We’ve gone over some of the basic terms and concepts that shape Analytical Consumer Economics. The first essay was an introduction, but from a broad theoretical perspective; a brief overview; a first step from conventional economics to a radical inversion of its precepts. It’s time to start defining the field in more detail.
Keep in mind that this is neither a classroom nor a textbook. I’m not here to teach ACE as a graduate seminar in a fully developed field. It is new and evolving, and it’s more important for you to grasp and come to terms with its essential differences from conventional economics than it is to put an academically fine point on every detail. Once you do grasp its approach and precepts, you will discover your own insights and details, some of which may be novel and worth sharing—and that’s always a more productive learning method than dozing through lectures.
Before we settle in, I’d like to note that I have a strong dislike of “whiteboard economics” — the simplified, chart-driven view of econ taught at the introductory levels, and sometimes even higher up the ladder. Too many who should know better—who have been educated better—up to those with Econ degrees—retain this simplified, mechanical, inflexible viewpoint when thinking about economic issues and haul out its creaking gears when arguing novel concepts.
A good example is when I bring up (as I often do) sleazy, even predatory business practices. Whiteboard thinkers tend to snort and argue that a business that honks off its customers goes out of business and is thus no problem in the overall scheme of things… because that’s how it was diagrammed back in their Econ 101 class. If a business survives, it must be at the approval of its customers. Good business grows, bad business collapses, god’s in his heaven, all’s right with the economy. Which, of course, is complete horsepuckey; a large number of businesses, generally larger ones and possibly a majority of those, use deceptive, unfair, consumer-negative practices as an integral part of their operation… and thrive, thrive, thrive.
So just a verb to the saps… don’t throw Econ ABCs from your intro classes and superficial understanding from comforting perspectives at these discussions. Or at least go look up the old joke about how “there ain’t no setch animal!” before you do.
I’ve established that most economic thought and theories are modeled from the major system elements down, with individuals and consumers either ignored or assumed to be a monolithic bloc of compliant players. Economic booms and busts are evaluated in terms of business, profits and dividends, with perhaps a little handwaving about effects for those not materially participating in business or industry. At most, individuals are considered as bulk commodities—most often goods-buying consumers (in the narrow sense of the word) or workers—and the consideration is not their well-being but whether they are enabled to hold up their end of the economic sedan chair by spending, spending, spending. No one in Econ gives bupkis about the lot of the unemployed laborer except in hir failure to be contributing to the endless rise of wealth and profit.
ACE is the inversion of that. Economics is consumers; the systems that evolve to fulfill their needs are consequential, not primary, as is the wealth model that evolves in turn from those systems. It has become forgotten that this is the natural order of wealth and productivity. That conventional economics, as the tool of business, industry and finance, centers its viewpoint on the wealth and systems is understandable, but it has made Econ, as a whole, the language of business, finance and accumulated wealth. And as in every historical case when the masters speak one language and the peasants another, revolution is one mob away. This more than anything may explain the explosive socioeconomic conditions in the US and western nations that seem to confuse so many pundits—pundits who in speaking French to each other have no idea what the rumbles in peasant patois mean.
This is not an argument that conventional economics, business econ, macroeconomics etc. should be abandoned or even much changed; their viewpoints, precepts and tools are useful for those layers of an economy. But the lack of any field that starts with the natural order of individual wealth, need and value and views economic systems from that perspective means that only one side is in control of the dialogue (and all else) here; only one side of the story is being told; it means that the needs of this essential and foundational component are being interpreted and modeled in ways that are inaccurate, incomplete and unfair. Conventional economics sees consumers as nothing more than economic engines—nameless, faceless, voiceless and numbered only when it is convenient to a theory.
Again an example, a necessarily narrow one. Business and government, as well as too many consumers, are comforted by the existence of a wide spectrum of “consumer advocacy” and “consumer rights” organizations, entities and departments, believing that this structure somehow protects and represents consumers. But it should not be a leap at this point to see that this ‘protection’ comes down to a business-side, financial-viewpoint analysis of whether individual consumer transactions are “fair”… according to an arbitrary set of standards that are almost wholly about the financial, monetary ‘balance’ of the transaction. There is not one speaker for consumers that addresses anything beyond this narrow notion of what is a fair, balanced, and appropriate relationship.
(As an aside, the only other element of “fairness” is the area of product safety, which is almost entirely forced on manufacturers against their strenuous objections and eternal evasion. There is substantial and conclusive history showing that manufacturers simply do not care about injuring, maiming and killing some percentage of their customers as long as it doesn’t completely undercut their market.)
A sub-example: In a number of years of both observing and direct inquiry, I have yet to find a consumer advocate—individual or organization—that will in any significant case say “Buy nothing.” Those that have responded or pointed to a mission statement justify their efforts as making sure the consumer gets the best deal… but never acknowledge that the deal may be unnecessary, or carry with it burdensome costs not measured in dollars, or may be wholly predatory even though financially “fair.” Telling a consumer “You know what? You don’t need any of these [insert heavily promoted consumer good here]!” is not within their ken.
Okay, that’s long enough. I mean to get in more than one ABC in each of this series, but I am trying to keep these essays at digestible length. The takeaway here should be that consumers—economic individuals—are the economy; their rights and well-being are paramount. And all further economic structure builds out from that, at least in a field seeking to look beyond profit as its own reward and wealth exchange among the largest players. It can be useful to look at the structure from other viewpoints, as nearly all conventional econ does, but ACE takes up the viewpoint of natural economics and its essential foundation: consumers.
—published on Quora, 4 Jan 2022