The Free Market 20, no. 2 (February 2002)
Consumer protection regulation is the consumer’s worst nightmare. In fact, it is not protective at all. It is merely another one of those regulatory rackets that has the appearance of providing necessary security for a collective group in an entirely positive sense while encompassing no negatives. After all, how can anything entitled “protection” have a downside?
In spite of its name, consumer protection regulation consists of one primary negative—the growth of the State. All other negatives fall out from this, and any positive elements are lost in the bureaucrat-controlled statism that rules the consumer’s existence.
The politics of consumer protection purport to have the interests of an uninformed consumer as the basis for its existence. This shakedown flourishes under the guise of proper dissemination of information to the buying consumer, and securing safety from dangerous products and services. However, these regulators use the very tool they purport to fight: the use of misinformation.
The proponents of consumer protection regulation falsely assume no individual knowledge is at hand, nor can it be readily obtained. The premise is that some collective group of so-called experts (read, bureaucrats) is necessary to gather information, empirically analyze it, and distribute the results to an accepting populace eager to follow their edict.
The truth is, when purchasing any product or service, the consumer is the one most capable of making the decisions affecting his needs, and the products that best suit those needs. No amount of regulation from federal, state, or local bureaucracies can guide him at the intimate level of knowledge he has at his own disposal.
The consumer thought process, essentially, tends toward building a hierarchy in which information is to be processed, analyzed, and acted upon. The more value that is placed on the information to be amassed, the more willing the consumer is to expend the costs of obtaining that information. As Austrian economist F.A. Hayek argues, “the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.”
However, the regulatory bodies that make and enforce rules in the marketplace infringe on the rights of the individual to ascertain those products that best suit his needs. These regulatory bodies take over the information-gathering processes, and their regulations make it impossible for the consumer to have the primacy of decision making as to what goods or services to sell, buy, or trade, because quite often, regulations do not allow for the unhindered production, distribution, or availability of desired goods.
The Federal Trade Commission is the chief controller of all things bureaucratic in the land of consumer goods. Its mission statement says it “seeks to ensure that the nation’s markets function competitively, and are vigorous, efficient, and free of undue restrictions.” In addition, the FTC claims “the Commission’s efforts are directed toward stopping actions that threaten consumers’ opportunities to exercise informed choice.” Of course, these are only small snapshots that make up the bigger picture of the tyranny the FTC has lorded over businesses and individuals, from buying and selling to antitrust follies.
Looking at the FTC’s Consumer Protection website, one can find a protuberance of “consumer education” bull roar like, “Holiday Shopping: Is a Sale Price Your Best Deal?”; “More Than Once Upon a Mattress: Used Bedding Labeling Rules”; “How to Buy Genuine American Indian Arts and Crafts”; “Buying a Washing Machine? It’s a Loaded Question”; and, well, you get the picture. Apparently, we’re all a bunch of imbeciles who bequeath to Big Government our ability to obtain and manage product information.
Furthermore, there is the Fed’s ludicrous National Consumer Protection Week, which, in February of each year, focuses on “predatory lending” information that, apparently, no consumer can afford to miss. Moreover, there’s the Consumer Bill of Rights and Responsibilities pertaining to health care, which was commissioned by Clinton and Company; the Cable Consumer Bill of Rights, making sure that the consumer has access to another “right” (cable TV); and Ralph Nader’s call for a Credit Card Bill of Rights. And, if the federal consumer shakedown isn’t corrupt enough, it’s backed up by the state consumer protection agencies.
The advocates that parade in favor of these so-called consumer protection laws have only one objective in mind; that is, to control the production and distribution of products and services in such a way that they can attain their vision of a socialistic, authoritarian society.
In order to do that, the egalitarians have to break down individual sovereignty, and they start by taking normal day-to-day decision making out of the hands of individuals, and putting it into the hands of the State. Eventually, the masses become numb to the idea of all the regulatory madness, and in fact, come to expect it and demand it.
The regulatory State, having sustained its centralized grip on the masses, proceeds to prescribe the Dos and Don’ts of everyday life. From beautifying our lawns to killing our spiders, from buying our food to buying our prescriptions, and from solving impotence to our consumption of petroleum, a government bureaucracy is there solely to dictate whether these products should be sanctioned and how and when they are to be manufactured. Eventually, the regulatory State becomes a mindset where subjugation is such that people think they’re no longer capable of buying a McDonald’s coffee without being warned that it’s hot, or buying a pillow without three tags hanging off the thing, warning them of the lethal dangers of said product.
All said, our individual liberty is driven by economic freedom. And central to that freedom is the ownership of one’s earned wages and profits, and having the capability to obtain or spend those profits in a free market as an unhindered, decision-making consumer. In its essence, this micromanagement of the consumer sector strangles productivity and makes knowledge-seeking a more costly chore.
A resistance to the State and its regulatory strangulation is necessary for liberty, and essential for emancipating the consumer.
Karen De Coster is a graduate student in economics (oldrightwinggal@yahoo.com).
