The Transformative Power of Consumocracy

The transformative power of consumocratic law, under current circumstances, does not manifest itself as clearly as it could under some other plausible conditions. Notwithstanding the remarkable progress achieved by consumocratic initiatives over the last decade, a vast regulatory space remains unexplored by them. It may not come as a surprise that new initiatives could induce or accelerate the emergence of revolutionary theories in the field of economics and socio-legal research. Any such initiative would necessarily involve the transparent communication to consumers of information habitually excluded from their sphere of authority.

One exemplar of this potential is given by the possible diffusion, on consumer markets, of information relating to remuneration gaps found in certain sectors of the economy. Nothing inexorably prevents consumer markets from accounting for ideal and real ratios between the highest and the lowest wages paid by a corporation (or a group of corporations) in the production of goods and services. A concern for reducing extreme remuneration gaps may thus be combined with the functioning of a ‘free market’ economy. Through consumer-induced changes in corporate profitability equations, a reduction of wage inequality could be just as ‘legitimate’ as improving the ‘quality’ of products a corporation sells intending to satisfy customers who can freely express their preferences. It is here a matter of generating less inequality through freedom, rather than a traditional case of opposition between equality and freedom. It is also an ironic reversal that one solution to the question of reducing extreme inequalities created by the liberal order finds itself potentially of the same mind.

This clearly runs against the notion that any attempt to deliberately remodel economic inequalities is a hindrance to freedom. At the heart of this deeply-rooted belief beats the idea that a market economy cannot alone bring about a purposeful reduction in economic inequality. Few have expressed this belief as simply as the anti-Keynesian author Ludwig von Mises: “If one wants to do away with inequality of wealth and incomes, one must abandon capitalism and adopt socialism.” (1955: 100). It may be worth noting that if pure egalitarianism is out of reach and, on several counts, undesirable, such a suggestion has little bearing except in drawing nearer to this objective. It is then from this perspective that it is similarly argued, from the Keynesian camp, that the deliberate remodelling of economic inequalities is unthinkable without State intervention: “anti-State egalitarianism remains in all likelihood the most utopian project conceivable” (Brunelle 2000: 31).

And yet, as illustrated above, such doctrine does not hold up to scientific criticism. It moreover lies on a parent dogma, no less challenged by the potential of consumocratic development, namely that the conditions of production and distribution of wealth must be addressed separately – by the market and the state. It is John Stuart Mill who first clearly stated the basis for the balkanization of the conditions of production and wealth distribution:

“The laws and conditions of the production of wealth, partake of the character of physical truths. There is nothing optional, or arbitrary in them (...) this is not so with the distribution of wealth. That is a matter of human institution solely. The things once there, mankind, individually or collectively, can do with them as they like.” (1909: Book II, II.1.1)

Accordingly, with the conditions of production obedient to natural imperatives, only the conditions of wealth distribution would accommodate institutional rearrangement. Despite its questionability, one must recognize along with Hayek that this type of proposition casts the basic justification for State intervention in the pursuit of a modern ideal of distributive or social justice (1960:430). And whether Mill’s argument is accepted or rejected, the proliferation of economic inequality generated within the market economy, aided by some laws, is generally perceived as an irreversible phenomenon in the absence of state-led intervention, coercive or otherwise. In this context, state intervention would be the symptom of the natural conflict between the search for efficiency in the economic order on the one hand, and an egalitarian ideal on the other (Aron: 1969: 47-49). These apparent oppositions do fade away under closer scrutiny to reveal the more flexible nature of economic liberalism.

A consumocratic perspective is central in this inquiry. It ably shows that the alleged incompatibility between the imperative of production and an ideal of distributive or social justice is grounded in a narrow conception of what qualifies as a desirable good in the eyes of consumers, coupled with limited information in relation to that good. For it is in liberty that consumers may enrich their notion of a desirable good to attach an ideal of 'social justice' to it. It appears then that a deliberate remodelling of economic inequalities is thinkable without violating the right to property. More precisely, the redistributive state, through taxation, may be said to contravene the obligation not to ignore a moral constraint (respecting the right to property) in the pursuit of a moral goal (the reduction of inequality). But an appropriate consumocratic scheme could, in principle, pursue the same moral goal without ignoring the same moral constraint.

It follows that the above principles of modern socialism and liberalism may be reconciled through the (personal and institutional) redefinition of what are exchangeable goods. This assertion does not solely relate to the combined search for more freedom (or competition) and equality (or solidarity). It suggests that other seemingly contrary goals, such as greater market freedom and socio-environmental protection, could also merge more easily under consumocratic law – hence the relative success of Rugmark (child protection and schooling), FSC (forestry preservation), Flipper Seal (dolphin friendliness), Green Seal (ozone protection), Fairtrade (wage security), and Equal-Salary (gender pay equity) among popular consumocratic schemes. The further development of these schemes would likely weaken the dualism that traditionally characterizes economic and social regulatory action. Such dualism pervades orthodox regulation discourses at the state level and is evident at the international level in the clear separation of the ILO and the WTO, as well as in the institutional arrangements imagined in order to bring these organisations closer towards a common set of objectives. In other words, the development of consumocratic law invites us to envisage a theoretical and practical departure from dualism to duality in the regulation and understanding of essential economic and social action.

Another major inroad into the domain of transnational governance would subject a number of governmental decisions to consumocratic sanction. This may appear as counterintuitive, since consumocratic influence is in principle limited to the private sphere of market exchanges. The consumocratic influence can nonetheless extend its range through the subjection of targeted corporations and sovereign governments to codes of conduct concerning, at one level, the corporate financing of political parties and, at another level, the national security and foreign policy of states, for instance. Plans designed to encourage the selling of consumer goods produced by corporations that support peace-seeking organisations via corporate financing are incidentally under way.

Early Beginnings

In 1791, an estimated 300,000 British consumers, mainly led by women, had been involved in what is held to be the first consumocratic initiative recorded by historians. They abstained from consuming sugar produced under conditions of slavery and later came to support “free labour” alternatives. The first anti-slavery initiative was the prelude to what has become an increasingly sophisticated mode of regulating corporate behaviour.

In London and throughout the British Islands, advertisement in support of the “free produce” movement flourished. A typical ad is that of a then sugar refiner: "BENJAMIN TRAVERS acquaints the Publick that he has now an assortment of Loaves, Lumps, Powder Sugar, and Syrup, ready for sale […] produced by the labour of FREEMEN.

To date, environmental protection (also understood as the promotion of future generations’ well-being), decent working conditions, as well as the humane treatment of animals are among the spheres toward which the ethical preferences of consumers appear to be heading. Among the most advanced forms of consumocratic devices are the dolphin-safe, fair-trade, child labour free, and forestry (eco)-labelling initiatives.

The Malaise of Modernity?

I am trying here to examine the capacity of consumers to influence corporate profitability equations (and, plausibly though less directly, governmental decisions) through the consumocratic system, that is, the regulation system within which corporate behaviour is subordinated to consumer demand functions obeying both logics of self-regarding and other-regarding action. In particular, and in contrast with Charles Taylor’s critique of modernity (The Malaise of Modernity, 1991), it is suggested that such a system may mark the development of modern societies in four notable ways.

First, by inviting the individual to inject ‘meaning’ into the socket of the liberal order itself, and offering an ordering of values in which the sense of indifference is posited below that of social responsibility, prior to choice. Second, by effectively soliciting rational and other-regarding behaviour, while ensuring that instrumental reason does not obligatorily take precedence over finalities on the market place. Third, by giving politically disenchanted consumers the opportunity to exert new authority outside the traditional spheres of consumer influence, generally shaped by a deficient ideology – one under which it is (wrongly) assumed that market mechanisms are inherently guided by the solicitation of consumers' individualistic concerns. Fourth, by concretely challenging the common perception that the failure by the State to correct economic externalities in markets leads to undesirable results that are inevitable. It can be shown in effect that a nascent consumocracy is opening original spheres of democratic influence in the field of socio-environmental protection – a state of affairs which may prove critical in the face of the coming social and environmental crises.

Consumocratic Development

Some potential inroads in the development of consumocracy exhale a certain revolutionary flavour. Gender labelling and (anti) extreme inequality labelling are conceivable market-based schemes amenable to reducing inequalities in the work arena, in spite of an old dogma to the effect that non-state egalitarianism is the “most utopian project that can be conceived”. This regulation mode is otherwise limited by its ability to effectively broaden the signals as to what qualifies as a desirable consumer good (i.e., the supply-side of consumocracy) in addition to solicit less selfish behaviour among consumers (i.e., the demand-side of consumocracy). The process preferences of consumers are also likely to be directed towards those spheres of activity from which the State is withdrawing. Indeed, according to findings from clinical psychology regarding choice and values, individuals appear more sensitive to the risk of losing that which they already enjoy than to the risk of benefiting from something which they do not already enjoy to some extent. In line with these findings, the fear that clearly-defined values of solidarity will disappear (because these same values are losing State support) could in fact surpass the desire to uphold new values of solidarity (in those areas where such spirit is still poorly defined). The popular support for equal health care treatment in some countries, combined with the handing over of certain state functions to the private health care sector, may thus be preparing fertile ground for other consumocratic developments.[1]

For the consumocratic regime, stricto sensu, does not involve direct governmental action, even though States are in a position to require, discourage, and disallow the diffusion of process information by State-sponsored labelling enterprises. It follows that only private-sponsored labelling initiatives encapsulate the true dynamics of consumocratic markets; whereas State-sponsored initiatives first operate under the (enabling) governmental regulation of consumer choice, private-sponsored ones immediately allow for the regulation of societal objects through consumer choice. It is indisputable that consumers benefiting from a State regulation intended to broaden their access to process information can in turn have an impact on the regulation of societal objects. In both cases, once it is established, by state or non-state agents, that consumers ought to be (and will be) given access to process information, consumer choice then becomes the market driving force behind the alteration of targeted production methods. One must acknowledge however that consumers’ potential regulatory power is brought to higher levels when free of State obstruction. The use of the ‘product-process distinction’ by the WTO Appellate Body is but one illustration of State-sponsored interference in the diffusion of process information.

[1] In such an instance, a general code of conduct providing for the conditions under which categories of (relatively poor) people would have access to less expensive medical services would have to be agreed upon by popular and central medical bodies. Clinics in urban areas would then have an incentive, under a renewed ‘social licence to operate’ to abide by the code to the extent that the public and a critical mass of (relatively well-off) people would favour a more equitable private health care system. This is not to suggest, to be sure, that the State could or should not support, directly or indirectly, such initiatives.

Marmosets Provision Food Altruistically

Other-regarding preferences in a non-human primate...

"Human cooperation is unparalleled in the animal world and rests on an altruistic concern for the welfare of genetically unrelated strangers. The evolutionary roots of human altruism, however, remain poorly understood. Recent evidence suggests a discontinuity between humans and other primates because individual chimpanzees do not spontaneously provide food to other group members, indicating a lack of concern for their welfare. Here, we demonstrate that common marmoset monkeys (Callithrix jacchus) do spontaneously provide food to nonreciprocating and genetically unrelated individuals, indicating that other-regarding preferences are not unique to humans and that their evolution did not require advanced cognitive abilities such as theory of mind. Because humans and marmosets are cooperative breeders and the only two primate taxa in which such unsolicited prosociality has been found, we conclude that these prosocial predispositions may emanate from cooperative breeding."

Four Types of Other-Regarding Behaviour

Consumers invited to pay attention to both the final and peripheral attributes of goods may not act solely in accordance with their own interests, but also in accordance with the interests of others. Four types of ‘other-regarding’ behaviour may be elicited through this rapprochement between the spheres of production and consumption.

The first type characterizes consumers as motivated by sympathetic feelings towards wage-earners, vulnerable beings, or future generations. These feelings are sufficient to such consumers to develop an ethical approach to buying, independent of the presence or absence of other mechanisms of justification; in the end, they create their own norm which eventually may or may not be observed by others. These non-individualistic feelings rest perhaps more generally on the altruistic trait that is widely shared among humans. In support of a naturalistic vision of this phenomenon, one may note that this trait is present among other animal species.

A second type characterizes consumers as motivated by a sense of duty. This duty is hardly influenced at all by the culminative outcomes of an individual purchase made as a result of an enlightened choice. Rather, its source is more akin to that which motivates many voters and which consists in anticipating theoretically what the likely results would be if everyone acted in the same fashion (in voting or not voting, in supporting or not supporting a consumarchic system). Following Kant, this duty can be assimilated to a 'categorical imperative'*; it does not respond inevitably to utilitarian reasoning.

A third type characterizes consumers as motivated by the effects of already-established or emerging norms of conditionality – notwithstanding obvious financial constraints. An example of this type would consist in describing the behaviour of consumers who desire to express their altruism on the condition that a critical mass of consumers are doing the same. This egalitarian norm is obviously not without its ties to objectives of efficiency and, more generally, a utilitarian perspective. Similar norms could exert a positive and approving social pressure on ‘other-regarding’ types of consumer action and, as a corollary, a negative and disapproving social pressure on more egoistic patterns of behaviour.

A fourth type characterizes consumers as motivated by a spirit of admonitory justice. This means that people may value the sending of disapproving signs to ‘abusers’ (or the sending of signs of approval to ‘non-abusers’) at least as much as the expression of sympathy towards ‘the abused’. The diffusion of process and peripheral information to consumers provides them with the possibility to express their unease in a context increasingly marked by feelings of powerlessness and disenchantment in the face of tutelary or corporate power. For the firms involved on a competitive market, such warnings and approvals take the form of increased or decreased market share.

* One may here recall Kant’s categorical imperative: "Act only according to a maxim through which you can at the same time will that it become a universal law" or "Act as if the maxim of your action were to become through your will a general natural law".

On the Societal Value of Goods

Increasing the level of transparency in the transmission of process information to consumers may involve sharing new information on processes either partially exposed or not yet exposed through societal marketing. This could take the form of a novel (or more detailed) social label or webpage on popular ‘fair trade’ themes such as the protection of vulnerable workers, animals, and some eco-systems. Less predictable themes include the reduction of extreme remuneration disparities, gender labelling, and other concerns which do not traditionally belong to the sphere of consumer influence. In a preconsumarchic setting, the latter are usually seen as sensitive issues to be (pre-eminently) examined by States. They are traditionally alien to the motivational foundations of commodity markets. In a consumarchic setting, they may reach individuals through the diffusion of societal information. The type of commodity value which is emphasized as a result may be referred to as the 'societal value' of goods.

Institutionalized Amorality

The Marxist idea that the rupture between production and consumption may turn into a source of oppression is not devoid of sense. Let us consider the situation of fundamental labour rights. By the standards of the International Labour Organization, there are certain things that one should not do to people in their place of work. In this sense, workers are the holders of fundamental rights. We count among these rights the right to physical integrity, and the rights to freedom of mobility and expression. In the labour context, they consist of the right of children to a task and a work environment that do not pose serious risks to their integrity; the right of under-age children not to perform work; the right not to be subject to forced labour; the right not to be subject to discrimination; and the right to associate with the goal of agreeing upon suitable working conditions.[1]

These rights attach to individuals in their workplace. In no way do they commingle with the rights in those things manufactured by a person at work. Besides, the conditions under which a thing is produced do not legally qualify the traditional status of that same thing. It follows that ‘real rights’ attach to the thing (from a civilist perspective, more particularly), but are alien to the conditions under which the item was made. Under both the common and civil law regimes, the sale (which implicates the private law of contract) of a stolen carpet (property law pertaining to the private right in goods) might be stained with illegality,[2] whereas the sale of a carpet manufactured under illegal working conditions would not normally be stained with such illegality, whether or not the buyer is aware of the manufacturing conditions. Within this institutionalized rupture between the spheres of production and consumption, goods produced under conditions that violate the workers’ fundamental rights can therefore be offered and sold legally on the markets.

[1] These are, more precisely, the rights envisioned in the Freedom of Association and Protection of the Right to Organize Convention, 1948 (87), the Right to Organize and Collective Bargaining Convention, 1949 (98), the Forced Labour Convention, 1930 (29), the Abolition of Forced Labour Convention, 1957 (105), the Equal Remuneration Convention, 1951 (100), the Discrimination (Employment and Occupation) Convention, 1958 (111), the Minimum Age Convention, 1973 (138), and the Worst Forms of Child Labour Convention, 1999 (182), which are brought out by the ILO Declaration on the fundamental principles and rights at work (1998).

[2] This relates to a rule that is firmly rooted in both legal traditions: in the common law, one may refer, for example, to the decisions rendered in Lipkin Gorman v. Karpnale Ltd. [1991] 2 AC 548; R. c. Ilich (1987) 69 ALR 231, 244; Merry v. Green (1841) 7 M and W 623; Rex v. Hutton (1911) 19 WLR 907 (the simple theft of water might be – or have been – an exception); or, in the civil law, to the French Code Civil (articles 1599 and 2279), the Spanish Codigo Civil (articles 433, 447, 464 and 1950), the Québec Code Civil (articles 1713 and 1714), the German Bürgerliches Gesetzbuch (articles 861, 935 and 1006) as well as the ancient Roman Law I ([Corpus Juris Civilis, Digest 47.16]; de receptatoribus).

A Power Struggle

The disputed exercise of power over the determination of production conditions constitutes a major obstacle to a more transparent diffusion of process information to consumers. This diffusion does reduce the power of producers to determine the nature of the conditions under which goods are produced. What is at stake in the transparency debate may be more than the cost to be incurred in actually becoming a ‘good corporate citizen’. The cost of altering production processes in the South-Asian carpet industry, for instance, is principally held by consumers willing to pay a premium (about one percent of the market price of carpets) to encourage adult-made textiles and sponsor elementary schools for their children.

What is at stake is also a struggle over the locus of power and control, over the capacity to define policies that shape the development of transnational markets. The Nike case provides a now famous illustration of this. When faced with charges of labor exploitation, the transnational company attempted to depict itself as a “socially responsible employer” but nevertheless sought the protection of the First Amendment to isolate this very claim from the false advertising regulation applicable to commercial speech. It contended that commercial speech should not be considered as encompassing attributes other than “the qualities of a product as such (like its price, availability, and suitability)”. (See Nike, Inc. v. Kasky, 45 P.3d 243 (Cal. 2002); 123 S. Ct 2554 (2003). Influential associations in support of the petitioner added that “only speech that does no more than propose a commercial transaction – that is, speech that does no more than promote tangible qualities of a product or service in a traditional advertising format – may be treated as commercial speech and subjected to strict liability rules”. (See Brief Amici Curiae of Forty Leading Newspapers, Magazines, Broadcasters, Wire-Services, and Media-Related Professional and Trade Associations in Support of Petitioners, 2003 WL 835613 cf *28 (emphasis added).

Consumers May Have 'Preferences for Processes'

A central feature of the traditional marketing system (and its legal background) lies in the isolation of information pertaining to the consumer good as such (its final attributes) from that pertaining to the means by which it is made (its peripheral attributes). The final attributes of a consumer good refer namely to its price, quality, and safety, whereas peripheral attributes point to the environmental effects entailed by its production, the working conditions under which it comes into being, as well as the treatment of animals involved in its production chain, among examples of familiar other-regarding concerns*. This blog refers in a more general way to the first type as 'product information', and to the second type as 'process information'.

* Some peripheral attributes, such as the engineering techniques retained in devising a product, are by nature less likely to influence other-regarding consumer activity. However, growing concerns surrounding the production of genetically modified food, for instance, not only relate to personal health and safety risks, but also to cross-pollenisation effects and other environmental consequences on local agricultural production. Hence the general characterization of process information delivery as an outlet for other-regarding behaviour and a bridging device between acts and societal consequences for consumers who often have "preferences for processes".

"Buying is Voting" (I)

I wish here to help clear the confusion that often surrounds the notion of ‘ethical buying’ in its relation to the act of voting.

Under consumarchy, a critical mass of consumers (as opposed to a qualified number of voters*) is necessary and sufficient to force changes in corporate policies. This introduces us to an interesting issue: the so-called ‘undemocratic character’ of consumarchy.

Under democracy, it is said, each voter is entitled to one vote, irrespective of her wealth, status and power. Under consumarchy, by contrast, rich consumarchists – i.e., consumers who pay special attention to the peripheral attributes of goods – may express their preferences more often than others since they enjoy more purchasing power. The consumarchic regime, therefore, would be comparatively unfair.

It must first be noted that consumarchy is not designed to replace democracy. Its raison-d'être is actually justified by some particular failures of liberal democracy. Those are generally referred to by economists as positive and negative 'externalities' such as lack of training programs, health services, and excesses of pollution. If the legal pursuit of profitable corporate activities always led to the protection of the public interest, consumarchy would arguably not emerge as a supplemental system of corporate regulation.

True, consumarchy is not based on egalitarianism. To bring about changes, it requires the participation of a critical mass of consumers in various market niches. This critical mass can equally be found among poor and rich consumers, though. One fifth of Wal-Mart's typical clientele is powerful enough to curb some of the megacorporation's policies (e.g., forcing it to offer decent salaries to first chain suppliers), just as one fifth of Jaguar's clientele is capable of forcing changes in this higher niche of world markets. Relatively poor consumers, thus, do have a say in that system.

One may also observe that consumarchists, rich and poor alike, generally promote a less inegalitarian distribution of resources - through fair trade initiatives for instance. These initiatives, in general, are a response to the failures of protective state activity - e.g., failures of (non-)democratic governments to enforce their own minimal wage or minimal health and safety standards (...) i.e., standards which typically are of no help in raising the lifestyle of the upper-classes. This may come across as a surprise to ideologues for whom people, when wearing the consumer hat, may only be pursuing their self-interest, strictly defined. Reality, less surprisingly, has often confounded self-proclaimed 'realists'.

I have suggested elsewhere that consumarchy, although not based on egalitarian structures, could tackle more directly the issue of extreme remuneration gaps found in production chains. Besides, is there such a thing as an ideal level of democratic (in)equality? Who, if so, would be better placed to 'define' it? These are age-old questions which I will not address here. Suffice it to recall, to admirers of democratic equality, the impact of lobbying and corporate financing, overt and\or covert, on political agendas, elections, and government action.

* e.g., a majority of voters, in a binomial system.

"Buying is Voting" (II)

I wish here to help clear the confusion that often surrounds the notion of ‘ethical buying’ in its relation to the act of voting.

What are voters and consumarchists – i.e., consumers who pay special attention to the peripheral attributes of goods – rationally engaged in?

Both voters and consumarchists value the symbols attached to the process of voting and the process of ethical buying at least as much as the desired outcomes of their actions (e.g., the election of a preferred political party and the adoption of a certain ethical practice by corporations). It is otherwise difficult to explain why (1) voters would apparently wait in line to simply add one vote into a national election machinery and (2) consumers would spend 'extra time' and perhaps 'extra money' when shopping.

Rational people know that if the fate of an election were to hinge on a single vote, notwithstanding numerous (and potentially controversial) rejected ballots, a new election would be called in response. The culmination outcome of their action, in such a decisive and critical case, would end up in a cul-de-sac. Voters do not, by all logic, only value the culmination outcomes of their action, but also the very fact of exercising their right to vote, then. The act of voting is indeed the most powerful symbol of living democracies and, were it to fade away, it would most likely be rehabilitated, paradoxically, by an obligation to vote imposed by the state. Australia and Belgium, among other states, have made voting a legal duty.

Interest in exercising one’s right to vote is inextricably attached to a civil project, either supportive or oppositional. Voters typically refer to culmination results when it comes to justifying their going to vote. Culmination outcomes envisaged by voters (e.g., supporting a certain political program or a particular ideology) are used to justify their vote. Voters wish to ‘win’ their election, or ‘object’ to a political project, but it is difficult for them to explain how, in effect, their individual vote will ‘make a difference’ and significantly contribute to the ultimate outcome.*
The internalization of the moral duty to vote, and the valuation of this democratic necessity, is typically strong enough to induce voters to speak of culmination outcomes as their principal motivational force.

Consumarchists are no different. There is a ‘societal value’ attached to a product subject to societal marketing. A ‘child labour free’ carpet for sale is not simply a carpet for sale. It is also an idea of, and a commitment to, fairness. Societal marketing thus opens a door to the terrain of civil action. In this context, consumarchists will often justify their ethical buying by referring to some socially desirable outcome (e.g., the elimination of child labour). Rational consumarchists are aware of the necessary dilution of the instrumental effect of their purchasing decisions in the sea of everyday sales. Once again, it is an ethical appeal, more or less internalized under the form of a ‘duty to buy responsibly’, that may drive such pro-active consumers; they must value the process of ethical buying as much as the desired culmination outcome (i.e., the making of carpets by fairly paid adults, not by young bonded labourers). Voters and consumarchists therefore value the process of voting and of buying responsibly as much as the civil projects that lie behind such processes. This is why one may anticipate participation levels in consumarchic activity to approach or mirror those of democratic activity. This trend, no doubt, could take on distinct flavours, as norms and values evolve in time. How does one explain that Scandinavians seem to be more eager to consider the interests of distant others than, say, the disciples of Milton Friedman ?

* Some people also find interest in combining more directly reputational effects with the value that is socially attached to the act of voting or buying responsibly; they are openly proud of having voted, or showing their latest fairly traded item.

Tony Blair on Inequalities

Most economists contend that capitalism 'naturally' generates increasing economic inequalities, unless constrained by the state. PM Tony Blair argues that the state, in turn, has no choice but to avoid taxing the multi-billionaires too much if it wishes them to live, for instance, in the UK. As a result, extreme inequalities appear to be inevitable. Several 'experts' thus seem to neglect the fact that consumers may as well enlarge their idea of what is a desirable consumer good and take account, in their purchasing decisions, of remuneration gaps found in production chains. The bar code scanner technology developed at the Massachusetts Institute of Technology would be likely to play a central role in this process. Restricting remuneration gaps between CEO teams and low-paid workers to (what people may consider) 'reasonable levels' also seems to be achievable within capitalism. It is unclear whether this reduction is desired by significant segments of the world population. The fact remains, however, that 'inevitable' (extreme) economic disparities should no longer be considered as such. Is revolutionary societal marketing on the horizon?

Project Db Military Introduction Plan

What is Revolutionary Societal Marketing ? An easy way of finding out consists in imagining how one would attempt to sell consumer goods produced by corporations that finance peace-seeking organizations while restricting remuneration gaps between CEO teams and low-paid workers to reasonable levels*.

You may not want to copy tobacco companies, unless your brand should appeal to the target buyer's 'key needs of masculinity reinforcement'.

* One fascinating question is worth stressing here: How much inequality is necessary to nurture the spirit of entrepreneurship? Is a Japanese CEO rendered ten times less motivated, or less dynamic, than his (her) American counterpart, when offered 10 million dollars per year as opposed to $100 M? In a more fully developed consumarchic society, the market could end up distinguishing between profitable disparities and unprofitable ones. Long live envy...

Child Labour and Expert Opinions

A critical issue with respect to the development of regulations on consumer access to process information is the fact that experts do not inevitably come into agreement with each others. The situation is all the more troubling since incompatible positions on important problems are being advocated.[1] One of the most disconcerting specialised debates underlying the regulation of consumer choice relates to child labour.

One the one hand, some experts regard child labour as the symptom of some other root causes.

“Children work for a variety of reasons, the most important being poverty and the induced pressure upon them to escape from this plight. Though children are not well paid, they still serve as major contributors to family income in developing countries […] There must be an economic change in the condition of a struggling family to free a child from the responsibility of working.”.[2]

Specialists affirm that extreme poverty, in contrast with parents’ callousness, is the root cause of child labour (Basu 1999; Basu and Van 1998; Brown 1999, 2005), adding that “[w]hile consumers are, in some sense, better off if they are consuming goods produced only by adult labor, no claims can be made concerning the overall welfare of the children involved” (Brown 1999: 3). In consequence, ‘child labour free’ labeling initiatives may not be worth pursuing (Basu and Zarghamee 2005). Pallage and Dessy[3] (2005) would go as far as never imposing a single ban on the ‘worst forms of child labour’. Article 3 of the ILO Convention on the worst forms of child labor (1999) determines that these forms include:

a) all forms of slavery or analogous practices, such as the sale of or trade in children, debt servitude and bondage, as well as forced or mandatory labor, including forced or mandatory recruitment of children for use in armed conflicts;

b) using, recruiting or offering a child for purposes of prostitution, the production of pornographic materials or pornographic entertainment;

c) using, recruiting or offering a child for illegal activities, particularly for the production and trafficking of drugs as defined by the relevant international treaties;
d) work that, by its nature or the conditions under which it is performed is likely to adversely affect the health, safety or the morality of children.

Attempts to force children to leave their work positions may well lead, it is here often argued, to the worsening of their working and living conditions.[4]

On the other hand, experts also condemn child labour vehemently, insisting that it is a way of keeping children out of school, contributing to the escalation of illiteracy and poverty (Burra 1998). They argue that the establishment of compulsory education is a necessary condition for the reduction and abolition of child labour; more especially so as it is easier to monitor school attendance than to monitor the work of children (Weiner 1991). Admitting that child labour is partly a response to the financial conditions of deprived families, they also draw attention to the existence of a demand for child labour and challenge the arguments traditionally invoked in its support. One reason is that children would benefit from special skills (e.g., the nimble fingers of young carpet weavers) which help them perform certain tasks better than adults. Another is that certain skills develop over long periods so that early training leads to better skills and improved incomes and job mobility. The two arguments have been questioned. It has been argued that no industry is child-specific, in the sense that there is no work process in which the labor power of children cannot be replaced by that of adults (Chandrasekhar 1997). Evidence also supports the conclusion that children trained at an early age do not enjoy better economic benefits than children trained after the age of 14 (Swaminathan 1997). Governments, it is further advanced, can bring an end to child labour; what is lacking is the political will to achieve this goal (Weiner 1995).

So, under which criteria should one judge the legitimacy of consumers' interventions in the lives of distant child labourers? I spent the last 6 months in India, trying to figure that out. Keep posted.

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[1] Social science experts are the principal actors of such conflicts. As underlined by Albert Einstein: “If there is anything that can give a layman in the sphere of economics the courage to express an opinion on the nature of the alarming economic difficulties of the present day, it is the hopeless confusion of opinions among the experts”. In Thoughts on the World Economic Crisis, 1935.

[2] World Bank / HCO, 1996.

[3] It is known that Dessy was involved in hazardous activities as a child worker.

[4] Cf. the making of bricks by former child carpet weavers, the resort to uncontrolled prostitution among city workers, or sheer starvation and death.

The Consumarchist and the Typical Shareholder

If the interests of shareholders lie in the avoidance of a boycott, why distinguishing between consumers and shareholders in addressing the issue of corporate guidance and its legitimacy?

The interests of shareholders clearly lie in the avoidance of a boycott. The reaction of shareholders, though, is distinct from the action of consumers. Unless they are involved in proactive ethical investment initiatives, shareholders are typically passive before the detailed conduct of their corporations and do not attempt, in general, to impose extra-legal obligations upon them. It can be shown that corporations are rather free to engage into almost any kind of profitable activity - even if such activity is known, by large segments of the population, to be socially or environmentally detrimental - provided that they do so in accordance with applicable state laws. The resulting detrimental effects are somehow justified by the inaction of (more or less) representative States. This is a pre-consumarchic approach to corporate governance and its legitimacy.

Under strong consumarchic rules, corporations are likely to be guided in ways which shareholders (and managers) would perhaps not have envisaged. Under weaker consumarchic rules, however, corporations are more likely to seek to manipulate consumers or make strategic use of their conflicting demands in order to reinforce their autonomy. Corporate autonomist strategies may also be applied internally; it is not clear whether an increase in the market share of a corporation, following a positive response to a consumarchic initiative, would necessarily benefit shareholders or a majority of shareholders.

This is indicative of how influential consumers may become in guiding corporate behaviour - nothing is said of their ultimate impact.

At another level, and more decisively, a question then remains: In the guidance of corporate conduct, is shareholders’ relative passivity more or less legitimate than consumers’ proactive behaviour? This question needs to be seriously taken into account: the effects of a consumarchic initiative designed to help children (for instance, the promotion of child labour-free labelled carpets) may require some research before one concludes on the desirability of a fully transparent consumarchic project. A consideration for the fate of the targeted children offers the basis on which to establish, ultimately, the legitimacy of such an initiative.

Some analysts may not agree with this position. They argue that consumers may view consumption choices as moral acts that have personal significance irrespective of their instrumental or expressive effects, and that liberal theory should embrace the principle of “equal respect for the differing preferences and visions of the good life with which individual consumers and producers approach the market” [(See for instance R. West, “Liberalism Rediscovered: A Pragmatic Definition of the Liberal Vision”, 46 U. Pitt. L. Rev. 673, 702 (1985)]. For insance, part-time work for children may be considered unacceptable by some consumers; yet it may be seen as a necessity by the parents of these children. Admittedly, such a non-instrumentalist approach would arguably run counter to the search for regulatory tools designed to counteract the possible emergence of ill-intentioned groups of consumers. Hence the need for constitutional consumarchic law?

A Liberalism in Need of Liberation

The notion of a regulatory activity driven by consumer power may seem inconsistent. How could consumers be at the source of regulation? Are they not instead (or more naturally) the subjects of regulation? potential, manifest, or latent victims of corporate negligence, misrepresentations, price-fixing, and abusive marketing? subjects requiring the protection of state law?

As suggested by references to the 'sovereignty of consumers', there nonetheless are standards which consumers have always seem to be able to impose on corporations. These standards are typically confused with traditionally defined attributes as to what is a desirable consumer good; e.g. a safe, accessible, and (more or less) affordable product of good quality and repute. They are also widely publicized - the market place is virtually inundated with slogans and images evoking the desirability of products thus defined.

The architecture of this informational structure is inspired by a deficient ideology, one under which it is assumed that market mechanisms are inherently guided by the solicitation of consumers' individualistic concerns. It is in fact in relation to oneself, as a general rule, that a consumer good is showing attributes of safety, accessibility, affordability, and so on - not in relation to others. The expression by consumers of concerns for others, under this ideology, is therefore an inconsistent notion. And such concerns (e.g. for workers, animals, the environment, or future generations) are then considered by some people to fall outside the purview of consumers' legitimate interests (this is the subject of a hotly debated question in regard to the role of the state in facilitating or preventing consumers' consideration for the processes by which goods come into being).

This exclusive approach to the exercise of individualism and solidarity is at the source of the influential (and false) dogma of a market naturally born selfish. Given that the operation of markets is based on individualistic logics of action - conveying no conscious concerns for others - the state is seen as the necessary corrective to the market economy. When faced with the failure of solidarity-derived functions (e.g. the functions of reducing environmental pollution for the benefit of all or preventing discrimination against vulnerable people), analysts are generally drawn, under this dogma, to invoke the contingent failure of the protective state in contrast with the necessary failure of the market. The state would therefore fail in its attempt to prevent or redress the undesirable effects, thus deemed inevitable, of private markets and individualistic logics of action. This is why contemporary liberalism is in need of liberation: it is otherwise covering its own tyranny.

A World Alien to Adam Smith?

It has become very clear over the last years that consumers may exert great influence on the adoption of practices more likely to ensure the viability of ecological systems. Since the adoption of these practices is based on a logic of solidarity, one which consists in not threatening the welfare of future generations, Adam Smith's (1723-1790) well-known maxim seems ripe for an update:

Presustainable version:
It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.

Sustainable version:
It is not from the selfishness of the butcher, the brewer, or the baker, that we expect sustainable dinners, but from a market-promoted sense of solidarity.

Alfred Marshall (1842-1924), founder of the neo-classical theory of supply and demand (under which, theoretically, consumers do not express their concerns for others), has been deemed responsible for having "abolished the moral problem", and created "an ideology to end ideology". On Marshall’s own testimony, the conditions under which goods are produced, and the moral dilemmas inherent in their possible consideration by consumers, are in effect excluded from his influential theory. They, however, were part of his concerns:

"The world would go much better if everyone would buy fewer and simpler things, and would take trouble in selecting them for their real beauty; being careful of course to get good value in return for his outlay, but preferring to buy a few things made well by highly paid labour rather than many made badly by low paid labour. But we are exceeding the proper scope of the present Book; the discussion of the influence on general wellbeing which is exerted by the mode in which each individual spends his income is one of the more important of those applications of economic science to the art of living."

In spite of his aristocratic assumptions, by suggesting that caring consumers could "educate" producers, Marshall was alluding to the expression of less selfish dispositions in consumers. Under consumarchy, informational barriers between the spheres of production and consumption are partially removed, thereby providing consumers with the possibility of expressing civic concerns. The emancipatory goal of consumarchy, in this sense, can be seen as releasing consumers from this uninformed fog in which they find themselves and which forecloses any resort to moral reasoning in their purchasing decisions.

Une consumocratie à la française ?

(letter to Le Monde)

La recherche par la majorité parlementaire française d’une plus grande flexibilité numérique de la main-d’œuvre et les vives contestations dirigées contre les CPE, en contrecoup, révèlent plus d’un malaise au sein de la République. Celui de la promulgation prématurée d’une loi pauvrement débattue a fait l’objet de toute l’attention journalistique souhaitable. Un autre, plus profond, renvoie à ce que Raymond Aron percevait comme la résultante forcément contrariée des pressions productivistes et des pressions égalitaristes modernes; les démocraties libérales seraient condamnées à entretenir la vision (lointaine) d’une économie libre et égalitaire. Ce malaise est d’autant plus exacerbé que les forces productivistes s’imposent progressivement sur le plan transnational alors que les mécanismes de distribution de l’insécurité économique des travailleurs se trouvent essentiellement confinés au terrain national. À des niveaux comparables de productivité numérique, s’ensuit une agglomération des forces productives, créatrices d’emplois, hors les zones (e.g. française, allemande) de protection relativement coûteuse de larges segments de la main-d’œuvre.

En dépit du caractère universel de cette esquisse, la France domestique, à ce jeu, se voit marginalisée. Avec les États-Unis d’Amérique, elle porte toujours haut et fièrement le flambeau historique de la liberté, mais dans le même temps, et en contraste avec ces derniers, elle présente au monde, singulièrement et au prix de déchirements sociétaux, le berceau vivant du rêve égalitaire. Devant l’apparente inaccessibilité de ce rêve, on a semble-t-il, hors la France, baissé tête et bras à la suite de l’« épuisement des énergies utopiques » que déplore Jürgen Habermas dans le jusant post-socialiste. Or, dans la République de Marianne, on tient bon. On y reconduit énergiquement une certaine vision de la fraternité. A-t-elle un avenir?

Sa culture organisationnelle se distinguant nettement de celle de l'Europe du nord, je soutiens que cet avenir pourrait plus librement voir le jour dans la mesure où une masse critique de consommateurs (de France et d’ailleurs) se saisira effectivement du potentiel régulateur de la ‘consommarchie’ (ou consumocratie).* C’est dire qu’il importe de reconnaître la possibilité, en régime consommarchique, de forcer la redéfinition des équations (nationales et transnationales) de profitabilité des entreprises de manière à y intégrer des considérations jusqu’ici reléguées à la sphère des « conséquences inévitables » de l’action privée des marchés auxquelles les États apportent, avec plus ou moins de succès, des « correctifs » jugés appropriés. Parmi ces considérations, sources d’irritants sociaux, figurent notamment la disparité grandissante des rémunérations, la pollution environnementale, les pratiques discriminatoires à l’endroit des femmes, des personnes âgées et autres groupes de travailleurs vulnérables. La consommarchie consiste ainsi à explorer de nouveaux champs d’influence démocratiques au cœur même de la mécanique libérale qui paraît obstruer les sentiers du développement 'durable', pacifique et équitable. Bref, elle s’ouvre à des valeurs tantôt chères à la gauche, tantôt chères à la droite, en usant des moyens de celle-ci. Une constitution du droit consommarchique mettrait en relief la suprémacie de la démocratie mondiale et la recherche pacifique de la survie de la race humaine.

À ce jour, le droit consommarchique (i.e., les codes mis en œuvre par les pressions des consommateurs et de l’opinion publique) a été consacré, en marge de l’action étatique, à l’élimination progressive du travail forcé des enfants (Rugmark), à la protection des animaux de laboratoire (Leaping Bunny) et à la préservation des forêts (FSC), entre autres initiatives documentées. Plus développé en territoires anglo-saxons, ce droit non-étatique pourrait cependant voir sa portée élargie à la défense d’autres valeurs ; son domaine d’intervention est virtuellement infini. Il n’est pas improbable qu’il parvienne à influer le financement des partis politiques, à en créer d’entièrement nouveaux, à affaiblir le complexe militaro-industriel global, à réduire les écarts extrêmes de rémunération (à l’encontre de vieux dogmes de la science économique moderne, une entreprise affichant ouvertement des ratios salariaux -super/infer- relativement bas pourrait ainsi voir croître sa part de marché et sa profitabilité…), à encourager la recherche fondamentale et le développement des technologies de l’hydrogène, de même qu’à prévenir l’usage abusif, en France, des successeurs probables du CPE (en prenant soin de distinguer entre la rupture bona fide du contrat de travail et celle qui s’inscrirait dans une stratégie d’évitement : des cycles courts d’embauches et de licenciements successifs). Les modalités de transmission des informations au public, éléments centraux du processus de mise en œuvre du droit consommarchique, sont variées, et aussi complexes sont leurs tenants et aboutissants. Avec ou sans le soutien de l’État, il appartient au génie français de la régulation de les adapter aux réalités de la France. La consommarchie, à l’échelle mondiale, n’en sera que plus riche de promesses.
* De consummare (latin), consommer, et arkhê (grec), commander - ou 'consumocratie', de kratos (grec), autorité.

On the Subordination of Firms

At the center of the debates generally raised by the intervention of non-state regulation, the following question remains inescapable: does the enterprise owe ‘society’ anything apart from its state-defined legal obligations? Enterprises have always carried out their activities on the basis of values and principles that are widely shared by the communities that support them directly or indirectly. This set of values and principles is the socially standardized platform for all business activity.

The Economist espouses a broad conception of this social licence: “In a way, this is to concede an important point to the advocates of CSR [corporate social responsibility]. Capitalism does function on top of, and one way or another is moulded by, prevailing popular opinion. [T]he conditions that must be satisfied if capitalism is to serve the public good are not trivial. A comprehending and supportive climate of opinion must be added to the list. That is why the battle of ideas matters so much.” (January 22-28, 2005, special survey, p.10).

Sex and Security vs the Green Car?

Although the adoption of financially profitable practices that comply with non-abusive laws generally contributes significantly to achieving the objective of minimum social responsibility, the quest for profitability does not guarantee full satisfaction of the public interest. It may as well lead to overlooking the benefit of certain initiatives.

The sub-investment in the search for oil substitutes, combined with the intense and profitable exploitation of certain fossil compounds comprises serious risks that the community of States can barely control and that business plans largely disregard. Ambitious plans are being drawn up in order to (legally) extract more oil from bituminous sand even though this process generates 25 times more severe pollutants (sulfur dioxide) than conventional oil processing. Consumarchic initiatives in support of the Hydrogen Economy (Rifkin 2003) or other 'greener plans' may help in the transition to come. At any rate, it seems that oil market analysts are fully aware of the influence of modern gender symbolism on the demand side of the market:

"If cars continue to be the crutch upon which we rest the sex life of American males and the sense of security of American females, then we need a lot of oil." (...!)

- Irving Mintzer, Global Business Network (culled from the International Herald Tribune, Dec. 3-4, 2005)

What is Consumocracy ?

Consumocracy* (or Consumarchy) is defined in contrast to consumerist capitalism; the pursuit of self-interest, dear to consumerism, generally gives way to the effects of a sense of openness and solidarity within the consumarchic system.

Thanks to consumarchy, consumers have the choice of combining, in their purchasing decisions, the final attributes of goods (e.g., their price or manufacturing quality) with their procedural attributes (e.g., the conditions under which they are produced). It may then be viewed as a system by which consumers can exert moral or other authority on enterprises through a more enlightened selection of consumer products. It is therefore a regulation system within which corporate behaviour is in part subordinated to consumer demand functions obeying both logics of individualism and voluntary solidarity.

To date, environmental protection (also understood as the promotion of future generations’ well-being), decent working conditions, as well as the humane treatment of animals are among the spheres toward which the ethical preferences of consumers appear to be heading. Among the most advanced forms of consumarchic devices are the dolphin-safe, fair-trade, child labour free, and forestry (eco-) labelling initiatives.

Potential inroads in the horizontal development of consumarchy exhale a more radical flavour. Gender labelling and (anti-)extreme inequality labelling offer plausible market-based schemes amenable to reducing inequalities in the work arena, in spite of an old dogma to the effect that non-state egalitarianism is the “most utopian project that can be conceived”!

Consumarchy therefore calls for a more cautious appreciation of the seeming paralysis of liberal democracies’ reforming power, in response to Habermas' alleged “exhaustion of utopian energies” in the post-socialist tide, or the announcement by Fukuyama that 1987 would mark “the end of History”...

* from consummare (Lat.), to consume, and kratos (Gr.), authority or arkhê, command.