What kind of goods and experiences comprise a \u201cnormal life\u201d? In 1900, Henry George thought millionaires lived abnormally because they had telephones in their bedrooms. Looking back, it\u2019s remarkable how quickly the abnormal becomes ordinary. Today, even the poorest people \u2014 not only in rich countries but also in developing ones \u2014 carry a phone (which does much more than ring) in their pocket.<\/p>\n
That\u2019s one of the miracles of the free market. French sociologist Gabriel Tarde noticed<\/a> that forks and spoons were once luxuries reserved for the elite, but by his time had become universal. Ludwig von Mises drew inspiration from Tarde\u2019s insight, calling it one of capitalism\u2019s greatest virtues: the transformation of luxuries into necessities. \u201cWhat was once a luxury becomes in the course of time a necessity,\u201d he wrote<\/a>. In Mises\u2019s view, this is the inherent tendency of capitalism \u2014 to shorten that time lag and make the luxurious accessible to the masses. One might add that in socialist economies, the opposite happens: necessities become luxuries<\/a>.<\/p>\n But this transformation is only possible through freedom \u2014 the freedom of consumers to experiment with new products, and of producers to innovate and take risks. On the supply side, the liberty of entrepreneurs and capitalists to test new methods of production \u2014 even when those methods appear \u201cunjust\u201d or \u201cwasteful\u201d at first \u2014 opens the door for millions to enjoy the fruits of innovation. As F. A. Hayek put it, capitalism enables \u201cexperimentation with a style of living that will eventually be available to many.\u201d<\/p>\n Yet supply is only half the story. Consumers play an equally vital role. Mises called capitalism the sovereignty of the consumers. And yet, in recent years, a \u201cwar on consumers<\/a>\u201d has emerged from both the left and the right.<\/p>\n Five months ago, Donald Trump, defending his trade war with China, remarked<\/a>, \u201cMaybe the children will have two dolls instead of thirty dolls.\u201d On the other side, Bernie Sanders has declared that we \u201cdon\u2019t need 23 choices of deodorant or 18 choices of sneakers when kids are going hungry.\u201d\u00a0<\/p>\n In both cases, ordinary consumers \u2014 those walking through Walmart comparing groceries or choosing between brands \u2014 are portrayed as the problem. \u201cWhy do you need thirty dolls?\u201d they ask. \u201cWhy twenty-three deodorants?\u201d<\/p>\n This disdain for consumer choice has deep intellectual roots \u2014 not just in populist rhetoric but in academia. From Thorstein Veblen\u2019s theory of conspicuous consumption<\/em> to John Kenneth Galbraith\u2019s The Affluent Society<\/em><\/a>, many thinkers have looked down on consumer tastes. Galbraith once dismissed American cars as \u201cbig, ungainly, [and] unfunctional.\u201d But ugly by whose standard? Dysfunctional according to what measure? The essence of the free market is that consumers decide for themselves \u2014 and the normative defense of this system is straightforward: individuals know their own interests better than any politician or professor.<\/p>\n Critics \u2014 from Veblen to Marxists who claim capitalists \u201cmanufacture\u201d desires \u2014 forget what liberal economists understood well: that consumption in a modern economy is not merely about survival, but experience. We don\u2019t just buy things to use them; we buy them to experience them. Marketing, far from being pure manipulation, is part of that experience. Buying a perfume endorsed by your favorite celebrity is not just about smelling pleasant \u2014 it\u2019s about identity, aspiration, and emotion. Because preferences are subjective, it\u2019s meaningless to draw a hard line between \u201cneeds\u201d and \u201cwants.\u201d Who could have predicted that humanity \u201cneeded\u201d airplanes or automobiles before they existed?<\/p>\n Through trial and error, consumers discover what they value. There is no objective measure of \u201cneed.\u201d In fact, the unpredictability of human desire is itself a defense of the free market: we need its discovery process to learn what tomorrow\u2019s needs will be. What looks like frivolous consumption today often becomes the gateway for widespread prosperity tomorrow.<\/p>\n Critics of marketing also ignore basic business logic. Which is easier for a firm: to spend vast sums inventing a new \u201cneed\u201d and then developing a product for it, or simply to observe what people already want and produce accordingly? The latter is common sense. Marketing\u2019s informative function is often overlooked; if it were purely deceptive, businesses would have little incentive to rely on it. Real profits come from loyal, long-term customers \u2014 something deception cannot buy.<\/p>\n As the economist Stanley Lebergott once wrote, \u201cIt is an unacknowledged excellence of modern economics that its foundations are pitched on the sands of human desire.\u201d Modern economies achieve miracles not through the commands of kings or planners, but through individuals pursuing their own interests \u2014 and that is a virtue, not a sin.\u00a0<\/p>\n This \u201cunacknowledged excellence\u201d is the moral beauty of the liberal market order: where consumers are free to choose, society has no forced mission \u2014 and yet it prospers precisely because of that freedom.<\/p>\n The post To Make Luxury Affordable, Embrace Consumer Choice<\/a> was first published by the American Institute for Economic Research (AIER)<\/a>, and is republished here with permission. Please support their efforts.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" What kind of goods and experiences comprise a \u201cnormal life\u201d? In 1900, Henry George thought millionaires lived abnormally because they had telephones in their bedrooms. Looking back, it\u2019s remarkable how quickly the abnormal becomes ordinary. Today, even the poorest people \u2014 not only in rich countries but also in developing ones \u2014 carry a phone …<\/p>\n","protected":false},"author":507,"featured_media":2324418,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[],"class_list":["post-2510718","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2510718","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/users\/507"}],"replies":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/comments?post=2510718"}],"version-history":[{"count":1,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2510718\/revisions"}],"predecessor-version":[{"id":2510719,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2510718\/revisions\/2510719"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/media\/2324418"}],"wp:attachment":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/media?parent=2510718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/categories?post=2510718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/tags?post=2510718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The War on Consumers<\/h2>\n