There is this joke in economics that says two people are walking along and one says, “There’s a $20 bill on the sidewalk.” The economist responds, “That cannot be true because someone would have already picked it up.”
There is a weird truth to the joke that in economics class we learn about these things called market forces that no one in particular can influence. The “sophisticated” view of these things is not to care. Markets are efficient and their outcomes are correct. We as individuals are merely along for the ride. We can never outsmart the whole.
It’s an insight, often true, but holding this view can also create a false perspective that consumers are not really powerful. The extreme view is called “rational expectations” in which all present market realities incorporate all known information so it is pointless to try to change them, much less outwit them.
If this is true, how can we account for the current disaster at Fox News after they fired Tucker Carlson? Their ratings have plunged. This is what markets, which is to say people, have achieved.
And let’s talk about Anheuser-Busch. The brand Bud Light is dealing with a devastating blow due to mass rejection of its “woke” attempt to deploy a fake trans person as a mascot for the beer. The firings keep ramping up even as the company isn’t taking responsibility. Its executives are instead blaming viral social media posts and various influencers for demonizing its brand.
Anheuser-Busch should get used to this. So should every other company that decides to politicize its marketing and product. They are dying by the same sword by which they chose to live. Consumers would prefer that business be business and stay out of politics (or in the case of media, simply permit more freedom to speak). But if they are going to jump headfirst into political messaging, they have to expect consumers are going to respond in kind.
Boycotts can really work. Even better are subtle adjustments in the way you spend money to reward companies for caring about your values.
Like so many others, I’ve become newly aware of the power of the consumer dollar in deciding which brands live and die. Conscious consumerism is on the rise at a time when average people have very few powers left to shape the social and political order. We do still retain the ability for the most part concerning how we use our discretionary spending money.
For years, I’ve heard people tell me that they won’t use Amazon on principle. I never really took that seriously. I’m really starting to change my mind. People who shop at their local merchants really do have an opportunity to make a difference. They are using their consumer dollars in a way to shape the world in which they want to live. They would prefer to live in communities with thriving local vendors, so why not give those vendors your business if you have a choice?
That only makes sense. If you want there to be local theater companies, you have to support them. If you want local pharmacies, choose them over the big chains. Same with hardware stores, butchers, bakers, bedding shops, liquor stores, and everyone else in the merchant class. If you like local breweries to thrive, trade with them rather than the big brands that are in bed with the national political machine.
This is one way to beat corporatism. The consumer actually has the power to defeat it even if the politicians do not care about your values. This is one way we can all make a difference.
This rediscovery of the power of the consumer is potentially very empowering of the citizenry. Previously, many people believed that the only real power you have as a citizen is the vote. But even that has become corrupted and manipulated. The obvious power people have as consumers, however, has been unduly neglected.
This weekend, I saw the opera “Don Giovanni” as presented by the local opera company. It was a small production with plenty of errors that you would not see at the New York Met. But that makes it more interesting. I’m mortified that I went so long without supporting the local arts. They need donors, yes, but they also just need customers and audiences. I felt proud to be part of the solution: I want to live in a community with a thriving arts scene so I’ve decided to do something about it.
We can all do this. There is no reason to wait for a social media campaign that highlights something you find truly offensive. It’s a good time to examine all of your spending decisions, figure out which ones you can control, and then make decisions around the freedoms you have.
It’s true for local bars, restaurants, and everything else. There are trillions of dollars at stake and it’s time that we realize this. To be sure, just because something is local doesn’t make it great. By the same token, just because a business is big and national or international doesn’t mean that it always has the best prices and products and services either.
Big business these days is at a major disadvantage because it has to lug around a huge compliance bureaucracy. Over a decade and a half of low-interest rates, their hiring has been subsidized by cheap credit to the point that they have massively overstaffed themselves and thus face enormous labor costs for which consumers have to pay.
Small businesses these days are far more efficient and can often undercut their largest competitors in price simply because they have kept the bureaucracy in check. This is different now than it used to be. Going into a recession that will become obvious by the summer and fall, many small businesses that weathered pandemic shutdowns are in a great position to thrive in hard times.
What they need more than anything now is for the consuming public to become more aware and deliberate in their shopping decisions. In many ways, the experience of Bud Light should perhaps serve as a wake-up call for more boycotts, but also for more clarity and premeditation about how we use our money. Not everything needs to be clicked. Sometimes strolling to a local store provides a more beautiful experience overall.
As for investors, the time has come to be more active. The markets are being skewed by DEI [diversity, equity, and inclusion] and ESG [environmental, social, and corporate governance] scoring. There is a huge role today for entire funds that revolt against this movement to force companies into political roles. It isn’t automatically true that if you “go woke,” you “go broke.” That only happens when consumers make it so. And they should and must, lest we let powerful political brokers permanently change the world in ways we wouldn’t like.
Champions of capitalism became too willing to defer to anonymous forces of the market to instruct society about what is good and bad in the material world. With all the distortions currently out there, it isn’t enough merely to go along with whatever big business is offering you. There is much more going on.
Bigness is no longer a reliable indicator of success and social service. Otherwise, Pfizer and Moderna should rely on their profitability as the only metric of success. Here is what I mean by conscious consumerism: These companies would be taken down a peg simply by adjustments in what we choose to consume.
Back to the joke about the $20 bill on the sidewalk. Sometimes it’s there and no one else has seen it. Markets are made of people and people make choices. You make choices. You are part of the market. You can make or break whole companies. You can shape the world in which you live. Don’t let anyone tell you otherwise.
