The Sovereign Consumer

One of the most significant features of the free market is in the sovereignty of the consumer.  Ordinary people decides for themselves what they will consume and undertake the effort necessary to produce or obtain it.   And so it follows that "the mass" of the mass market is not a collective that makes decisions collaboratively, but an amalgam created to give observers the mistaken sense that a group of people do not function as individuals.

Hence "the market" is an observer's perspective upon the ways in which individuals produce, consume, and trade with one another - each by their own volition, though often voluntarily imitating the behavior of others.   Each person decides what he wishes to consume, what he wishes to produce, and with whom he will engage in exchanges of his product for the product of others.

Institutions such as corporations are merely a method by which people organize their productive activity in response to the demands of other people for things to consume.   The demand of consumers creates the market for goods, and suppliers attempt to satisfy that demand.   In that sense, the corporation serves the consumer, never the other way around.

It is in this sense that the worker has charge of himself, which is to say he has authority over his own choices rather than being subject, serf, or slave to an authority who makes all of his productive and consumptive decisions for him.   In his consumption, he gives incentive to others to produce for him by offering financial reward.  In his production, he is servant to others and must produce that which they desire in order to gain what they wish to pay him for producing it.   From this perspective, it is clear that all revenue of producers is granted to them by consumers in exchange for service.

The capitalist, who uses his wealth to generate more wealth, is a servant to the market: he can only increase his wealth by delivering what others demand at a price they are willing to pay.   Granted, there is opportunity for the cheapskate ad swindler to take advantage by means of deception - but this cannot be done consistently and sustainably.   The capitalist who fails to actually satisfy the desire of a market will exhaust the supply of gullible customers.

Such a system is based on the presumption of rational thought, but has the flexibility to accommodate the irrational.   A consumer who spends unwisely and does not obtain what he actually needs will soon learn from his mistake, and a producer who invests unwisely and does not make what is actually needed will likewise learn.   Poverty and bankruptcy are the ultimate ends of unwise decisions, but both are temporary rather than permanent conditions for the individual who is capable of learning.  Said another way, the freedom to decide for oneself comes with the responsibility to decide wisely or bear the consequences. And ultimately, to accept such a system requires a basic respect for one's fellow man and his right to be his own sovereign.

Brand, Identity, and Belonging

I read an interesting bit about the (poor) state of individual and cultural identity in the present age.   The author asserted that the mass media, and particularly the Internet, creates a disjointed sense o culture that causes people to be “virtually connected but emotionally detached” from the rest of the world.

The premise is that individuals identify themselves in reference to a common culture to which they conform in some ways and deviate in others, but a culture is created by the isolation of one group of people from another: because rivers and mountains separate two tribes from one another, they develop independent cultures – and because these barriers have been overcome by technology, there is no way for a people to be isolated enough to form a distinctive set of beliefs.

Moreover, culture is intentionally cultivated.  In pre-modern societies, there was always a group of people (the ruling class and the clergy, generally) who made cultural decisions for all their people – they encouraged conformity and punished transgression against a set of cultural norms.   And while this notion is objectionable to the modern individualist mentality, it served its purpose: without a guide, people do not know where to go, culturally speaking, and fail to develop a common core of cultural standards.

It is not that no-one is attempting to control culture – politicians and religious figures are still attempting to tell people how they ought to live and using carrots and sticks to cajole and threaten them.  But there is no longer unity – an individual is assaulted by several ideologies that pull him in different directions.   He must make a choice, but is ill-equipped to make that choice.

The author then turned on the commercial sector, suggesting that advertising and marketing is a relatively new voice that attempts to tell people how to live their lives.  While their intent is to sell a good or a service, the consumption of that product is dependent on the consumer’s lifestyle, which is to say their culture.  So in an indirect way, brands attempt to control culture.

But if there are a few dozen political and religious ideologies attempting to control and direct our lives, there are tens of thousands of brands attempting to do the same.   And the result is again that those who attempt to control culture have no control at all: people must choose which brands they adopt, in the same way they choose their political and religious beliefs.  There is no ability to “force” a person to accept one rather than another.

So the result is a cultural chaos in which, rather than being constrained by an individual or collective that determines what choices people make, we are left instead with many that suggest what choices we might make, but are left without clear guidance as to which choices we ought to make.   Each person makes his own decisions about what to believe, and what culture to adopt for himself, creating a cultural chaos.   

The dystopians got it wrong: the horror of the present age is not invasion of private life by centralized control and constraint, but an abandonment of control that results in an overwhelming and directionless freedom of choice.

The plethora of choices of products that have the ability to solve our functional and psychological needs is mind-boggling.   And once a product decision has been made, tenuously and with great anxiety, there is then the choice of brand.   Naturally, every brand wants us to believe that it is the right choice, but has mercenary motives and is unreliable and lacks credibility.   And those who would help sort out the mess are often guided by their own agendas, and are no less trustworthy.

Neither are the independent voices particularly authentic.   We hail social media as the democratization of opinion, and suggest that people trust their peers more than those who claim to have authority.  But it’s been found that most participants in social media have nothing original to say, and are merely parroting what they have heard in the mass media.

Now more than ever, culture requires an individual to think carefully and to make choices.   And now more than ever, individuals show a stunning inability and unwillingness to do so.   And this is the tragedy of the modern age, for consumers and brands alike.

Multi-Collectivism

I listened to a presentation about cultural marketing that focused on the ways in which marketing in an individualistic culture differed from marketing in a collectivistic culture – it was a bit of a meander that ended in a shrug, and I do think the presenter got a lot of things wrong, but it gave me some food for thought.

Primarily, the classification of cultures as either individualistic or collectivistic is completely wrong-headed.   It sets up a black-or-white fallacy that leads binary thinkers to assume that a culture, or even a person, is 100% one way or the other when in reality there is a spectrum: a person, and an entire culture, has elements of both.  

That is, a consumer makes some product or brand choices according to his own standards, but in other choices he is highly concerned about being acceptable to others.   Particularly when a product is conspicuously consumed, the impression others will have is often more influential than the value it provides to the consumer himself.   I could elaborate further, but the case is very well made by Kapferer and Bastien.

But the greatest flaw of the argument is in characterizing individualistic cultures as concerned with personal status – this is, in fact, a quality of collectivist cultures, because status is a social phenomenon.   One only has status relative to the status of other people in a group (collective), so the desire to be as good as others, or better than others, or similar to others, or distinguished from others – all of these desires use “others” rather than “self” as the measurement.

An individualist pursues his own interest, indifferent to what others may think.  A collectivist is highly concerned about what others think, and makes his choices accordingly.   The desire to have possessions that provide comfort and pleasure is individualistic, whereas the desire to have possessions that impress others is collectivistic because the primary motivation for the consumer is what others think of him for consuming them, not any direct personal benefit of consumption.

This is because a collectivist is concerned with his status within the collective: keeping up with the Joneses does not serve any individualistic motive, but instead considers a person’s position in a collective and seeks to preserve personal status in the context of a collective: the consumer isn’t concerned with his individual needs, merely in conforming to the standards of the social group to which he belongs (or aspires to belong).  The desire to make an impression is primarily focused on what others think, not on what one truly is.

Even in western culture, true individualists are very rare – not many people think for themselves, have formulated a set of personal standards and act in ways that pursue them.   I would argue that what we have is instead a form of multi-collectivism in which a person seeks to gain and preserve their personal status in the context of multiple collectives.  

In monochromatic cultures, where all people are of the same ethnicity, religion, and so on there is a single set of rules and it is easy to see how people conform to them or consciously break the rules to obtain increased status.  In multicultural environments, such as western culture is today, a person’s choices consider not one set of rules, but many sets of rules that are often in conflict.   To be in good standing with one’s neighbors, with one’s colleagues, with one’s religion, with one’s class, with one’s ethnic group, and so on means compromising among many sets of conflicting standards.

As such a person may appear to be an individual because they assemble a highly idiosyncratic rule-book that works out compromises between the conflicting rules of the various collectives to which he considers himself to belong.   But his primary motivation is still extrinsic: when he chooses not to follow a rule, it is not because he has a personal standard, but because he has chosen to obey a conflicting rule imposed on him (albeit voluntarily) by a different collective.   This is not at all the same as individualism, which ignores all the rule-books entirely.

As such, one cannot state that people in western cultures are highly individualistic – they are highly confused, perhaps, but their primary motivation is to conform to the standards of multiple collectives.   As such, collectivistic marketing tactics will still work, but it is much more difficult to accurately identify the collectives to which an individual seeks to belong, and determine which rule of which collective takes precedence in his buying decisions.

The Rationality of Irrational Choices

The choices that people make are by necessity rational – each choice follows some course of reason, even if that reason is flawed or inappropriate.   Except for simple reflexes, all of our actions are undertaken in response to a choice to pursue the satisfaction of some desire.

Very often the term “irrational” is simply used by those who, being vain and arrogant, presume to pass judgment on other peoples’ aims and volitions.  No man is qualified to declare what should make any other person happier or less discontented.  We may assume that others seek the same ends as ourselves, and can assess what we might do were we to exchange places with another – but to suggest that others should act in a manner that reflects our own will and aspirations is merely contempt and manipulation.

Another basis for the accusation of irrationality is that every action accomplishes some things at the cost of others.  A person who seeks to obtain something of little value at the cost of failing to obtain something of greater value is not irrational, but his reasoning may seem flawed.   But again, the decision of what things matter more than others is essentially a decision each person must make for himself.   If we judge the action of another to be irrational in this manner, it is often because we have different values and, again, arrogantly assume that anyone who does not share our values is mentally compromised.

Consider the debate over whether it is better to live in wealth or in poverty, or the choice we make in the face of any opportunity to exchange our self-respect and dignity for some material gain.  The choice an individual will make is a reflection of his values.

It is even arbitrary to consider the satisfaction of the body’s physiological needs to be of the highest order – the man who risks his life for an ideal is by no means irrational, and who says that he is so fails to understand the values of a person who would make such a choice.

When the intended goals of an action are understood, then a course of action may be considered in light of its effectiveness and efficiency at achieving that goal.  That is, the “right” action achieved the greatest degree of success with the least effort.   But because man is not omniscient, omnipotent, and infallible it’s generally witnessed that the course of action he chooses to pursue is flawed and often quite poorly considered.  But again, this does not mean action is irrational, merely imperfect.

Thus considered, the only truly irrational behaviors are reflexes, a response to stimuli that cannot be controlled by the volition of the person concerned.  Even the actions of an insane person are based on reason, albeit a perverse and ill-conceived form of reason.  As to insanity, maintaining the expectation that others will pursue the outcomes and follow the reasoning that we feel they ought to, rather than acknowledging they can and will think independently and follow a course of those of their own choosing, reeks of egomania.

Ultimately, we must act the subjectivity of human action, and acknowledge the right of each person to make his own choices.  The degree to which anyone may pass judgment is in assessing whether the course of action chosen was effective in achieving the desired outcome – and refrain from presumptions of being a fit judge of what is useful for others and what will make them the most happy.

Choice and Action

Human action is purposeful - it is always preceded by a choice.  There are very few things that can legitimately be said to have been done accidentally.  A reflex action that takes place in less than a second may be truly accidental - but this is highly uncommon.   The majority of actions are undertaken willfully.

This is not to deny the existence of unconscious behavior, merely to consider action as a subset of human behavior - that which is conscious and deliberate. However, it must be accepted that very little behavior is unconscious - any behavior that lasts more than an instant is deliberate.  Nor is it to state that "action" by this definition is always the result of direct thought.  Much of what is misrepresented as "unconscious" action is in fact inattentive action - a person makes a choice to focus attention on one thing and pay little to no attention to anything else.   The negative consequences of these actions are the result of the choice not to give attention to the consequences.

Even a person's deliberate action may be undertaken with only a vague notion of the end he wishes to achieve, such that the things that he does may be intended to achieve it, but entirely incapable.  Said another way, a random and stupid action is still an action and to suggest it is unconscious or unintentional is merely a weak attempt to escape blame for having chosen to behave in such a way.

Man's deliberate actions are undertaken to control himself and influence the environment.   There are certain limits to the power of man to exert influence - but these are not as limited as some may assert.  That is, a man cannot stop himself by force of will from falling ill, but he can stop himself by force of will into entering into an environment that is likely to make him so, and he can stop himself from remaining ill for long by taking the necessary actions to restore his health.

Psychology seeks to discover the motivation of man to act, and this approach considers actions to be rational when they are beneficial, or at least benign, and irrational even to the point of insanity when a man intentionally undertakes actions that are detrimental.   But psychology itself is a projection of vanity and tends to be false.  An individual who is asked the reason he took an action tends to suggest noble motives, whereas an analyst who attempts to find a "hidden motive" is generally following his own desire to prove a cause.   This is hardly scientific, and while it is better than nothing at all, it is often quite inaccurate.

Action is not a wish or an intent, but the consequence of wishes and intents.  A person may consider doing something and then not do it, or may find that selecting a given course of action eliminates our ability to take others, at least for that time.   Action is only that which we actually do, not what we intend.

In a similar sense, the outcome of action is the actual results and not the results that an individual wished to achieve.   Ethics may forgive mistakes in consideration of good intentions, but praxeology does not mitigate: what happened is exactly what happened and what resulted is exactly what resulted, and imaginings or rationalizations are moot.

To do nothing is not an action, but merely a choice not to undertake action that might have achieved results is a choice to abstain.  It does not, as some would suggest, cause an absence of what might have existed were the individual to have undertaken the action, as nothing that had ever existed is destroyed by the failure to create it.

And one final thought: to say that action is a manifestation of man's will does not mean that his will was not constrained.   A choice to "do or die" is still a choice to do (to avoid the choice to die) and is based on the assessment of the likelihood of the suggested consequence.  It is again in the sphere of ethics to define the "goodness" of an action that is taken under compulsion.  Ultimately, accepting compulsion and obeying the commands of others is a demonstration of will and not the absence of it.