Consumers in Capitalism

Before I address the issue of “ethical consumption” in my next post, I need to take on the topic of consumption itself.

According to neoclassical economics, a consumer is an informed individual, making rational decisions in the marketplace to maximize his/her self-interest. There’s no surplus, growth is an accident of production, and capital comes from investors beating the odds for a while. Workers and owners are just temporary categories; we’re really just individuals who come to market to meet our infinite needs, and some of us are lucky enough have extra cash on hand to sell goods to others. By demonstrating a preference for particular goods, consumers can change the way those goods are produced and distributed.

In reality, this doesn’t describe most people, who consume according to standard patterns, socialized through culture and family. However, it does describe capitalists, who come to the market as a purchaser (consumer) of labor power.

Neoclassical economics focuses on consumers, but this reflects reality only for the capitalist. Any economic theory beginning with consumers, consumption, or exchange adopts the capitalist’s point of view. This is flawed in two ways:

  1. Wages don’t create all demand: they’re just one way for capitalists to realize the capital invested in commodities. There are three other circuits that supply public and private goods at all stages of production. Most people encounter the market when they shop, so it seems natural to think that capitalism exists to satisfy their consumer needs. But while the market in consumer goods is constantly on display, exploitation is hidden. Workers matter only as providers of labor power, the source of surplus value: they’re only able to receive and spend a wage if their employer makes a profit first. Moreover, capitalists also create commodities (the means of production), that only other capitalists buy. For example: steel producers buy coal to make steel; manufacturers of coal-mining equipment buy steel to produce mining equipment; mine owners buy mining equipment to mine coal, that they then sell to steel producers. There are enormous areas of the economy where workers’ spending power has no impact at all.
  2. Money capital funds every circuit: it not only provides start-up capital but helps workers’ wages circulate by providing personal credit, increasing capital through banks and corporate self-financing. New forms of credit continue to spawn, both because industries self-finance, and because speculators can suck up surplus value that can’t be reinvested profitably. To influence this process, consumers would have to find some way of controlling investment decisions at all stages of capital circulation, including private investment and state purchase of goods. Otherwise, capitalists would pull investment dollars from the more expensive, less technically-developed, ethical local industries.

Consumer spending is a form of distribution, it represents the reproduction of workers’ own labor power, not control over the entire process. The idea that workers could control the circuit of capital repeats Ricardo’s error by assuming workers receive the full value of their labor, rather than the value of their labor power in production. Even if localist advocates convinced all workers that local consumption could change the world, workers could, at best, change the conditions of production for their own housing and durable goods, a small portion of the overall capital circuit.

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Localism and Community

[F]aced with the unpalatable conclusion that small alternatives won’t out-compete or destroy capitalism, localists cling to a fierce faith in communities to band together and do it yourself.

Localists yearn for community, freed from the uniform mediocrity of anonymous, corporate-controlled spaces. However, the petite bourgeoisie’s way of life precludes a community, since members of the class rely mainly on themselves for economic progress and emotional support. Community members are either fellow petite bourgeois competitors or customers demanding lower prices. Perhaps this is why so many localists have such a strong nostalgia for community as an ideal place where business happens and values take shape. Farmers markets aren’t just a place to shop, but a place to socialize: since “consumers have ten times as many conversations at farmers’ markets as the do at supermarkets… You go from being a mere consumer to being a participant.”

Why do localists want their shopping trips to include personal conversation? Alternately, you could appreciate the anonymity and speed of supermarket transaction if you have other ways to socialize. But it makes sense that the petite bourgeois, trying desperately to succeed in the marketplace or gain control on their own merits, would feel lonely. They try to re-forge the social connections lost in the marketplace in the same individual way they advance. Consumption is where they compete to achieve the symbols of habitus. The desire for friendly consumption is as close as the petite bourgeois get to stepping outside their daily antagonisms.

Just as ideology is a single class’s way of life generalized to all of society, community for the petite bourgeois becomes community for them alone. Wendell Berry criticizes corporations, governments and schools for concealing a “private aim (which) has been to reduce radically the number of people who, by the measure of our historical ideals, might be thought successful: the self-employed, the owners of small businesses or small usable properties, those who work at home.” This persecution of petty capitalists sets local community advocates against “Communists and capitalists (who) are alike in their contempt for country people, country life, and country places. They have exploited the countryside with equal greed and disregard.” The local community are “small farmers, ranchers, and market gardeners; worried consumers; owners and employees of small businesses; self-employed people; religious people; and conservationists.”

The inference is clear: the working class isn’t part of the community. [Emphasis mine.] The images are of the town square, the main street where everyone knows your name, the butcher, baker and small shopkeeper. These evoke market towns where residents distributed commodities made elsewhere. In contrast, industrial towns were often centers of intense class struggle between owners and workers. Not coincidentally, industrial towns created close community networks forged in that struggle. These close-knit communities of workers also demonstrated all the values of collective self-sacrifice, yet localists never mention them, preferring fuzzy invocations of consumerist fantasy.

The problem lies in how malleable the term community is, including capital, the state, and workers — groups whose interests are fundamentally at odds. By suggesting workers are at most another group making demands on the state, the designation of community hides power relations. It replaces class with innumerable differences of income, culture and other sociological categories, bounded by geography rather than a common exploitation. This blurring of conflict is fundamental to localism. By invoking community, localism attempts the political equivalent of Proudhon’s fair markets for small artisans, imposing a false social peace by eliminating the working class rhetorically.

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Greg Sharzer, No Local: Why Small-Scale Alternatives Won’t Change The World (Winchester, UK: Zero Books, 2012), 98–101.