PDF version of Section B.
B.5 Is capitalism empowering and based on human action?
A key element of the social vision propounded by capitalism, particularly “libertarian” capitalism, is that of “voting” by the “customer,” which is compared to political voting by the “citizen.” According to Milton Friedman, “when you vote in the supermarket, you get precisely what you voted for and so does everyone else.” Such “voting” with one’s pocket is then claimed to be an example of the wonderful “freedom” people enjoy under capitalism (as opposed to “socialism,” always equated by right-wingers with state socialism, which will be discussed in section H). However, in evaluating this claim, the difference between customers and citizens is critical.
The customer chooses between products on the shelf that have been designed and built by others for the purpose of profit. The consumer is the end-user, essentially a spectator rather than an actor, merely choosing between options created elsewhere by others. Market decision making is therefore fundamentally passive and reactionary, i.e. based on reacting to developments initiated by others. In contrast, the “citizen” is actively involved, at least ideally, in all stages of the decision making process, either directly or through elected delegates. Therefore, given decentralised and participatory-democratic organisations, decision making by citizens can be pro-active, based on human action in which one takes the initiative and sets the agenda oneself. Indeed, most supporters of the “citizen” model support it precisely because it actively involves individuals in participating in social decision making, so creating an educational aspect to the process and developing the abilities and powers of those involved.
In addition, the power of the consumer is not evenly distributed across society. Thus the expression “voting” when used in a market context expresses a radically different idea than the one usually associated with it. In political voting everyone gets one vote, in the market it is one vote per dollar. What sort of “democracy” is it that gives one person more votes than tens of thousands of others combined?
Therefore the “consumer” idea fails to take into account the differences in power that exist on the market as well as assigning an essentially passive role to the individual. At best they can act on the market as isolated individuals through their purchasing power. However, such a position is part of the problem for, as E.F. Schumacher argues, the “buyer is essentially a bargain hunter; he is not concerned with the origin of the goods or the conditions under which they have been produced. His sole concern is to obtain the best value for money.” He goes on to note that the market “therefore respects only the surface of society and its significance relates to the momentary situation as it exists there and then. There is no probing into the depths of things, into the natural or social facts that lie behind them.” [Small is Beautiful, p. 29]
Indeed, the “customer” model actually works against any attempt to “probe” the facts of things. Firstly, consumers rarely know the significance or implications of the goods they are offered because the price mechanism withholds such information from them. Secondly, because the atomistic nature of the market makes discussion about the “why” and “how” of production difficult — we get to choose between various “whats”. Instead of critically evaluating the pros and cons of certain economic practices, all we are offered is the option of choosing between things already produced. We can only re-act when the damage is already done by picking the option which does least damage (often we do not have even that choice). And to discover a given products social and ecological impact we have to take a pro-active role by joining groups which provide this sort of information (information which, while essential for a rational decision, the market does not and cannot provide).
Moreover, the “consumer” model fails to recognise that the decisions we make on the market to satisfy our “wants” are determined by social and market forces. What we are capable of wanting is relative to the forms of social organisation we live in. For example, people choose to buy cars because General Motors bought up and destroyed the tram network in the 1930s and people buy “fast food” because they have no time to cook because of increasing working hours. This means that our decisions within the market are often restricted by economic pressures. For example, the market forces firms, on pain of bankruptcy, to do whatever possible to be cost-effective. Firms that pollute, have bad working conditions and so on often gain competitive advantage in so doing and other firms either have to follow suit or go out of business. A “race to the bottom” ensures, with individuals making “decisions of desperation” just to survive. Individual commitments to certain values, in other words, may become irrelevant simply because the countervailing economic pressures are simply too intense (little wonder Robert Owen argued that the profit motive was “a principle entirely unfavourable to individual and public happiness”).
And, of course, the market also does not, and cannot, come up with goods that we do not want in our capacity as consumers but desire to protect for future generations or because of ecological reasons. By making the protection of the planet, eco-systems and other such “goods” dependent on the market, capitalism ensures that unless we put our money where our mouth is we can have no say in the protection of such goods as eco-systems, historical sites, and so on. The need to protect such “resources” in the long term is ignored in favour of short-termism — indeed, if we do not “consume” such products today they will not be there tomorrow. Placed within a society that the vast majority of people often face difficulties making ends meet, this means that capitalism can never provide us with goods which we would like to see available as people (either for others or for future generations or just to protect the planet) but cannot afford or desire as consumers.
It is clearly a sign of the increasing dominance of capitalist ideology that the “customer” model is being transferred to the political arena. This reflects the fact that the increasing scale of political institutions has reinforced the tendency noted earlier for voters to become passive spectators, placing their “support” behind one or another “product” (i.e. party or leader). As Murray Bookchin comments, “educated, knowledgeable citizens become reduced to mere taxpayers who exchange money for ‘services.'” [Remaking Society, p. 71] In practice, due to state centralism, this turns the political process into an extension of the market, with “citizens” being reduced to “consumers.” Or, in Erich Fromm’s apt analysis, “The functioning of the political machinery in a democratic country is not essentially different from the procedure on the commodity market. The political parties are not too different from big commercial enterprises, and the professional politicians try to sell their wares to the public.” [The Sane Society, pp. 186-187]
But does it matter? Friedman suggests that being a customer is better than being a citizen as you get “precisely” what you, and everyone else, wants.
The key questions here are whether people always get what they want when they shop. Do consumers who buy bleached newsprint and toilet paper really want tons of dioxins and other organochlorides in rivers, lakes and coastal waters? Do customers who buy cars really want traffic jams, air pollution, motorways carving up the landscape and the greenhouse effect? And what of those who do not buy these things? They are also affected by the decisions of others. The notion that only the consumer is affected by his or her decision is nonsense — as is the childish desire to get “precisely” what you want, regardless of the social impact.
Perhaps Friedman could claim that when we consume we also approve of its impact. But when we “vote” on the market we cannot say that we approved of the resulting pollution (or distribution of income or power) because that was not a choice on offer. Such changes are pre-defined or an aggregate outcome and can only be chosen by a collective decision. In this way we can modify outcomes we could bring about individually but which harm us collectively. And unlike the market, in politics we can change our minds and revert back to a former state, undoing the mistakes made. No such option is available on the market.
So Friedman’s claims that in elections “you end up with something different from what you voted for” is equally applicable to the market place.
These considerations indicate that the “consumer” model of human action is somewhat limited (to say the least!). Instead we need to recognise the importance of the “citizen” model, which we should point out includes the “consumer” model within it. Taking part as an active member of the community does not imply that we stop making individual consumption choices between those available, all it does is potentially enrich our available options by removing lousy choices (such as ecology or profit, cheap goods or labour rights, family or career).
In addition we must stress its role in developing those who practice the “citizen” model and how it can enrich our social and personal life. Being active within participatory institutions fosters and develops an active, “public-spirited” type of character. Citizens, because they are making collective decisions have to weight other interests as well as their own and so consider the impact on themselves, others, society and the environment of possible decisions. It is, by its very nature, an educative process by which all benefit by developing their critical abilities and expanding their definition of self-interest to take into account themselves as part of a society and eco-system as well as as an individual. The “consumer” model, with its passive and exclusively private/money orientation develops few of people’s faculties and narrows their self-interest to such a degree that their “rational” actions can actually (indirectly) harm them.
As Noam Chomsky argues, it is “now widely realised that the economists ‘externalities’ can no longer be consigned to footnotes. No one who gives a moment’s thought to the problems of contemporary society can fail to be aware of the social costs of consumption and production, the progressive destruction of the environment, the utter irrationality of the utilisation of contemporary technology, the inability of a system based on profit or growth maximisation to deal with needs that can only be expressed collectively, and the enormous bias this system imposes towards maximisation of commodities for personal use in place of the general improvement of the quality of life.” [Radical Priorities, pp. 190-1]
The “citizen” model takes on board the fact that the sum of rational individual decisions may not yield a rational collective outcome (which, we must add, harms the individuals involved and so works against their self-interest). Social standards, created and enriched by a process of discussion and dialogue can be effective in realms where the atomised “consumer” model is essentially powerless to achieve constructive social change, never mind protect the individual from “agreeing” to “decisions of desperation” that leave them and society as a whole worse off (see also sections E.3 and E.5).
This is not to suggest that anarchists desire to eliminate individual decision making, far from it. An anarchist society will be based upon individuals making decisions on what they want to consume, where they want to work, what kind of work they want to do and so on. So the aim of the “citizen” model is not to “replace” the “consumer” model, but only to improve the social environment within which we make our individual consumption decisions. What the “citizen” model of human action desires is to place such decisions within a social framework, one that allows each individual to take an active part in improving the quality of life for us all by removing “Hobson choices” as far as possible.