Did you know that there is a World Consumer Rights Day?    Here’s a hint:  it follows National Consumer Protection Week.   I’d love to say that I’m making this up,  but you can’t make up this stuff.     This year, on World Consumer Rights Day,  a non-profit group called Consumer International  issued a report about the state of consumer rights around the world.    (CI is an international organization largely comprised of government and non-profit consumer advocacy organizations).
The organization polled 70 consumer groups in 58 nations about the state of consumer protection in their country.  It’s not pretty.   The findings show a general lack of of government attention around some of today’s most pressing consumer rights issue.   Any laws that did exist are largely under-enforced.    The details are contained in the CI report, if you are brave enough to read it.
Interestingly, the report suggests that consumer protection is fairly alive and well in expected countries like the U.S., Australia, Britain as well as more surprisingly places like, Cyprus,  China  (that’s not a typo) and Brazil.    What were some of the issues being observed on World Consumer Day?    The big ones are:
  • Food Safety
  • Internet-based protections
  • Consumer education
  • Avenues of redress  (availability of courts, enforcement of laws, transparency etc)
  • Disclosure of environmental and energy impacts of appliances.
Their overarching concern is that  modern consumer issues – such as digital rights, environmental impact, and corporate responsibility – are not being adequately addressed by governments.     The CI list got me thinking about consumer rights in the U.S. and the pressing consumer issues that we face.     My list is a bit different that CI’s list:
  • Income and opportunity inequality
  • Corporate accountability to its customers and employees.
  • Corporate influence in legislation   (e.g. lack of campaign finance restrictions)
  • Over-reliance upon industry self-policing , especially in financial, food and drug safety, and environmental matters.
  • Absence of point-of-sale consumer disclosures.
  • Mandatory arbitration clauses and the secrecy that surrounds arbitration decisions.
Which leads to me the bigger question which is:  why is consumer protection important?    My answer is that fairness in the marketplace is the embodiment of everything that matters in America.  I grew up thinking, and still believe, that America is founded and grounded in the ideas of community, justice and equality.   These lofty goals were ideals that we were taught in school and were allegedly the engines that drove us to independence.
During the past 5,000 years, humans have experimented with all forms and flavors of political and economic systems—Socialism, Communism, Totalitarianism, Statism, and Capitalism.  But as the Information Age replaces the Industrial Age, it’s becoming clearer that Capitalism is the flavor of choice amongst most of the world’s developing countries.
While Communism and Socialism have their attractive points (such as giving greater weight to equality and community), they haven’t really worked out very well in practice. Hamstrung by cronyism and inefficiencies, these systems are losing out to a Capitalism system that emphasizes the individual pursuit of wealth. This system—our system—isn’t terrific at strengthening community and equality, but there’s no doubt it leads to significantly more efficient trade and production than the competing “isms”.
As a result, Capitalism is currently on top of the standings. Let’s hear a cheer for the home team! Hurrah! However, that shouldn’t blind us to the fact that it’s an exploitative process in which there are winners and losers. When you rob Peter to pay Paul, as our system so often does, Peter is diminished. And when everyone looks out for No. 1, the whole community is diminished.
In theory, it isn’t supposed to work that way.   Of course, in theory, all disputes can be resolved by logic, happiness is a state of mind and child actors can become well-adjusted adults.   Theory is nice that way.  It is very neat and tidy.    But the last 200 years has shown us that economic theory is messier than the average teenager’s bedroom.  Ironically, money is one of the things that keep fouling up the works.   It corrupts, it corrodes and it complicates.
For better or worse, Capitalism is an engine that runs on a fuel of money.   But the fuel doesn’t just stay in the engine – it spews out all over the place.   As a result, our shiny, highly efficient economic system has belched money in all directions, polluting almost all of our society’s institutions. As a result, our lives are entwined with some of capitalism’s less noble emissions.
For example, our system of government is supported by campaign contributions that allow it to be dominated by those who have a lot of money. So much so, that our politicians appear to be bought and sold by the wealthiest bidders.  O.K. perhaps not my politicians, but definitely your politicians. Some countries have sought to offset this flaw by imposing strict campaign limits or requiring public financing of campaigns.  The United States has been reluctant to embrace such reforms.
Our system of justice, perhaps the one that we hoped would be most immune from financial influence, was exposed by O.J. Simpson’s “Dream Team” for what it really has become:  a forum where money affords better justice.   If you can’t buy a judge  (and that is debatable), you may be able to buy justice through the use of high-powered attorneys who wear down opponents.   One reason why insurance companies are deeply resented by anyone who has tangled with one in court is that their legal firepower will tie up almost any litigation for as much as a decade.   Anytime I bring a legal action against a large corporation, I assume that the case will take from five to seven years.  That’s not because of foot dragging by the courts as much as the willingness of the companies to use all available tactics to delay and complicate a legal or regulatory action.
Our educational system, also designed to be immune to capitalism, is anything but.  The correlation between wealth and educational opportunity is undeniable.   Higher-education costs have skyrocketed in the past 30 years, subverting the expectation that a college education would be available to all.    And many of those who are able to graduate from college face at least 10 years of indentured servitude to pay off the Mt. Everest of college loans that they’ve accrued.
And the way we get information is also effected.  The early-20th Century dream of an unbiased news system has given way to the reality of 21st Century “infotainment” controlled by media mega-oligopolies.   The Internet, which also promised unfettered information, has been similarly tamed by Capitalism, much to the chagrin of its founders.
So each of our social institutions has been shaped by the influence of capital.  While community and equality may be important, they end up being shoehorned into a system that is, at best, tolerant of community and equality and, at its worst, downright hostile.
It was not supposed to be this way.   Adam Smith, a philosopher often regarded as the founder of the modern political economy, included a commitment to the principles of equality and community.  Although Smith’s name is often invoked by laissez-faire ideologues, the truth is that Smith worried about the role corporations played in a Capitalist system. He feared their access to capital and their lack of accountability would lead to abuse of power.   If he were alive today, he’d no doubt be pained by the exploitation of individuals or classes of persons without ready access to capital or knowledge.
One thing I’ve discovered during my 30+ years of consumer advocacy is that when individuals attempt to deal with large companies they find that “negotiations” are often stacked against them.   Those with money enjoy preferential treatment and access to better information.   Those without it are stripped of self-esteem in the belief that this dressing down will motivate them to achieve.    Capitalism works, so long as the rules are enforced and information is not controlled.    And those two aspirations, my friends, may be our greatest challenges in the coming decades.