User:Xerographica/Consumer sovereignty

To make more money in the private economy, you have to offer people something they want. If you do, you’ll attract customers; if you don’t, you may go out of business, or lose your job, or lose your investment. That keeps businesses on their toes, trying to find ways to better serve consumers. But bureaucrats don’t have customers. They don’t make more money by satisfying more consumers. Instead, they amass money and power by enlarging their agencies. - David Boaz, What Big Government Is All About

The fundamental difference between decision-makers in the market and decision-makers in government is that the former are subject to continuous and consequential feedback which can force them to adjust to what others prefer and are willing to pay for, while those who make decisions in the political arena face no such inescapable feedback to force them to adjust to the reality of other people’s desires and preferences. - Thomas Sowell

Second, WTP is constrained by income (or wealth). When individuals are invited to vote for or against a given action, they may be told that the available alternative courses of action compete against each other for limited funds. But they may also not be told this. Yet if they vote in favour of one course of action, the funds allocated to that action necessarily preclude other actions being undertaken. This is the notion of opportunity cost. A voting system that ignores, or risks ignoring, opportunity cost fails to represent available choices in a true fashion. WTP, on the other hand, is automatically constrained by income and so should force individuals to relate their WTP to what can be afforded. There is an underlying value judgement in CBA, namely, that individuals' preferences should count, something known as 'consumer sovereignty'. - David Pearce, Dominic Moran, Dan Biller, Handbook of Biodiversity Valuation

There are four ways to spend money. You can spend your own money on yourself. When you do that, why you really watch out for what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well then, I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it costs, and I’m not concerned about what I get. And that’s government. And that’s close to 40 percent of our national income. - Milton Friedman, Other people's money

As indicated by the emergence of the taxpayers' revolt and concerns for inflation, America is entering an era of economic conservatism. The citizentry is asserting that taxpayers must have a choice in the services provided, that these services should reflect their priorities, and that reasonable value is expected for tax dollars. For educators, these "new" values reflect a demand for taxpayer sovereignty, greater choice among educational programs, and more responsiveness on the part of educational systems. Daniel J. Brown, The Case For Tax-Target Plans

Normally we buy things for ourselves when the value exceeds the price, and in so doing, this free choice by individuals maximizes society’s benefit. But gift-giving is entirely different because someone else is choosing for you. - Joel Waldfogel

Consumers fare better [at identifying their own preferences] than all types of givers except significant others and possibly grandparents...it seems unlikely that an alternative chooser would do better than friends, siblings, and parents, all of whom have substantial amounts of information about the ultimate consumer's preferences. - Joel Waldfogel, Does Consumer Irrationality Trump Consumer Sovereignty?

Throughout the year, we shop meticulously for ourselves, looking at scores of items before choosing those that warrant spending our own money. The process at Christmas, by contrast, has givers shooting in the dark about what you like... to make matters worse, we do much of this spending with credit, going into hock using money we don’t yet have to buy things that recipients don’t really want. - Joel Waldfogel

First of all, the economy consists of buyers and sellers. You think about why we spend in the first place. We spend in order to produce satisfaction for buyers. We don't spend in order to help sellers. It's fine if we do help sellers, but we're trying to produce satisfaction. If the spending we engage in doesn't produce any satisfaction, then it's hardly a measure of well-being. I'm not against the spending. But whatever amount of spending we do, we should get as much satisfaction out of it as we possibly can. - Joel Waldfogel

I find that some members of the Liberal Party accept the Collectivist position, and I am disturbed by it. It implies a pronounced lack of faith, not only in free enterprise subject to antimonopoly control but also in the 'Middle way', i.e. the encouragement of non-profit making institutions such as educational trusts, housing and hospital associations. ...I do not suggest, and have never suggested that education and housing should be turned over to free enterprise. What I would like to see is greater diversity in the provision of these services, whether public or private, so that there is a genuine possibility of choice for ordinary citizens. - Alan Peacock, The Welfare Society

Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident that it would be absurd to attempt to prove it. But in the mercantile system the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce. - Adam Smith

If we now turn to consider the immediate self-interest of the consumer, we shall find that it is in perfect harmony with the general interest, i.e., with what the well-being of mankind requires. When the buyer goes to the market, he wants to find it abundantly supplied. He wants the seasons to be propitious for all the crops; more and more wonderful inventions to bring a greater number of products and satisfactions within his reach; time and labor to be saved; distances to be wiped out; the spirit of peace and justice to permit lessening the burden of taxes; and tariff walls of every sort to fall. In all these respects, the immediate self-interest of the consumer follows a line parallel to that of the public interest. He may extend his secret wishes to fantastic or absurd lengths; yet they will not cease to be in conformity with the interests of his fellow man. He may wish that food and shelter, roof and hearth, education and morality, security and peace, strength and health, all be his without effort, without toil, and without limit, like the dust of the roads, the water of the stream, the air that surrounds us, and the sunlight that bathes us; and yet the realization of these wishes would in no way conflict with the good of society. - Frédéric Bastiat, Abundance and Scarcity