Empower the Consumer via Transparency

The role of government intervention into the operations of businesses is always a heavily debated topic. To what right does, and to what extent shoud, the government get involved in the free market capitalistic business environment that we have built?

As someone who claims to be a consumer advocate, I’m not sure of the best approach here. Let’s take an issue that has become very significant over the past few years…enviromentalism. Some may say that the government needs to create laws that require companies to follow a minimum of standards regarding their environmental impact. This would be great for us consumers because we would be assured that the products we buy are meeting a certain quality standard. On the other hand, more government regulation means more expenses for the business (usually) which would trickle down to the consumer in the form of more expensive products. Where is the balance between what improvements I, the consumer, am willing to pay for and what I am not? And is the consumer trustworthy enough to make this decision?

The biggest problem is not the questions I just posed, but the fact that we have no measurement tools to find the answer. The current strategy is to have environmental groups lobby large corporations to change, and through the fear of bad PR, corporations start changing. I think that if this issue, or any issue, is seen as  largely important to the people of this country, than the government should get involved. Not to regulate operations, but to regulate transparency. I believe that government’s role in major social issues like this (global warming, obesity, etc…) is not to tell businesses how to act, but to require businesses to be transparent about their operations.

What if the government required that every product made must have a sticker that gives a number of that product’s carbon footprint on a regulated scale of 0 – 100. Companies wouldn’t have to change their operations (other than changing their label). Consumers would then be able to use their money to determine how important this issue is to them. The free market would stay as it is. There would just be another attribute of the product that the consumer would need to evaluate. We should have a slew of scales based on important social issues. In other words, government shouldn’t hinder businesses. They should empower consumers.

Can We Trust the Consumer to Make Good Decisions?

One of my friends told me a hysterical story that happened to him this past weekend. Needing to access his attic he grabbed a small powerful flashlight that he had had bought for $50. While ascending the ladder to the attic he noticed the flashlight dimming. In a sudden flash of light the device exploded and sent shattered pieces everywhere. The hilarity came from the description of how one of these shattered pieces hit my friend in the crotch causing a welt in a very uncomfortable area of the body.

The manual for the flashlight recommends that you don’t leave it on for more than a couple minutes at a time. It doesn’t make much sense that a device can explode if used for more than a certain period of time and be legally sold, but my guess is that it was some sort of imported knockoff built without any regard for safety regulations.

After the laughter subsided, the group of people I was with starting discussing responsibility for this accident. While the company that designed/manufactured the flashlight is the obvious culprit, how responsible is my friend? Should he expect better quality from a knockoff product that actually warns you of overusage explosions?

While this example is extreme, it drove home an issue that the United States is dealing with every day. Can we, as a country, trust consumers to make good decisions? In terms of products, healthcare, investments, etc… The fight over the range of consumer power and trustworthiness is debated in the halls of government every day. From my point of view, the upcoming presidential election is heavily focused on consumer power. The argument of small government vs. big government in its simplest form is “consumer makes the decision” vs. “government makes the decision”. While I am typically pro-consumer choice, I think it’s important to limit the metaphorical welts on metaphorical crotches.