“IMAGINING OTHER…”

To examine difficulties and problems that consumers encounter, and to discuss different explanations of the reasons why consumers might have these problems. To discuss the idea of a “consumer society”, and the consumer movement.

The student should be able to:

- identify and classify the different kinds of dis-satisfaction that consumers may encounter

- give different explanations of the causes of these problems, and different remedies that follow from this (the “three waves” of the consumer movement)

- discuss whether it is accurate to talk of “the consumer society”, and if so, what its nature and origins are

- as a result of this, demonstrate an awareness of the context of the consumer movement.

Summary:

1. Consumers’ problems: #problems

(a) design #design

(i) quality

(ii) durability

(iii) safety

(b) other practices affecting consumers’ economic interests: #other

novelty,

packaging design and information

pyramid selling, mis-selling (endowments etc)

inadequate redress

2. How did the situation arise? #how

(a) increasing complexity of products

(b) higher consumer expectations

3. The three waves of consumerism, and remedies proposed: #waves

a) first wave – defensive – adaption, and self-regulation by business,

(b) second wave – democratic – action, protection and reform

(d) Some critical thoughts on advertising.

Notes:

1. Consumers’ problems:

We have noted already how, half way through the twentieth century, after the privations resulting from the Second World War, there was an economic boom, which led to higher standards of living in Britain (and America and Europe). However, it was not long before consumers began to express dissatisfaction about products – a dissatisfaction that took a number of forms.

1. In the UK, Medawar (1978) was one of the first books devoted specifically to the kinds of problems that the consumer can have. He grouped the most common problems as concerning:

(a) the design of goods: goods were not (i) of merchantable quality, i.e. fit for the purpose, or reliable, (ii) durable or even (iii) safe

(b) other practices affecting consumers' economic interests, such as unnecessary, wasteful or misleading packaging

(c) consumers being subject to excessive sales pressure, or having inadequate means of redress.

Here is a further definition and brief survey of each of these areas, with a few examples:

(I have taken some examples from the past, as given in Medawar and other books, as well as more recent examples, in order to show how the problem has not gone away. Such a list obviously needs constantly updating – you have only to turn to Consumer Advice columns in the newspapers, or such TV programmes as Watchdog to find, sadly, many more current examples.)

1 (a) Design:

Medawar breaks this down into three main areas:

(i) quality, reliability: does it do what it's supposed to do? Is it of merchantable quality/fit for purpose? Most of these issues are now covered by legislation (Sale of Goods Act, Trades Description etc).

e.g.

(ii) durability products can be made to last longer, but often were made with a short life so that the customer had to keep replacing them. In case of more elaborate goods, this could be called 'planned obsolescence' that is, the manufacturer plans in a limited lifetime for the product.

Note: the use of sell-by dates on food could be seen as another way of increasing turnover. .

e.g. light-bulbs – the traditional “coiled coil” bulbs can burn out very quickly, if the filament is too thin. Long-life traditionally-made bulbs cost more, and nowadays you can buy a different design which lasts fifteen times as long. These are of course more expensive, but in the long term probably save the consumer money - they also use less electricity, so cost less to run and are more ecological!

e.g. cars: life could be extended by 2 - 3 years by avoiding moisture traps (in the wheel arches especially). Manufacturers have in the past been reluctant to rust-proof as much as they could (citing extra cost to the consumer!).

(iii) safety n.b. some “safety” cases might seem trivial, especially in the very cautious culture that has been encouraged recently, but cheap and dangerous goods cause the most harm to the most vulnerable – that is, the poor, the elderly and children [see Nestlé’s infant formula, when we deal with the “third world”].

Examples:

1(a) 1. Pharmaceutical drugs:

The pharmaceutical industry is one of the largest industries in the world (and much of it is an off-shoot of the oil industry). Drugs are supposed to go through lengthy testing and then trials for safety before being licensed. This of course means that companies who think they have a new drug they could sell have to wait a considerable time before they can make any money out of it. Given the complexity of this field, and the balancing act that companies have to perform, weighing their desire to market the product against the slightest possibility of harmful side effects, it is probably inevitable that there will be occasional errors. However, companies’ reluctance to lose money by withdrawing a drug may cause them to overlook, or even to cover up, findings that suggest a risk. Sometimes this has led to tragic consequences.

For example, recently (in September 2004, according to the Guardian 16/2/2005), “Merck withdrew an arthritis drug, Vioxx, when it showed an increased risk of heart attack or stroke – risks the company is accused of trying to cover up.” (According to the same article, the American FDA (Food and Drugs Administration) announced an independent board was being set up to monitor the safety of drugs on the market, after a number of similar scares).

The Ecologist (April 2005) gives more details concerning Vioxx (from an Associated Press news release): in November 2004 shares in Merck & Co. dropped by more than 7% following The Wall Street Journal’s report that the company knew as far back as 2000 that Vioxx was linked to an increased risk of heart attack, and internal e-mails and marketing materials showed that the company had tried to discredit such evidence.

Vioxx, incidentally, was taken by about 20 million Americans and had produced 11 percent of Merck’s revenues.

Merck now are paying $1m a day to fight court cases, according to Richard Wachman (see Update below).

However, an FDA advisory panel then voted, in February 2005, by a narrow 17-15, that the drug was safe enough to return to the market. Merck’s shares promptly rose by 12% (according to DowJones MarketWatch).

The Ecologist’s comment is: Money Talks…

Update (Feb. 2007):

From Richard Wachman, Observer Business & Media 4/2/07:

A recent survey in US, by accountancy firm PwC, found that drug firms were held in the same low esteem as tobacco firms (even though they are supposed to be saving lives). Reasons:

- in the US, prescription drug prices have rocketed and the most vulnerable patients are those least able to pay.

- all over the world drug companies are in a race with each other to come up with new treatments, and they market them aggressively

- there has been a public backlash after the withdrawal of a number of high-profile drugs because of alleged dangerous side-effects: e.g. Vioxx (see above)

- the PwC survey showed that people believe the companies are spending too much time promoting treatments that are just variations of drugs already on the market, to get profits, but at the expense of useful research

- the reluctance of drug companies to provide cheap HIV drugs to Africa and other developing countries. GSK says it is now doing this, but Oxfam says insufficient progress has been made. Some (western-based) multinational companies are still fighting to protect patents against developing countries that want to produce copies and sell the drugs at prices their people can afford, e.g. Pfizer for Norvas (a blood-pressure drug), in the Philippines; also Novartis for Glivec (a cancer drug which could save many lives) in India.

On Pharmaceuticals in the third world see: Chapter 7 link.

Thalidomide:

The most notorious case of a drug with dangerous side effects was thalidomide. (see Punch 1996) This was a drug developed as a sleeping pill or tranquilliser, and was said to be – and was extensively marketed as - safe for pregnant women. When a dramatic increase occurred in the number of children being born with severe deformities, in a number of countries, it was some time before thalidomide was identified as the cause. Some 8,000 children in 46 countries around the world were born deformed because of the drug (Punch 1996 p 161). In Britain around 400 families had children born with severe deformities. A legal battle for compensation took over fifteen years to resolve, during the course of which the Sunday Times newspaper (in reporting led by Harold Evans – see below) published critical reports on the delay, and was successfully sued for doing so!

In the end it has been established that the manufacturers (Chemie Grunenthal in Germany, Distillers in Britain) either had not done sufficient research, or had even, according to some, destroyed papers that showed the dangers to unborn children. It is also clear that the companies were prepared to fight hard to keep costs (i.e. compensation) to a minimum and to deny liability. Hence the long time it took to sort out compensation for the victims.

Update: Harold Evans writing in The Guardian 15.11.14: http://www.theguardian.com/society/2014/nov/14/-sp-thalidomide-pill-how-evaded-justice

Medicines and class:

It is worth noting that over the counter medicines (OTM) raise a number of issues, and that any problems caused mainly affect the poorer social classes and the most vulnerable. Thus such remedies (along with “cosmetic surgery” procedures) are most widely advertised in the mass-circulation dailies, and are therefore read by the least well-educated part of the population – which is also the class with the worst health problems! On the other hand, members of the middle class who fall ill are more likely to consult a doctor, get a proper diagnosis, and thus avoid taking the wrong medication. This is not only in itself a serious problem, but it is part of a much wider picture concerning the comparative health of different social classes. We will return to this issue when dealing with inequality.

1(a) 2. Foods:

In February 2005 more than 350 products were taken off supermarket shelves as a result of the discovery of an artificial industrial colouring agent Sudan 1 in Worcestershire sauce, which had then been used in other food products. This chemical causes cancer in animals and should not be used for food, and yet it had got into a wide range of food products. Papers described this as the biggest scare since BSE (Guardian 19/2/2005). The Food Standards Agency (FSA) issued a warning, some time after the event, and discussion is still going on as to how this could have happened. It has also raised question as to whether the FSA has enough power to be effective. Two companies seem to be mainly involved here: EW Spice (who imported contaminated chilli powder) and Premier Foods (who produced the sauce).

However, over 15 countries were affected (Guardian 25/2/2005), and it is worth noting that this problem became more serious because of the global nature of food production these days – thus increasing the difficulties for food safety regulators.

1(a) 3. Pesticide residues e.g. in fruit: it is not widely known how many chemicals are used in the production of fruit: overall, some 300 toxic chemicals are in use, including, for example, lindane, which can cause breast cancer. Each fruit may be subject to a number of sprayings, e.g. for Cox’s apples 36 different chemicals are used. A large proportion of the fruit on sale has traces of the chemicals still present, and although producers argue that the quantities are minute and not dangerous, there is a public perception that disagrees – and surely the customer is always right?!

The question of producers ignoring “consumer sovereignty” (see 2 (c) below) is even more clearly illustrated over GM food: consumer resistance has been high (rightly or wrongly), but “agribusiness” hopes for high profits from its development, and has tried hard to persuade the public that it wants it! (see the section on advertising below).

Again, there are many complex issues involved in the question of food. Not least is that we have to watch out for vested interests, even in the bodies which supposedly regulate industry for our benefit. For example, the government Advisory Committee on Pesticides has an independent Chair, but other members may well have links with industry (its annual report gives details of interests of members). After all, where are most of the country’s experts on pesticides to be found if not in industry or academia? Just to make the picture worse, The Guardian 23/3/2005 reports that more than one in ten scientists have been pressurised by a commercial financial backer to “tailor” their research conclusions, according to a report by the Association of University Teachers and Prospect (unions representing staff in HE, government the NHS and charities).

Similarly with the problems discussed above concerning medicine: drug companies need to, and are wealthy enough to be able to, employ expert scientists in their research and development departments. Again, when regulatory bodies, or government advisory bodies, are set up, they are likely to include experts from industry, who at the very least will have a conflict of interest.

For more details on the food and pesticides issue you can, as I did, check out a number of web sites, e.g. the government’s own: www.pesticides.gov.uk/committees (which deals with the ACP), or www.food.gov.uk.

Or, for alternative views: www.pan-uk.org (Pesticides Action Network – gives information, and takes action, on use of pesticides in the third world also), www.foe.co.uk (Friends of the Earth – they point out that meetings of ACP are secret apart from a token annual meeting, and they are pushing for more transparency), www.fwi.co.uk (Farmers Weekly Interactive – gives information on pesticides e.g. that the Co-op has asked for 100 pesticides to be banned from its products), and www.organicfood.co.uk (has news items on the health benefits of organic food).

In books on corporate responsibility and business ethics you will find further examples, such as: aspartame (Shaw and Barry 1995); on car bodies see especially the Ford Pinto case (Hoffman and Frederick 1995).

1 (b) Other practices affecting consumers' economic interests. Elaborating the account in Medawar’s book, these could include:

(i) novelty for its own sake, to sell more goods

(ii) packaging, which can add to the costs of a product, as well as causing wastage

(iii) misleading design of packaging

(iv) obscure “information” on packaging.

1 (b) (i) Novelty: one of the ways producers have of boosting sales is to change a product just for the sake of making it seem like a new product. This is particularly obvious when it comes to such things as toiletries: the more similar products actually are to each other e.g. shampoos are basically a mild detergent, the more advertising has to work to “find” (i.e. create!) differences. What does it matter if your shampoo has orange or apricot flavouring, the detergent will wash it out anyway!

In fact, once the “market” has been saturated, whatever the goods being considered, the same problem arises for producers: how to continue to sell more goods.

Marxists emphasise this point: one of the contradictions of capitalism is its tendency to “over-produce”. That is, even though a given group of customers do not want any more, or cannot afford any more, the producers badly need to go on increasing their profits, since they are continually in competition with each other. Marx believed also that the “rate of profit” would tend to decline as time went on. Even if we do not accept this part of the theory, however, it can still be seen how intense competition among producers has two major effects:

(a) the search for new markets: hence colonialism, or more recently neo-colonialism. Thus tobacco is increasingly marketed in Malaysia, China, and other areas where smoking is neither widespread nor suspected of being dangerous, since sales are declining in more developed countries

(b) some form of destruction, such as in war, so that new demand is created (whilst rival producers are put out of business!). The opium wars are the classic example of this, but any war is a good way of getting rid of resources such as steel, oil, fuel, electrical products – not to mention arms – that then need to be replaced, thus stimulating an otherwise declining economy.

1 (b) (ii) Packaging. On a more trivial level, one can identify a number of “consumer” problems associated with packaging. For a start, many goods are over-packaged, thus putting the cost up, wasting resources and potentially polluting the environment.

1 (b) (iii) Misleading design. Part of marketing is of course to ensure that the design of the packaging helps to sell the product. Often this is tied in to an advertising campaign, and linked to the way that supermarkets display the product. When an advertising campaign is launched (e.g. on television) supermarkets will place the product in an eye-catching location. Colours, shapes and materials can be carefully chosen to make the product seem as enticing and eye-catching as possible – but of course it’s the same product inside! One of my favourite examples is Piat D’or (French wine) which is in a bottle designed to be more curvaceous than the traditional bottle. In the TV advertisement (later withdrawn because it was regarded as offensive) the shape was clearly made to reflect the curves of a woman’s waist and hips. In fact it’s not a very good wine, as far as I can tell, but I believe that the advertising was successful! Another example is supermarket “own brand” goods, most of which are made by well-known manufacturers, but repackaged and slightly reduced in price to increase sales.

Another design trick is to make a container that gives the impression that what’s inside is bigger than it actually is (perfume bottles with thin necks, inside boxes that are much wider than the neck).

1 (b) (iv) Information. There are now many regulations regarding the information that should be displayed on product packages – e.g. cigarettes now (after a long battle with the tobacco industry opposing it) have health warnings on them, and tinned meat products must specify how much meat is included.

What is more problematic is the use of misleading, or simply baffling, information. For example, what do you imagine this is, and would you know what the ingredients are, or what they do? (And bear in mind that the ingredients are listed in order of their quantity, so this is mostly water!):

A "NATURAL" PRODUCT

Ingredients:

purified water

tea lauryl sulfate

lauryl polyglycoside

cocamide mea

fragrance

glycerine

sodium lauryl sulfoacetate

disodium laureth sulfosuccinate

propylene glycol

imidazoudinyl urea

phosphoric acid

sorbic acid

apple extract

clover blossom extract

tetrasodium EDTA

BHT

benzoic acid

sodium citrate

F D & C yellow no. 5, F D & C blue no. 1

Answer: Avon "Naturals": English Orchard Foam Bath.

The Ecologist magazine is a good source of this kind of information, and it warns of the hazards of some of the ingredients as well. In the April 2005 issue, Clairol’s “Nice’N Easy” hair dye is analysed and shown to contain irritants, also ingredients that can cause allergic reactions such as asthma, and potential carcinogens!

1 (c) Sales pressure and getting redress. Another practice that affects the consumer is excessive sales pressures. There are now laws against “pyramid selling”, where salespeople are recruited on the promise of massive incomes if they recruit other salespeople – Amway has a similar scheme, though it has managed to get round the law.

Recently there have been scandals in Britain concerning the mis-selling of endowment mortgages. Up to 5 million people may have been mis-sold these mortgages, ending up with a shortfall when they thought the mortgage would not only cover the price of the house but bring in an extra sum. There is now the possibility of compensation for mis-selling, but inevitably the purchaser has to go through a complicated process to apply. For further details, see the Which? website mentioned below, specifically: www.which.net/endowmentaction/

There have also been (and are ongoing) battles to ensure that consumers can get adequate redress in similar cases.

Another “scam” is the mis-selling of warranties (Guardian Jobs and Money, 02/04/05, p 5): “retailers skim £800 million a year by selling this junk insurance” writes Patrick Collinson, and the government is about to bring in new rules, including 45-day cancellation rights. Some retailers also offer spurious discounts as an incentive to buy a warranty, which may well be totally unnecessary, since you are covered for a year by law anyway by the manufacturer’s warranty; also most electrical goods are now cheap and disposable, or quickly out of date… (Not exactly a “green” argument!).

2. How did this situation arise?

The theory of the “market economy” tells us that when the consumer makes a purchase, a “message” is sent to the manufacturer that their product is sales-worthy, and if there are enough sales, the message is that there is a demand. If products do not sell, in theory the manufacturers get a message that tells them to stop making the products. The consumer is king (or sovereign) according to the theory of “consumer sovereignty”.

So the question arises: when consumers are buying products that they discover do not work, or do not last, or do not do what they should – or simply that they never needed - then what has gone wrong?

As I have suggested before, identifying the exact nature of the problem is crucial if you are going to find the solution that works. So the different suggestions below lead naturally to different proposed remedies.

2 (a) Sources such as Luthans and Hodgetts suggest that what happened in the twentieth century was that products became more and more complex, so that consumers were no longer able to judge what were good or bad. This seems to me to be similar to the argument noted in relation to the nature of historical change – that “new technology” changes society. Whilst there is clearly something in this argument, and it is difficult to assess for example which television set, car or computer is the best, there is also a danger of becoming fatalistic, and arguing that nothing can be done about it – so that we simply have to trust the manufacturers to be honest (!).

Alternatively, consumers have to become better educated (is this feasible with regards to complex products?), or we need an informed impartial advisor (hence the Consumer Association’s advice in Which? magazine).

2 (b) Secondly, Luthans and Hodgetts suggest that consumer expectations may have risen, because we are in fact better educated and have a higher standard of living. This is perhaps a less fatalistic approach, since it is based on the view that we are all making 'progress', but surely it still tends to put the responsibility too much on the consumer: does it mean that we have to lessen our expectations of the quality of products?

Another point that is missed by this outlook is that consumer expectations can be manipulated, as I shall discuss later, by marketing and advertising: simply put, wants can be re-defined by producers or marketers as needs.

2 (c) The most likely explanation, it seems to me and to such observers as Galbraith (1958) is that the producer has become more remote, expert and powerful. We no longer have “consumer sovereignty” but “producer sovereignty”.

With the growth of large firms ever since early in the twentieth century, producers have had to try to influence consumer demand in order to make sure that they can still sell their latest products. Galbraith puts particular emphasis on the cost and time taken in the production process, particularly for complex products (e.g. a new design of car); so that producers are now risking more capital when they turn out a new product. They then inevitably resort to marketing to ensure that there will (still) be a demand at the point in time when the product has gone through design and testing stages and is rolling off the line.

If this is true, then we have not gone beyond the “caveat emptor” philosophy (let the buyer beware – it is up to the buyer to take care to ensure they are not caught out) to “caveat vendor” (let the seller beware – since there are now regulations and laws and power on the part of the consumer to penalise irresponsible producers and sellers). Incidentally, Galbraith’s analysis is not as pessimistic as might seem at first sight, since he believes that a “countervailing power” will always arise to confront the power of the producer.

As so often, then, with this subject, we come to the question of power. We might also note the increasing power of the retailer in the form of supermarkets (for example, Tesco was reported (Observer Nov 28^th 2004) as attempting to censor the covers, and even the content (Observer Business section 27^th March 2005) of magazines before being willing to sell them – something I might add that WH Smith have done before with regard to political magazines.

The question is: should the retailer have any right to “censor” or guide the tastes of the consumer in this way? Aside from moral issues regarding censorship, this is clearly no longer a free market!

We have also noted already how difficult it can be to regulate the power of producers because of the way that they are able to have their interests voiced and listened to. And this may well apply to large retailers, since, for example, supermarkets have “bought” planning permission to set up in various locations by promising to finance the building of roads etc for access.

3. What has happened to improve the situation? (the three waves of the consumer movement).

In response to these problems consumers soon began to organise and a “consumer movement” was formed. Some would say that when this happened, in the 1960s, it provided a “safe” and easier alternative “protest movement” for a disaffected public to support, rather than the then significant anti-nuclear movement (CND) and the anti-Vietnam movement. The “middle class” could more readily identify with protests about the goods they were buying, than with more radical notions of abolishing nuclear weapons or stopping a supposedly anti-communist war!

Be that as it may, I would suggest the consumer movement has, since its origins, manifested itself in three “waves”, each adopting a different posture as it were, and each using different remedies as identified below:

3 (a) “First wave consumerism”: (1960s & 70s)

At first, consumers were mainly “defensive”, demanding their “rights” to buy sound goods. In America President John F. Kennedy summed up the rights of the consumer:

The right to choose,

The right to be heard,

The right to be informed,

The right to safety

This list covers several points made in this section, particularly the right to be informed, and the right to safety. The right to be heard includes the ability to get redress when the consumer has suffered as a result of a purchase, but perhaps it goes further in suggesting consumers should have more of a voice? In addition, the right to choose means having access to a variety of products and to alternative sources, but it is also obviously a statement of belief in the market.

Consumers were clearly getting better educated as well as better organised, since their pleas were heard right at the top in the USA! However, whilst this declaration of rights is fine as far as it goes, it begs the question of how these rights are to be enforced or protected. Later “waves” of the movement would address this issue.

In 1957, the Consumer Association was formed. It describes itself as an independent charity, and its main aim is to protect consumers’ rights, and to inform consumers about products and services. It published a magazine called Which?, and now uses Which? to cover all its activities, which now include legal advice and a website – see www.which.net. According to this site, there are 700,000 subscribers to Which?, and 11,000 members (who play a more active role). It is clear from this that although the organisation has been quite effective, it only reaches a small minority of consumers, and the cost of subscribing is probably a disincentive to many. (Nevertheless, since Which? will not take advertising, it has to pay for itself some way!).

Remedies devised during the First Wave:

(i) Since, during the early days of the consumer movement, much responsibility for action was left to the individual, this meant that it was important for the consumer to become better informed. This strategy has been called adaptation, since the consumer reacts or adapts himself/herself to the specific problem caused at any moment. It is a purely defensive strategy, since it involves the individual simply refusing to buy. (However, this can be much more effective when consumers become organised and undertake boycotts…see (b) )

(ii) This approach also relied on self-regulation by producers (and retailers): as argued already, codes of conduct for business have a pretty limited role, though it can be argued that they are better than nothing. The other factor that needs to be considered when advocating voluntary self-regulation is that it is in the area of marketing that much of the problem for consumers arises. (See the section (b) on the second wave, and (d) below).

(iii) Another tendency of the early consumer movement was to rely on legislation to provide protection. In America the Food, Drug and Cosmetic Act of 1936 followed a scandal in which a drug (sulfanilamide) was introduced without adequate testing, killing 100 people (Hartley 1993, chapter 2).

In the UK there are now many such laws, dating from the 1960s and ‘70s: e.g. on Fair Trading (1973), Trades Description Act (1968), Consumer Credit (1974), Sale of Goods (1979), and the “first wave” of the consumer movement undoubtedly played a part in pressure on government to pass protective legislation.

A Consumer Protection Act was passed in 1998. Nowadays, of course, business is protesting at what it sees as “excessive regulation”.

However, whilst the law no doubt stops much in the way of bad practice it is evidently not able to prevent every abuse – otherwise there would be nothing left by now for consumer advice columnists and Watchdog presenters to discuss! More seriously, the weaknesses of using legislation in such cases should be evident: when the law has not succeeded in deterring a bad practice it takes time and money to pursue a company through the courts to get a conviction. Penalties on companies are often trivial (this is even more significant with regard to environmental protection, as we shall see).

Finally, the legal process has always been complex, and difficult for the “layman” to grasp and get engaged with; and it is getting more and more complex and difficult to use with the increased power of the producer and with the globalisation of production.

Further comment:

It has since become clear, to those wanting to protect the consumer, that the purely defensive approach would not get very far, since the “free market” is not free, and the isolated individual working to protect the consumer’s rights stands on an uneven playing field.

Today it seems that we will have to be increasingly concerned about the quality of goods, labour and services, if the neo-liberal free market agenda is pushed much further. Two examples of the struggle over the future:

The Brussels EU Summit, which ended March 23^rd 2005 discussed a services directive that was going to streamline job regulations across Europe, but was rejected by the French (in response to their trade unions, according to the Daily Mail) and the Germans. It was feared that the proposals would mean excessive liberalisation.

Similarly there has been widespread debate at a global level over the TRIPs [Trade Related Intellectual Property] agreement. If you wish to follow this up, there are many official [i.e. WTO etc} websites now devoted to this, but for an alternative view try: www.actionaid.org.uk where it is claimed that 1.4 billion farmers in developing countries will suffer if this agreement is implemented. This will be dealt with further under the “third world” topic. See: Chapter 7 the Third World.

3 (b) “Second-wave consumerism”: (from the 1960s)

In the 1960s and ‘70s, writers such as J.K. Galbraith described the “bigger picture”, noting how the power of the corporation was a key element in the drive for more consumption and the loss of consumer sovereignty. Thus the second wave saw consumerism as part of a larger question of democracy in an advanced industrial context.

Galbraith’s The Affluent Society (1958) already noted how consumers were being manipulated into dependency on consumer goods (see “The Dependence Effect” in Hoffman and Frederick 1995). He questioned both the advertisers’ notion of consumers with unending wants (see further in (d) below), and the economists’ conventional wisdom concerning consumer sovereignty. In The New Industrial State (1967) he took the position that corporate power had taken over from consumer power and the market, to such an extent that power was now in the hands of a “technostructure” – i.e. groups of technical experts employed by corporations.

Together these experts make decisions affecting production and thereby the direction of consumption and the economy itself. Universities and colleges were in danger of being used by industry to provide unquestioning employees, but the educational and scientific community could and should retain its independence, and together with the “intellectual community” provide a focus to the growing discontent of young people at the new industrial state.

Ralph Nader (more recently a runner in the US Presidential campaign, standing for a “green” agenda) targeted the large corporations such as General Motors, especially with his book “Unsafe at Any Speed” (1965). This exposed the dangers of the Chevrolet Corvair, which was eventually withdrawn by GM, who had to concede that the car, not the driver, was the cause of the many accidents. The courts were used here also, with 150 cases brought against GM, most of which were settled out of court (Hartley 1993, p 16). Nader was subject to intimidation by GM, who tried to pry into his private life (an internal memorandum urged that a detective agency “check his life and current activities.. his supporters.. his friends, his women, boys etc, drinking, dope …”) – but this backfired on GM and only served to help Nader’s cause.

Second Wave Remedies:

The two most characteristics forms of action during the second wave were: (i) the formation of consumer groups and pressure groups (ii) legislation. In addition, the media have continued to play a growing role through advice columns etc.

(i) Going beyond the individual refusal to buy products from an irresponsible producer, consumers have increasingly organised themselves to undertake systematic boycotts. It is easier, probably, to get support for such action when the cause is not a purely self-interested one – thus the boycott of Nestle because of its promotion of infant formula baby milk, has had some success (see Chapter 7 - the third world). Also, with regard to the environment, Shell has been subject to consumer action.

More recently, with the growth of health-consciousness, such companies as Coca Cola have been targeted, though again with the third world in mind. (See The Ecologist March 2005)

The Co-operative Bank published in 2003 an Ethical Purchasing Index, which claimed (as reported in the Guardian 13/12/03), that “£2.6bn worth of spending was lost by companies because consumers didn’t like their record on issues such as the environment or working conditions”. Moreover, in the course of the year 52% of consumers have switched brand or boycotted at least one product because of their ethical belief. And two thirds say they have never returned to the brand they have rejected.

Certainly the most influential action started back in 1985 when two members of London Greenpeace (a group that is independent of the national Greenpeace organisation) leafleted outside McDonalds in London with a list of harmful and irresponsible practices the company was accused of. The two were accused by McDonalds of libel – no doubt in the expectation that they would either be cowed into retracting their accusations, or that the company could easily prove them wrong. In the end Dave Morris and Helen Steele conducted their own defence (they were not given legal aid because of a flaw in English law which is only now (2005) being put right. The trial was the longest in English legal history and several of the “Mclibel two”’s accusations were supported by the court judgement. See www.mcspotlight.org for further details.

(ii) As has already been said (in (a) above), more laws have been put into place to try to protect the consumer, but also during this time pressure has been put on business – especially by pressure groups such as FOE - to ensure that it does comply with the law.

3 (c) “Third-wave consumerism”: (90s to the present?)

In what I call the third wave, connections are being made between different issues. More people are realising that our patterns of consumption affect not only ourselves, but also the environment, animals, and exploitation of workers, especially in the third world.

Moreover consumers are realising that their purchases - or refusals to purchase - can affect the whole way that businesses carry out production. Leverage is being exerted on business as part of a drive for a more ethical approach to business, a new lifestyle, and a way of protecting the environment for our, and our offspring’s future.

(i) The success of The Body Shop (their first shop opened in Brighton in 1976) in selling “natural” products, which are not tested on animals, and are ethically sourced, and environmentally friendly shows how issues can be linked together.

(ii) There is now widespread recognition of the “ethical consumer”: with a magazine, websites etc. You can go to www.ethicalconsumer.org or www.thegoodshoppingguide.co.uk or even www.eatkind.net !

(iii) Ecological issues have become an important part of ethical consumption, and there has been talk of “green consumerism” (see Elkington and Hailes 1988) for some time. To give a further example from The Ecologist (April 2005): hemp is said to be an ideal crop for material for clothing, as it is environmentally friendly and can be grown by small producers in the third world – and The Hemp Trading Company THTC is producing clothes that are fashionable too!

Katherine Hamnett, a leading fashion designer, in the same issue describes how she set out to try to change the fashion industry from within, and has now given up, but will develop her own range of organically produced and ethically supplied clothing.

Further comment:

However, it has to be said that although links are being made, there is little criticism of what seems to me to be the basic problem: that we now have a “consumer society”. By this I mean that our production and consumption are based on disposability and materialism.

(a) materialism – that is, the belief that we can be happy by acquiring more (“having” rather than “being”) – and this, as I shall argue below, is strengthened by the deliberate cultivation of dissatisfaction among consumers.

(b) disposability – tied in with the point already made about “novelty for its own sake”, is the change in attitudes and values that came about at some point in the twentieth century – probably about the time the consumer movement started. Before then, we practised “waste not, want not” – i.e. don’t throw things away, because you might need to have them in the future, when things get difficult again. Goods were repaired and renovated rather than disposed of – and this also required human skills, skills that we have sadly lost. You could argue that disposability crept into our personal lives: how many relationships last for a lifetime nowadays?!

Remedies implemented in the Third Wave:

As suggested, the main activity in this phase took the form of pursuing ethical business or an ethical lifestyle. Although some would see the latter as idealistic, attempts have been made (such as ecological housing) and are continuing (see the environment topic).

Rejection. The more radical approach has questioned the very nature of the market as a basis for the economy – especially when its values become social values.

For recent articles arguing that this is happening see the Guardian article (8/10/2004) by Madeleine Bunting: Doing Business in the Bedroom: “the pervasive values of the market are corrupting not just politics and culture, but also our emotional lives”. Polly Toynbee (Shoppers not Citizens, 1^st April 2005) reports her experience of canvassing in Braintree: voters, she says, think only of “me, me, me”, and politicians have colluded in this by offering “choice” – but a choice of services for us to consume, not a choice between ideals or values. Voters “behave like shoppers not citizens, using the ballot box as their customer complaints department”.

Update: Tom Hodgkinson, editor of the Idler, and author of How to be Idle (Penguin), says:

“Thanks to the unhealthy influence of Benjamin Franklin, the energetic 18^th century puritan who advised young Americans to toil and earn, the US is generally seen as the home of the work ethic, a nation of pushy strivers, slavish corporate men and drab money-getters.

However, there is another America – a slack America, a wild America, and a superb new book called Doing Nothing, A History of Loafers, Loungers, Slackers and Bums in America (FSG Books, US only) by Tom Lutz does a fantastic job of mapping the powerful US literary and philosophical tradition that attacks the industrial system and celebrates pleasure, sleeping under the stars and stepping outside the job system.”

He goes on to mention Jack Kerouac, Walt Whitman, Gary Snyder and others, and quotes Kerouac that we are all “imprisoned in a system of work, produce, consume, work, produce, consume.”….. (possible link here to the social movement notes on youth and hippies…).

(Notes from the Guardian)

Guerrilla action. A recent Guardian G2 article How to be a Guerrilla Consumer by Leo Benedictus, (010405) recommends several ways to get your own back if you are fed up with junk mail, vending machines that don’t work, deliveries that don’t turn up when promised, customer services lines that cannot be found or are very expensive to use (see www.saynoto0870.com ), etc etc. These are useful and amusing (the suggested action if some goods don’t turn up is to arrange another date and then stay out yourself!), but they really only help us to be more effective consumers.

A more radical “rejectionist” approach involves the adoption of strikingly unusual, comic and perhaps surreal actions. I think the most amusing example is The Yes Men (www.theyesmen.org), who caused a storm in 2004, when they acted the part of Dow Chemical representatives on the BBC and promised (on the 20^th anniversary of the accident) that the victims of Bhopal would be generously compensated. (See on the environment). This was probably not an ideal action, as victims in Bhopal heard about the “promise” and had their hopes unnecessarily raised, but check out the Yes Men’s own views on this!

The Yes Men say that they are practising a kind of “identity theft”, (but quite the opposite of that currently in vogue amongst petty criminals) that is, taking the identity of leading criminals (i.e. the heads of large unethical corporations) in order to bring to light the true nature of their activities. Their first “hijink” involved attending a WTO conference in 1997 and making a speech (taken quite seriously by the audience) to the effect that in the interests of the free market, the siesta in Spain should be abolished!

Less striking but in the same vein is the Reverend Billy, head of the Church of Stop Shopping (www.revbilly.com).

Finally there are regular “buy nothing” days as part of the anti-capitalism movement (www.adbusters.org). The “adbusters” are interesting in themselves, as they take direct action to alter advertisements in order to show their true or hidden meaning…

This leads me to my final point!

(d) An extra word (or two!) on the role of marketing and the market:

Ever since advertising was first developed as a sophisticated tool, it has had its critics. The economist J.K. Galbraith (1958) commented on “the affluent society”, (see the extract: “The dependence effect” in Hoffman and Frederick (3^rd edn. 1995) p 387), and Vance Packard (1959) goes into the inner workings of advertising, especially its reliance on the newly-developed “depth psychology”. Thus researchers found out that people who enjoyed eating chocolate felt guilty about it, so they recommended that manufacturers produce small size pieces.. an After Eight advertisement actually used the expression “unashamed luxury” based on this psychology.

As the notes below argue, what is crucial to our economy is the stimulation of never-ending “needs” in order that consumers go on buying. Thus, each advertisement or marketing campaign exists in the midst of a constant bombardment of other advertisements, and is reinforced by this context.

As an indication both that business is fighting back against some of these criticisms, and to how subtle the techniques being used in marketing are, notice some fairly recent strategies that have caused controversy: BAT (one of the world’s largest tobacco producers) funded a “breast cancer awareness campaign” – this must help give an image of a caring company! Cadbury has been helping kids to buy exercise equipment, for schools…

Several writers have observed that it is not just a question of individual consumers being persuaded to buy things they don’t need, but what is happening is the shaping of a particular kind of individual and a particular kind of society:

Lippke (1989) argues that individual autonomy – the ability to make our own choices and have our own beliefs and values – is being undermined.

Naomi Klein (2000) portrays a world in which corporate logos and brands – a natural development of advertising techniques – are taking over our lives. “Brands” are incredibly valuable now: the product may be rubbish, but provided the company that makes it has a brand that is trusted, the product will sell. Even politicians are now being “branded”, and elections are won or lost by skilful marketing.

The argument (update 2015) over packaging of cigarettes – between those who want plain packaging, and those who want to keep the brand differences – shows up the importance of brands: for why resist the change if the packaging doesn’t influence anybody? In an article by Rachel Cooke (25.01.15 The Observer) there is a description of a television programme (Eat well for less? Presented by Greg Wallace) which filmed people consuming things whose brand had been hidden. The clear conclusion was that an item (jam, butter etc) was preferred if the packaging was more attractive.

Madeleine Bunting (2004) argues that the values of the market spread into our personal lives: what matters to us in a relationship is what we can get out of the other person. Not what they are. (This echoes Marx and Engels in the Communist Manifesto: what binds us together now is no longer, as it was in feudal times, loyalty, respect and duty, but “the naked cash nexus”: what another is worth in cash terms to us!).

Some critical thoughts on advertising:

1. Advertising works at the subconscious level, and it is a vast industry where the most original methods of advertising have the most success.

At the subconscious level, adverts suggest an “association” of a product with a real psychological and/or emotional need, so that when you purchase the product you satisfy that need, e.g.:

Security Reassurance Strength

Competence Respect Affection

Sex-appeal Value Intelligence

Role models Group identity

But of course the product may have (most likely has) nothing to do with the psychological need e.g. a new kitchen and security.

2. People buy “satisfactions” of these psychological and emotional needs, by buying the products associated with them. People buy to satisfy needs, not (just, if at all) in order to use the products.

The products then become “needs” in themselves, in two ways: we need the product and we need to have the emotional or psychological satisfaction it promises. Rather than dealing with the emotional need itself – that is, with “how we are” – we are encouraged to buy something!

We have been persuaded to believe in having rather than being (Fromm).

3. (a) most psychological needs cannot be satisfied by buying things, and (b) if a product does “satisfy” a psychological or emotional need, it can only do so temporarily. Either way, (c) endless psychological needs can be created.

To keep the consumer buying things, adverts create new “needs”, i.e. new products which, it is claimed, will make you a better person. They have to go on doing this because (a) the real, underlying, needs have not been satisfied or (b) advertisers have convinced us that previous needs were met by buying the previous product/model, so they identify new needs to be met, or (c) they try to convince us a new product will do the job better! And above all: (d) the real aim anyway is to sell new products.

4. To further motivate people to buy, the device is used of creating envy – envy of those who have, not the product, but the satisfied need (see John Berger reference).

5. Note, to further illustrate all this, how marketing speaks of “penetrating” or “pulling over” consumers or market “niches” (groups of consumers).

6. The argument that people have different wants, and advertising gives us choices is belied by the fact that what we consume is put before us by the producers, who persuade us we need it; and we all have to consume.

7. Advertising also reinforces social and political values, (not just personal wants/needs) - which we then feel we should believe in, and defend.. It therefore helps to create a particular kind of society; it is an important part of the “self-construction” of a society based on:

Power, Property, Individuality, Competition, Consumption….. .

8. Once the problem of the consumer is located at this level, discussions of the powers of the Advertising Standards Authority become pretty meaningless. And the ASA is only a self-regulatory body anyway: it is made up of members of the marketing profession and has no legal powers or sanctions.

References and Reading List:

See also: csrbooks.htm

Berger, J. (1972): Ways of Seeing (videos and book), Penguin (1995 reprint)

Bunting, M (2004): Doing Business in the Bedroom, The Guardian (see www.guardian.co.uk)

Clark, E. (1988) The Want Makers, Guild Publishing

Elkington, J. and Hailes, J. (1988): The Green Consumer Guide, Gollancz

Fromm, E. (1995): To Have or to Be, Continuum

Galbraith, J.K (1958): The Affluent Society, Penguin.

Klein, N. (2000): No logo, no space, no choice, no jobs; taking aim at the brand bullies, HarperCollins

Lippke, R (1989): in Shaw and Barry 6^th edition 1995, 521-527, Wadsworth

Marx K., and Engels F. (1848): The Communist Manifesto, Penguin

Medawar, C. (1978): The Social Audit Consumer Handbook, Macmillan.

Nader, R (1991): Unsafe at Any Speed, Knightsbridge

Packard, V. (1959): The Hidden Persuaders, Penguin

Links:

Back to: Chapter 4: The Workers

On to: Chapter 6: The Natural Environment

Back to: CSR in Context Contents Page

Back to: Imagining Other Index Page