barriomulas.com - A Different State's Role

Morris Bornstein in "Comparitive Economic Systems: Models and Cases" points out how every economic system has a "social preference function". Such function "expresses the community's effective aggregate preferences regarding the ends and means of economic activity" either through "individual preferences expressed through individual choice in market", the political process, or the preferences of a ruling group.

The West Covina, California City Council once voted on denying the sale of a plot of land that was to be used for a Wal-Mart. The Los Angeles City Council was also considering such a vote (Enter Stage Right). Even Puerto Rican law makers have evaluated protectionist measures that would drastically limit the advantage that large chain stores have in urban centers.

On the other hand, market advocates will argue that such legislation - though democratic - is contrary to popular will. If people didn't want Wal-Mart, McDonalds, or Wal-Greens, they argue, then they wouldn't shop there. "If Wal-Mart cannot make money in a given location," said one source, "it will either not move there or will close the store. So far, however, it makes money everywhere it opens a store for one simple reason: customers want to shop there." (Enter Stage Right) The Ludwig Von Mises Institute states that "the critics are thereby attempting to cripple consumers' ability -- especially lower income consumers' ability -- to obtain the products that Wal-Mart sells."

Recently a Burger King was constructed in my small town; an idea that I have disagreed with even before the company expressed interest in doing so. This Burger King represented the town's entrance into the fast food battles. "We're finally developing!" some citizens would hail. I moved to this town to escape the endless sea of fast food restaurants and department stores that blanket the suburbs that I grew up around, and it hurts me to see that there seems to be no escape.

Unfortunately, that is what the "people wanted", and the inauguration of the Burger King was well publicized and attended by a massive crowd who quickly formed a queue that filled the store. Though the loudest voices during the public hearings were the anti-Burger King crowd, at the end of the day the consumers had their way.

I as well find myself stuck in the middle of the contradiction. If Wal-Mart was to submit all citizens to a referendum on whether or not Wal-Mart should close down its businesses, I would without a doubt vote in favor. Despite such, there have been instances where out of either a shortage of time or a lack of any other option I have made purchases in Wal-Mart. When Wal-Mart purchased the local Amigo supermarket chain I heard many citizens say that they will no longer make purchases from the brand. Despite such, business runs as smoothly as normal. We are all caught in the contradiction. Often at times it is easier to be swept away into a miniscule purchase than it is to be tempted at the polls. We have the habit of voting consciously and of consuming subconsciously; paying little attention to the affect that such action will have on our community or economy.

While I understand the mechanism of the market advocate's argument, I disagree with the statement that just because a transaction is made means that the transaction is legitimate. Drugs, prostitution, abortion, and even slavery could be justified by such an argument. "If people disagreed with slavery, than they wouldn't purchase products made by slaves," the market advocates might have said centuries ago. I could walk into another country, steal resources and land at gunpoint, turn around and sell the fruits in my local market, and most likely people will still buy them. Such does not justify my practices.

Many neighbors were dumfounded when I told them the reasons why I opposed the new local Burger King. Not only have they never thought or heard of such arguments, but many noded in agreement. The truth is that most consumers are oblivious towards their actions and the direct and indirect effects of their consumption habits. Few are aware that their service and product providers have used the eminent domain powers government to obtain their market advantage, or that their management has contracted the assistance of paramilitary forces to stun union activity, or that foreign government officials or suppliers are paid under the table for their assistance towards the company.

Though consumers can be quite ignorant, I do not necessarily wish for the state to intervene anymore than it does. If a company wants to sell transfat, then I believe that it should be able to do so. If a consumer wants to buy transfat, then they should be able to, only if they are aware of the effects of such. That's where the state steps in. Uniform nutrition tables and GM labels are a start. A public Consumer Reports-like shopper to be distributed with newspapers is also a grand idea. Package labels that describe the actual cost of the item, the original location of the product, and the amount that will be kept by the company are also options.

Consumers alone do not have the tools and knowledge available for them to understand the effect of their purchases as much as they do their votes. Nor does the state have the intrusive right or capacity to regulate corporations at every step. Thus, I think that using the state to educate consumers in order to make them better informed is an acceptable medium.