Consumers aren’t a section of society; they are not different from others. Anyone who buys goods and services is simply a consumer. In a modern economy, a consumer can buy Continue Reading
Consumers aren’t a section of society; they are not different from others. Anyone who buys goods and services is simply a consumer. In a modern economy, a consumer can buy goods and services with help of a tool called money.
Undoubtedly, money is a very important tool, and it is money that assures a basic consumer right. Even producers and sellers are consumers in their day-to-day lives. Importantly, everybody is a consumer. Therefore, consumers need more importance, as they include everyone.
It is not that workers are unimportant, and that we shouldn’t care about them. For example, in a country with a huge youth population like India, the worker-population ratio is around 38.2 percent, according to the 2019–20 PLFS data. This is the percentage of workers in the Indian population. So, it is really important that workers in a nation also live a good life. But to assure them a good life, we need to give workers liberty.
Freedom can help the working class. Freedom to change their firms, freedom to invest their money in any way they want to, freedom to get involved in entrepreneurship, and freedom to do what they want to! Liberty is assured in none other than a system like the free market. Economically, the free market is superior, but morally, it is also superior to any other system. It is important that there is ease of business, that no authority is given ultimate power to control the price system (or interest rates or wages rates), and that there is consumers’ sovereignty.
But the consumers are the most important. It is the consumers that spend their hard-earned money, and they deserve to enjoy it as much as possible. Consumers can benefit the most in a competitive market, whether in terms of prices, quality, innovation, freedom to choose, etc. In India, it is widely observed that the rich consume the products of private firms and enjoy their services more or tend to import foreign goods.
Indian consumers very well know that competition will only help them with more and better options in the markets, but they aren’t able to enjoy good competition because of the difficult of doing business, high tax rates, price alterations, previous lack of support for entrepreneurship, and many other reasons. Another challenge to consumers is the regressive nature of goods and services taxes, which are indirect taxes paid by the consumers and which account for the majority of the country’s tax revenue.
One thing that can be a cruel enemy of both consumers and workers and that everybody fears is monopolies in the markets. Any monopoly is a big danger. There are two types of monopolies, public and private. A public monopoly is state control of production, resources, prices, etc. and can’t be removed. This harms the liberty of people. On other hand, there are also private monopolies, which with the help of the state can control the markets. The real battle is against any form of monopoly.
For example, the biggest monopoly in India is the Indian Railways. People face many disadvantages, and they are very dissatisfied with all aspects of the service (cleanliness, infrastructure, concessions, efficiency, punctuality, and others). Economically, Railways always accounts for deficits—a key feature of the government sector for the “common welfare”—but misallocation, underutilization, and waste of resources have also been reported, which doesn’t sound very fair for the taxpayers.
The free market can help all, presenting a bottom-up approach that gives freedom to all. In a free market, everyone wins: the owners, the workers, and the consumers. A private monopoly in a free market can survive only if 1) consumers are completely satisfied and don’t want to change their product or 2) the price is very low and no new player can challenge it.
If that is the case, then the consumers will still benefit, and no, nobody can control the prices because private monopolist’s friend in authority won’t have any power to help him do it. Compared to other possible systems, it is the free market system that can give any monopoly a hard time. Contrary to what many think, it is a smaller role for government that can prevent a cartel from getting on top. In free market conditions, it becomes difficult for any monopoly to survive in the long run.
A system of “workers’ rights” ends up being detrimental to both workers and consumers, but a system that assures consumers benefits will benefit both. In competitive markets, the consumers are kings, and they are the ones who benefit most, whether in terms of quality, price, innovation in goods and services, or the freedom to decide which factor to prioritize. This system assures consumer sovereignty. Also, workers have the option to change firms as they wish, and they also have the liberty to pursue entrepreneurship or to become investors.
For human prosperity, people must be given liberty. A free market is possible with minimal government involvement in the region. For that we need a strong legal system that can ensure the people’s freedom. When people are free, they are more responsible, and a wise man once said, “Liberty and responsibility are inseparable.”