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April 17, 2008
The Goal Is Consumption
Don Boudreaux
I sent this letter a few days ago to the Washington Post:
Emily DeRocco complains that "The April 9 Business article 'Don't Blame NAFTA for Downturn, Many Economists Say' quoted politicians, economists and labor representatives but not a single manufacturer - those at the heart of this wrenching debate" (Letters, April 12).
She's mistaken. Those at the heart of this debate aren't manufacturers (or politicians, economists, or labor representatives). Those at the heart of this debate are consumers. Or, those at the heart of this debate should be consumers. Unfortunately, consumers are too large in number and too disparate in interests to organize effectively for political purposes. The result is that consumers' interests in trade discussions are largely ignored, even though an economy's success is measured not by how well that economy satisfies the wishes of producers, but exclusively by how well, over time, it satisfies the demands of consumers.
Sincerely,
Donald J. Boudreaux
Producers exist to satisfy consumers; production is the means and consumption is the end. Protectionism is a policy built on the premise that consumers exist to satisfy producers.
Posted by Don Boudreaux in Myths and Fallacies, Trade, Work | Permalink
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Comments
How will consumers consume if they don't have good, HIGH-paying union manufacturing jobs?
/muirgeo
Posted by: FreedomLover | Apr 17, 2008 12:07:14 PM
Funny how when the discussion moves to mergers...the number one concern is then consumers. What a double standard. For all practical purposes, there's really no difference in the final analysis.
Posted by: John V | Apr 17, 2008 12:55:59 PM
IOW, the government would worry about consumers when 2 airlines out of many want to merge even though they have little to no solid grounds to even determine the effects of such a matter but they don't bat an eye to truly hurt consumers when it comes to protectionist policies.
Posted by: John V | Apr 17, 2008 12:58:29 PM
Isn't that amazing? Bureaucrats need to regulate, and politicians need to placate. Those are about the only two things they're good at. That and getting each other into office.
Posted by: Gamut | Apr 17, 2008 2:12:58 PM
This is a great point.
I think I read it in a recent book on Globalization.
Posted by: Gil | Apr 17, 2008 2:51:42 PM
Whoa! Gil, you're a consumer advocate. Now if we could just get past a few other hurdles in our way toward progress in this discussion.
1) that consumers have sovereignty and do not have their arms twisted to make purchases (this includes such needs as gasoline, health care, and forms of critical insurance). There's always choices and tradoffs to be made(TANSTAAFL).
2) that businesses that employ people are the consumers of employee labor. Business therefore should have sovereignty as they are the consumers of labor services and the employee is the seller ij the transaction.
3) regulations/legislation that make things more tough on businesses without providing benefits to outweight the damage just seek to add to the cost of doing business and therefor are passed along to the consumers. Feel-good legislation costs everyone but the lawyers who specialize in earning money while other non-lawyers are not cooperating (being adversaries).
Three concepts are enough for now. We may do more as the learning curve seems to be progressing.
Posted by: LowcountryJoe | Apr 17, 2008 5:54:25 PM
Don-
I believe your last sentence is my quote of the day.
Well said.
Posted by: Matt C. | Apr 17, 2008 10:34:24 PM
Still, how can we survive strictly as a consumerist society? We need manufacturing!
Posted by: FreedomLover | Apr 18, 2008 1:15:59 AM
Stuff still gets asembled here and we've not strictly ceased all manufacturing -- we still manufacture plenty but just do it with less people than before. Plus, jobs in the distribution of goods made from afar seem to pay pretty well.
That was sarcasm, right FL?
Posted by: LowcountryJoe | Apr 18, 2008 6:31:33 AM
I'll take the last TWO sentences as my quote of the day. Very well put, Sir.
Posted by: piperTom | Apr 18, 2008 11:10:54 AM
Producers exist to satisfy consumers
Producers produce because they are consumers as well, and in the market they produce in order that they may trade for what others produce.
Everyone is a consumer, producers are a subset of that group.
Posted by: Sam Grove | Apr 18, 2008 12:38:22 PM
Sam:
Technically if one is able to live completely self sufficiently off the land, make one's own tools, they might not be called a consumer. But other then that non-existent case, yeah everyone is a consumer, including corporations.
Posted by: FreedomLover | Apr 18, 2008 4:09:34 PM
Technically if one is able to live completely self sufficiently off the land, make one's own tools, they might not be called a consumer.
Technically, from an economics analysis, but in reality, such a one will direct a large portion of his activity towards providing for his consumptive requirements.
including corporations
But what are corporations if not collections of people?
Posted by: Sam Grove | Apr 18, 2008 4:41:47 PM
Egads! There's another Gil!! I didn't post that comment. :0
(Evil Gil)
Posted by: Gil | Apr 18, 2008 11:09:29 PM
Trolls: they're all alike but only the names change (or not).
Posted by: LowcountryJoe | Apr 18, 2008 11:59:09 PM
There's too much consumin' goin' on.
Posted by: FreedomLover | Apr 19, 2008 6:29:14 PM
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