Consumerism’ means the conservation and consolidation of the individual consumer’s rights against the organised producer. When the term is used as between buyer and seller, it stands for the buyer; as between the State and the individual, for the individual; and as between doctor and patient, for the patient. Consumerism, in my judgement, could be defined in a nutshell as “getting value for money in terms of goods and services.”
It is, of course, self-evident that every one of us is a consumer. What is not so clearly perceived, however, is that each one of us is, in more situations, a consumer than a producer, and that as consumers we are part of the largest interest group. Unfortunately, this group is rather amorphous and tends to get blurred behind more prominent interest groupings. This, in my opinion, is the notable feature of the Indian consumer scene. We tend to regard ourselves more primarily as chartered accountants, doctors and engineers, and only then as consumers. Quite naturally the consumer viewpoint gets the least consideration in a conflict between two interest groups.
Whenever somebody sings paeans of praise about the cradle-to-grave welfarism of a company in our country, I have a wholesome suspicion that the consumer is the fellow who takes the rap. Usually, the products of this company are in a monopoly position. Take synthetic yarn, for instance. All of us know that this industry yielded some of the highest corporate profits, and that some big houses went into shipping and aviation on the shoulders of the nylon consumer.
There is in our country the classic situation where the manufacturer has a closed market; where the government, greedy for taxes, has granted tariff and other protection to monopoly producers; where the trade unions have, on their militant strength, wrested their share of the plunder in high wages and fringe benefits; and where the shareholder is next only to the consumer in being totally ignored. It is no wonder, therefore, that the consumer is dethroned and dispossessed. One can multiply instances where the producer, the government and the trade unions have acted in league to give the rawest of deals to the consumer in terms of quality and price.
The Indian automobile, belonging still to the fifties in features and design, is an outstanding example of the total relegation of the consumer’s views and interests to the lowest ever position in the production and distribution sequence.
This sequence, to which I refer, usually works like this, and I quote J. K. Galbraith: “In virtually all economic analyses and instruction, the initiative is assumed to lie with the consumer. In response to wants that originate within himself or which are given to him by his environment, he buys goods or services in the market. The opportunities to make more or less money are the message of the market to producing firms. The instructions of the consumer. The flow of instruction is in one direction, from the consumer to the market to the producer. All this is affirmed, not inappropriately, by terminology that implies all power lies with the consumer. This is called consumer sovereignty. The unidirectional flow of instruction from consumer to market to producer may be denoted as the accepted sequence.” In the Indian context, this sequence ceased long ago to operate, as under the controlled and regulated system producers are shielded from the cold winds of competition and assured of a captive and defenceless market.
The consumer is compelled to pay the price demanded by the producer and accept, without question, the quality that is offered. It is common experience for many of us that the price of a locally manufactured product is as high as, or sometimes even higher than, an identical imported product on which you pay a customs duty of anything between 50 and 120 per cent. One may find many explanations for this phenomenon, but what I wish to point out is that the Indian consumer does not get value for money in such cases. Incidentally, this also explains the large-scale smuggling of consumer goods.
To make matters worse, a notion is sought to be assiduously fostered that it is a sin to demand value for money where the so-called luxury items are concerned, or that the man who buys a fridge, a television set or a car can be legitimately charged two or three times its “intrinsic” worth. Excise duties are no doubt well-accepted fiscal tools in the hands of the Government, but when they become a share of the spoil from the well-to-do consumer, they lose all their legitimacy. They become oppressive and amount to legalised plunder. The producers are not slow to follow this example when they attach the price tag to their products.
Is it not a travesty that a well-known Indian refrigerator sells in Moscow at 1/3 the price the consumer in India pays for it? I am told by people more knowledgeable than I that the tax content in an Indian fridge, at various stages of its manufacture, including excise and sales tax on components, is about 800 per cent! The price of petrol is another example where the tax element is nearly 300 per cent of the production cost. Whether it is an air ticket or the price of a car, it is the supposed capacity of the buyer to pay, and not the value of the product or the service, that determines the price in this country. I have always felt that this is an invidious approach to pricing, and totally unfair to the consumer. For this reprehensible practice, nobody is more guilty than our Government.
In the industrialised societies of the West, under the so-called market economy system, the consumer–market–producer sequence held until sellers learned to reverse the sequence by manipulating the consumer. The effect of this reversal is to shift the locus of decision in the purchase of goods from the consumer, where it is beyond control, to the firm, where it is subject to control.
The enormous transformation and multiplication of human wants has rendered the process of choice by the consumer so difficult that he can no longer make a rational choice. It is therefore necessary to help the consumer make his choice and protect him against the many hazards of uninformed selection. This, however, cannot be left exclusively, or even largely, to the self-regulating practices of business. An alliance between consumer organisations and government must continuously monitor producer practices and ensure that the consumer is protected against abuses, fraud and deceit, and from dangers arising from the voluntary use of products or services. Adequate information, including the basic issue of what the consumer needs to know to make a rational choice, must be continuously disseminated.
Unfortunately, consumer activists and organisations in this country have their attention focused somewhat exclusively on areas of obvious consumer exploitation such as adulteration and short-weighting.
Another area of blatant consumer defrauding is the total disregard of warranty obligations by producers. The individual buyer has not the resources to force a recalcitrant manufacturer to comply with warranty obligations and the result is that producers make all warranties a dead letter with impunity. A strong consumer lobby could make the Government enact legislation rendering warranty non-performance an offence, with punishments sufficiently deterrent.
Yet another notable feature of the Indian consumer scene is the exaggerated and false claims made on behalf of products.
From the somewhat naïve assurance that if you use a particular brand of butter you become healthy and wealthy—an advertisement you are all familiar with—to the promise of eternal youth held out by a drug manufacturer, there exists a wide variety of misrepresentations in the world of advertising. In certain Western countries there are laws requiring truthfulness in advertisements, but here in India, however, the local Madison Avenue geniuses compete with one another in fabricating plausible half-truths to boost product sales. Here too, the Government’s professed concern for the common man has yet to manifest itself in tangible action to protect the consumer.
In post-industrial societies, consumer self-reliance is obsolescent, if not obsolete. Corporate social responsibility and legal accountability are accepted concepts. In the international marketplace, buyers of goods—other than the individual consumer—have long enjoyed protection through foolproof contractual arrangements and established business practices. This kind of protection is now being extended to the individual consumer, and business practices have undergone substantial changes in favour of the consumer.
The fundamental rights of the American consumer have been enumerated by a Presidential Commission as follows:
- The right to safety—to be protected against the marketing of goods which are hazardous to health or life.
- The right to be informed—to be protected against fraudulent, deceitful or grossly misleading information, advertising, labelling or other practices, and to be given the facts needed to make an informed choice.
- The right to choose—to be assured, wherever possible, access to a variety of goods and services at competitive prices, and in industries where competition is not possible and government regulation is substituted, to be assured quality at fair prices.
Other consumer protection measures cover pricing policies, selling practices, lending practices, sales premium schemes, warranty and service, product safety, health, producer liability and related issues. They also demand safeguards against air pollution, water pollution, thermal discharges, noise pollution, radiation, solid waste, visual despoilation, and the conservation of wildlife and natural terrain. The broadened concept of consumer rights thus covers not only goods and services but also the environmental conditions that bear on the quality of life.
Unfortunately for us in this country, while our sights are set on the moon for landing a craft, our concern for the consumer is rudimentary. To that extent, our sociology has failed to keep pace with our technology in making us a modern nation. While the country looks hopefully for a Neil Armstrong, there is as yet no search for a Ralph Nader, the great consumer advocate whose crusading spirit has done so much for the American consumer.
In fact, we need many Ralph Naders in our country, where the average citizen is a victim of all kinds of abuses at the hands of business, statutory bodies and government, and where age-old fatalism inhibits the growth of consumer awareness. If the nascent instincts of consumerism are consolidated and institutionalised, they will have a very great impact as a major institutional force on both business and politics in this country.
This essay is part of a series from the Indian Liberals archive, a project of the Centre for Civil Society. This essay is excerpted from the booklet Freedom First with the title “Consumer Exploitation”, which was published in September 1979. The original version can be accessed here.