Consumers: The Driving force of the Market Economy

Consumers have the most important role in a Market Economy…Why?

Consumer Sovereignty Consumers are in control because of their power to buy goods and services If a producer is producing goods that are not being bought the producer goes out of business Supply and Demand..YOU are the demand

Do consumers really have a choice in the economy?

Advertising Is a way for the producers to try to generate a market for their product Remember the idea of unlimited human wants and limited resources? Advertising works to create more wants

Some Examples:

Some Examples:

Positives of Advertising Ads give us information Allow us to comparison shop Lower prices by uniting producers with consumers

Critics say: Advertising is a way of manipulating consumers into buying something that you did not need The purpose of advertising is to sell not to educate, we never see in an ad the bad side Critics often point out that advertisements have created a culture of dissatisfied people Help to spread fads

Consumer issues: Who REALLY runs the economy?

Consumer Power What do you do if you find out that your favourite company: Employs slave or child labour? Doesn’t use recycled products? Tests its products on animals? Uses/produces materials harmful to the environment? Ralph Nader: Unsafe at any speed (1966) Looked at the Automotive industry and the unsafe products that they were producing Is an example of someone looking for Government intervention in the economy

Consumer Power: Boycotts A boycott is a decision by a group of consumers not to buy certain products Environmental organizations use boycotts as one way to take action. In 2007, Greenpeace called for a boycott on oil and gas products Animal rights groups boycotted the products of cosmetic companies because companies used animals to test product

Modern Boycotting Examples Canadian Seafood Boycott by U.S Chefs 2013 In an attempt to stop Canadian annual seal hunt, many Celebrity chefs are calling for a boycott of all Canadian seafood products Sochi Olympics 2014 People around the world calling for Countries to boycott attendance at the Sochi 2014 Olympics in order to protest Putin’s “Anti-Gay Propaganda Laws”

Environmental Concerns Limited Resources, why?

Earth from space

Adam Smith thought that the economy needed constant growth, which means more resources

Environmental problems: Pollution is one of the major problems that industrialized nations face Not only from removal of resources, but of where to put our waste

Problems: Major cities in our world are becoming unsafe to live in due to the air pollution Acid rain destroys crops and trees

Greenhouse effect

Environmental problems…: Global warming could potentially cause super storms CFCs have deteriorated the ozone layer over both poles Renewable natural resources have been over exploited (forests, fisheries)

Environmental Problems At some point we have to say STOP and start protecting the environment Where do industry and consumers factor into this?