Chapter 25: The role of consumer sovereignty in sustaining the market economy
In today’s market economy the politics of neoliberalism dominate. A central weapon in the formidable armoury of economists sympathetic to the neoliberal agenda is that of the sovereign consumer. This encapsulates in one simple analogy the idea that individuals can command the organizations composing an exchange market to do what they want, as a monarch might command their troops in the field of battle. On the simple expression of demand by the consumer, the mechanism of the market will respond, resources will be reallocated and goods and services will be supplied. In this consumer-driven world of mainstream economists there are only two actors, firms and consumers, who operate in a market which is idealized as being free of government (by state or any other authority). The political economy of the real world is a little more complex than that. Markets themselves are constructed in many different ways involving various institutional arrangements (conventions, norms and rules). Markets are constituted of formally sanctioned rules that are enforced and maintained by government. The rules are manipulated and changed by national vested interest groups and authorities (for example, unions, employers’ federations, city councils, health and safety, advertising and trading standards) and international organizations (for example, the World Bank, World Trade Organization, multinational corporations) in accord with their own interests and their power to enforce those interests. The economy is inseparable from this world of power, so there is only a political economy.
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