issues I have discussed here. The costs and benefits of any particular con sumer issue are not great; and that is the nature of consumer issues - the importance of being unimportant. It is somewhat like the gradual encroachment of taxes.

We passively accept each incre ment until suddenly we find our selves overburdened. Increasingly, I think we must recognize that consumer protec tion does not come free - that it must be paid for by the consumer 84 THE FREEMAN Februa,ry either in terms of added costs or through suffering the consequences of deprivation. If we accept the idea that the consumer is to be fully protected in all his actions, he must by definition become nothing more than the ward, or prisoner if you will, of the State. Personally, I cherish the oppor tunityof making a mistake be cause I know with it I have econ omic and social freedom. With all its shortcomings, I like capital ism; and I resent all socialistic measures limiting my freedom. It has been ten years since President Kennedy enunciated the now famous Consumer Bill of Rights: 1) the right to safety, 2) the right to be informed, 3) the right to choose, and 4) the right How To Be Cheated to be heard. These are rights with which we would not disagree. The question is really one of what we do in the name' of these rights, for these are the rights only of a truly free society. What President Kennedy did not say, and which is more to the point, is that the right to ,safety is appropriate only in the exercise of reasonable and prudent judgment by the con sumer. The right to be informed carries with ·it the responsibility of becoming better educated. The right to choose carries with it the opportunity of making the kind of choice which consumer protection ism prohibits. And the right to be heard carries with it a respect for the differing desires and wants of one's fellow men. ~ IDEAS ON LIBERTY THE same guards which protect us from disaster, defect and enmity, defend us, if we will, from selfishness and fraud. Bolts and bars are not the best of our institutions, nor is shrewdness in trade a mark of wisdom. Men suffer all their life long under the foolish superstition that they can be cheated. But it is as impossible for a manto be cheated by anyone but himself, as for a thing to be and not to be at the same time.

RALPH WALDO EMERSON, Compensation CLARENCE B. CARSON THE FOUNDING OF THE AMERICAN REPUBLIC 19 Establishing the Government "GREAT OAKS from tiny acorns grow," run the words of an old saying. They seem particularly ap propriate to the United States government, as we look back on its small, uncertain, and precari 0us beginnings from the twentieth century when the lineal descend ant of that government has grown to immense proportions. It is dif ficult for us who are used to this Leviathan with its symmetry, sta bility, and massiveness even to imagine the frail beginnings and the contingency of its existence. The government, which has long since proceeded on the momentum of an established institution, once had to be made to go by conscious and concentrated effort; and a little of that story needs to be told. The first Congress was so slow in assembling that there was some reason to doubt whether the gov ernment might even get underway.