by Amanda McLeod
Dr Amanda McLeod is a historian and commentator interested in consumer policy and commercial, social and political life. She holds a PhD in history from Monash University (2004) where she is currently an Adjunct Research Associate. Her first book, Abundance: Mass Consumption in Postwar Australia, was published in 2007. Between 2007 and 2009 she was Williamson Postdoctoral Research Fellow in the Australian Centre at the University of Melbourne. Her recent projects include A Fair Deal: a history Consumer Affairs Victoria and ‘Don’t Buy: finding a real solution to over-consumption’. Amanda McLeod writes regularly for a wide range of publications both in Australia and overseas. She is currently working on a research paper for The Australia Institute on the limitations of consumer choice and is keenly interested in exploring alternatives to mainstream consumer capitalism in ways that strengthen democratic processes.
The new Australian Consumer Law, which came into effect on 1 January 2011, amends the Trade Practices Act 1974 by introducing a single generic consumer law, further unifying consumer and commercial protection across state borders. The Productivity Commission’s landmark ‘Review of Australia’s Consumer Policy Framework’, which led to the new law, recognised the importance of competition policy as being the greatest driver for improving the material wellbeing of Australians. ‘Most notably’, the Commission argued, ‘reductions in trade barriers and competition policy reforms have put downward pressure on prices, enhanced product quality and increased consumer choice’. However, this focus – on prices, quality and choice – is far removed from the historical foundations of consumer rights which were closely linked to broad and strident democratic principles.
Consumer policymakers and commentators have been all too willing to pay lip-service to the four basic consumer rights proposed by President John F. Kennedy in 1962. The rights to safety, to be informed, to choose and to be heard are the historical foundation and remain central tenets of the consumer policy movement. Yet, few have sought to clarify or question what these rights mean and how they might be extended. When the United Nations added an additional four rights in 1985: the right to the satisfaction of basic needs, to redress, to education and to a healthy environment, there was little, if any, debate about how competing consumer rights were to be balanced against each other. As consumer capitalism became firmly entrenched, as the favoured method to achieve material prosperity, this thorough enunciation of consumer rights has narrowed significantly, ultimately to the detriment of the consumer interest and democracy more broadly.
But for many, however, a broad application of consumer rights could not always be the ultimate goal nor, from the Productivity Commission’s point of view, were they always in the ultimate interests of the consumer body as a whole. The Commission explained that ‘while broadening those rights may be in the interests of the wider community, the associated costs must always be considered as part of the policy formulation process’. When it came to labeling, for example, it argued that ‘the costs of more stringent labeling requirements to meet “right to know” goals will be passed on to all consumers – some of whom may derive little benefit from the information provided’. Therefore, the ‘right to know’ might not always be in the consumer’s best interest. As placing downward pressure on prices became increasingly important it was in the interest of both the economy and the consumer interest to curtail certain rights.
This focus, of course, did not give consumer rights an equal hearing. The Productivity Commission was well aware that consumer rights competed for attention – the ‘right to know’, for example, with the ‘right to choose’. It argued, however, that: ‘a rights [based] approach represents a different “point of entry” to the discussion about when governments should intervene to improve efficiency and promote social justice’. Without full disclosure about products, services and consequences of consumption, however, it is difficult to argue that the consumer has been given a fully informed ‘right to choose’.
Despite widespread acceptance of the need for consumer protection from all sides of the consumer policy debate, this did not mean that there was universal agreement as to why consumers needed protection. Nor was there shared motivation to uphold consumer rights as they were broadly defined by President Kennedy and later extended by the United Nations. Even though upholding the consumer’s right to information was widely considered in the consumer interest, that business should provide consumers with information was not always was not an ends in itself nor the commercial sector’s ultimate goal.
The Whitlam Labor Government’s Trade Practices Act 1974, which was largely the work of Attorney General Lionel Murphy, was groundbreaking because it placed measures to promote competition and to protect consumers together into a single document for the first time. But more than thirty-five years later and despite the lip-service paid to consumer rights, the meaning and application of consumer rights has narrowed. Consumer rights were not a different starting point at the time of the drafting of the Trade Practices Act 1974 – they were the starting point.
By conceptualising consumer rights more broadly (beyond access, participation and accumulation) substantial solutions to the complex problems caused by mass consumption may be found. It is worth remembering that Ralph Nader’s vision for consumerism was not just about economic rights or the right of access to share in prosperity. Nader was driven by a desire to strengthen democratic rights beyond the marketplace. Economist and strident consumer advocate Dr David Cousins, (Director of Consumer Affairs Victoria 2002-2008), argued as early as 1981, that consumer policy should take into consideration the welfare of the ‘society as a whole’.
It is, therefore, worth considering the historical foundations of consumer policy and the desire of some of the most strident consumer advocates for a consumer democracy in which benefits associated with consumer capitalism would be spread widely. But a strong democracy needs the principles that make democracy work to be firmly in place. It is vital to have strong mechanisms in place to balance rights precisely because change is inevitable; administrations change, so do management structures, political agendas and economic circumstances. Although their application may alter, the fundamental essence of democratic rights does not. Without reining in the right to access and participate in the market and the narrowly defined notion of consumer choice, a healthy fully-functioning democracy in which prosperity is spread evenly will not be possible.
While in historical terms, the ‘right to a healthy environment’ was focused on the effect production processes were having in the developing world, the environmental impact of consumption in the developed world has become of increasing importance requiring urgent action. In order to balance rights, it may often be necessary not to buy particular products because the negative impact of consumption (and/or production) outweighs any positive benefits.
Consumer choice has become the all-encompassing catch cry of consumerism. But a framework based primarily on acquisition and accumulation ultimately offers consumers less real choice than a framework in which all consumer rights are to be balanced. It might be difficult, if not impossible, to balance the right to a healthy environment with unfettered acquisition, but it is certainly possible if ‘needs’ are of a more basic nature. There is nothing in the ‘eight consumer rights’ to suggest that consumers should have the right to consume, bugger the consequences that such consumption may have on the environment. Consumers will do well to consider the wider ramifications of their purchasing decisions. More often than not, it will be necessary for consumers to exercise the ultimate democratic choice – saying no and not buying at all.
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Citation: McLeod, Amanda, Just Say No: Consumer policy and the case for restricting rights. Australian Policy and History. January 2013.
Relevant further reading
Productivity Commission, Review of Australia’s Policy Framework, Final Report, Vol. 1, Summary, No. 45, Canberra, April 30, 2008, p. 2.
President John F. Kennedy, ‘Special Message to Congress on Protecting the Consumer Interest’, March15, 1962.
United Nations, UN International Guidelines for Consumer Protection, 1985.
Productivity Commission, Review of Australia’s Consumer Policy Framework, Productivity Commission Inquiry Report, Vol. 2, Chapters and Appendixes, No. 45, Canberra, April 30, 2008, p. 12.