Sovereignty and Socks for the People!

The people’s sovereignty is important. Not just in politics, but in markets, too. It’s called “consumer sovereignty.”

The other day I argued that consumers are sovereign even when a company can’t please everybody. Why? Because we don’t have to buy, every good touted. And we can always switch companies.

In politics, you may vote for Candidate A over B. But if enough others vote for B, you’re stuck with B.

In the market it doesn’t matter how many people prefer Campbell’s Soup to Progresso, if you hate Campbell’s you don’t buy it. Period!

This doesn’t mean that you get everything you want. Economy is all about scarcity, and so our satisfaction will be limited, too. Let’s all agree: Utopia’s not an option.

Some years back I attended a debate between a pro-market politician and an anti-market politician. The pro-market guy mentioned consumer sovereignty. “Consumer sovereignty?” scoffed the anti-market guy. “I wear size 10 socks. And yet all the socks offered me are size 10 to 13. How am I sovereign? Businesses determine what I get!”

Well, if you demand an exact match for everything you want, you’ll often be displeased. Yes, businesses decide what to produce. But they decide based on what they can sell. If consumers won’t buy, then they go broke. That’s why businesses accommodate a lot of diversity.

They’ve even invented elastic bands on socks, so sizes 10 through 13 can fit nicely on a great many feet.

That’s some feat, if you ask me.

This is Common Sense. I’m Paul Jacob.