All Commentary
Thursday, April 1, 1965

Focus on Consumer Needs

 The consequence of the Federal government’s latest attempt to carry out a program of consumer protection on a major scale was that housewives couldn’t get meat or butter or sugar to satisfy their family needs, except as they might find a butcher or grocer or some­one willing to practice bootleg­ging. The time was a generation ago during World War II; and the Office of Price Administration was the intervening agency responsible for those barriers between willing buyers and sellers.

Many Americans, however, had gained some practice and skill in “black marketing” during the years of Prohibition from 1920through 1933. So, aside from the petty annoyances and inconven­iences of price control and ration­ing, the government’s program for protecting consumers during World War II was not the national calam­ity it might have been if rigid enforcement had prevailed. It didn’t result in famine as similar “protections” have done in India, or cause the United States to lose the war as happened when Ant­werp tried price control to pro­tect its citizens under siege in 1585.1 By and large, the attempted intercession on behalf of consum­ers during World War II simply did not succeed; American con­sumers managed to protect them­selves.

Governments, however, are prone to repeat mistakes, for the resources squandered in such ven­tures by government officials are rarely their own. Hence, as a tactical maneuver in the War on Poverty, the President has ap­pointed a Committee on Consum­er Interests which is charged with the responsibility, among other things, to “focus on consumer needs which can appropriately be met through Federal action, whether under existing laws or new legislation.”

What all this means is that, if we’re going to try to consume our way to prosperity, we’ll need to use coercion. No individual can peacefully consume his way out of poverty; he might be able to steal his way out, but that would be both immoral and illegal.

The poor individual’s only peace­ful recourse—aside from charit­able offerings—is to try to work his way out of poverty, that is, produce or earn the additional goods and services he wants. And a helpful means to that end is voluntary exchange in the open market.

An outstanding feature of the open market is the businessman, whose success or failure depends entirely upon his ability to “focus on consumer needs” and so com­bine existing and potential factors of production to serve consumers most efficiently. The only construc­tive role government can play un­der the free market method of overcoming poverty is to see that the participation of individuals is strictly voluntary—that none is permitted to steal from or cheat or enslave another. In the free and open society, the organized force of government is to be used only if necessary to protect the lives and the property of peaceful individuals. In other words, the proper function of government is to protect against robbery rather than practice it.

By the Choice of the Individual, or Government Control?

The alternatives are quite clear. The question is whether human energy is to be free for use ac­cording to the choice of each in­dividual; or, is the government to regulate and control the produc­tive efforts of individuals and the fruits thereof?

As each of us faces that partic­ular decision, he should be well aware that competitive private enterprise by way of a free mar­ket can never be expected to over­come poverty in the absolute sense that all desires will be satisfied or that all will be equal in their possession and enjoyment of the necessities and comforts of life. Even if by some miracle it were possible to start everyone equally each morning, each with freedom to use his share as he pleased, by nightfall the material wealth of the world would again be distrib­uted unevenly and the “lower third” would “go to bed hungry.” Freedom assures the individual of nothing but the unbridled op­portunity to do the best he can with the abilities with which the Creator endowed him.

This may seem to some persons to be inadequate—that the poorly endowed are entitled to more than they are capable of earning. Any­one who feels that way surely should be free to exhaust his own resources in behalf of the poor. Beyond that, however, if such per­sons then feel prepared to take upon themselves the role of the Creator—which must be the pre­sumption of anyone advocating government direction of peaceful human affairs—they also should be well aware that never yet, in the long history of mankind, has there been a single case where such intervention has resulted in the alleviation of poverty. Joseph’s and the Pharaoh’s ever-normal granary in ancient Egypt lured a nation into bondage; the share-and -share-alike-from- a – common -storehouse plan of the Pilgrims at Plymouth Rock had to be aban­doned lest everyone perish; and the agrarian reformers in modern Red China still face the same old consequences of massive coercion: mass starvation.

Not Necessarily So

We may acknowledge that in the comparatively free market economies, even in the United States today, there is no equality of material possessions. Some per­sons have a great deal more than the minimum requirements to sus­tain life, while others face pov­erty; and perhaps there may be some few who actually go to bed hungry at night. But to observe that the free market has not to­tally eliminated poverty does not justify the conclusion that pov­erty, therefore, will automatically be overcome if the market is aban­doned and the government placed in control of distribution.

To observe that a man cannot walk very well with a broken leg does not necessarily mean that he will be able to walk better if we equalize matters by breaking his other leg, too! If a person has only the ability and the incentive to earn two square meals a day, it does not necessarily serve him right to relieve him of the incen­tive—the necessity—to earn those two meals. If the government sub­sidizes poverty, it does not neces­sarily mean that poverty will thereby be diminished; on the con­trary, it necessarily means that poverty will tend to be popularized as a way of life.

The free market rewards those who are most productive, those who serve consumers most effi­ciently, whereas government inter­vention on behalf of consumers rewards those who produce the least and operate most inefficient­ly. These opposed methods of re­ward have different effects on the production process; the market method encourages production, whereas the coercive government method takes away the incentive to produce. Which method will be most likely to alleviate poverty ought to be perfectly clear.

  • Paul L. Poirot was a long-time member of the staff of the Foundation for Economic Education and editor of its journal, The Freeman, from 1956 to 1987.