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Fear of haggling

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Tuesday, Jan 17, 2006

Economics often assume consumers are driven by a very limited set of incentives: get more, pay less, and make the more be of the thing that will give you the most satisfaction. Built into these assumptions is the idea that the consumer will always be aware of and pursue his best interests. For example, he’ll wake up in the morning, see that interest rates have fallen, and go right out and start that re-fi on his house. And he’ll refuse to let money sit as cash when there is money to be made in a wide variety of tempting investments. And he won’t pay ATM fees or overspend for coffee drinks and pressed sandwiches. But in truth, consumers don’t do this, and some economists think there is something deeply wrong with them. Individuals can’t be relied on to always make it the top priority to make a profit; they sometimes make the mistake of privileging some other priority. (Clever economists, however, can often bring any motive back around to maximizing marginal utility.) Fortunately, a corporation can always be counted on to pursue profit; it’s the only motive it recognizes, and it serves to make extraneous any other motive the people who make it up might have, channeling only their “useful” profit-maximizing decision-making powers. Corporations are essentially people minus any of the impulses that aren’t singlemindedly focused on growth and expansion.


In the most recent Economist, the “Economics Focus” column considers the problem, which may stem from the fact that markets are scary. “Consumers may doubt themselves, the products on display and the people flogging them.” The president of the American Economic Association adds, “Opportunities for choice may be interpreted as opportunities for embarrassment and regret.” Most Americans never have to haggle and would certainly shop a lot less if they did. Haggling puts the pressure on the consumer to be informed, and it makes overt the fact that shopping is not some win-win fantasy wherein they become kings and queens of the consumer-good fantasia, catered to with fun retail “experiences.” Shopping is competition, and there are winners and losers. Consumers, generally, are the losers, as they typically lack the information necessary to compete (or they value their ignorance more than the cost it would take to correct it and don’t mind overspending—or they see overspending itself as a good, a sign of prestige). People need to be motivated to shop and given the “courage” to spend and make those heroic purchases; they need to be cajoled, prodded, harangued at every possible moment, from every possible perch—look around, even on this page, at all the ads. No matter what they advertise, they all have this in common, they all think it’s important for you that you are buying, they all communicate the message that you are no one if you are not.


So people aren’t naturally inclined to want to see their entire public sphere turned into what Thomas Hine has called the “buyosphere”—the place (mental or physical) where we understand who we are only in terms of shopping. We have the buyosphere foisted upon us, and our anxiety over the need to ceaselessly compete in it is defined away as something else. Soon we are told that shopping is natural, as fundamental to our happiness and as instinctual as sex.


What a consumer economy does is try to extend the competitiveness and the incentives of winning to all experience, to commodify it all and make the degree to which one “wins” be the primary measure of the satisfaction the purchase provides—the “scoreboard” mentality that I’ve mentioned here before. But ceaseless competitiveness is exhausting and stressful, prompting indecision and evasiveness, attempts to avoid the market, circumvent its risks. The market has the effect of disincentivizing itself. But there are no alternatives to the market that we are willing to countenance. Thus as the article points out, economics, which used to take consumers as sovereign, now tries to figure out how to force consumers to fit the market system.

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