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The Illusion of Consumer Sovereignity in Economic and Neoliberal Thought

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  • Wolfgang Fellner

    ()

  • Clive L. Spash

    ()

Abstract

Contemporary economic policy discourses are heavily oriented towards competition and efficiency using modern conceptualisation of the market as an institution for resource allocation and governance. Market based policy approaches are considered necessary and sufficient instruments to achieve environmental goals while leaving individual freedom largely unaffected. This neoliberal position crucially depends upon the concept of consumer sovereignty. It encapsulates the idea that individual consumption is the only source of value and consumers are able to enforce their interests on producers via their power in the market place. Despite the concept of consumer sovereignty having huge importance in contemporary economic theory and policy, its meaning remains opaque. We explore how consumer sovereignty has been employed for political instrumental, market ideal and economic instrumental reasons by classic liberals, neo-Austrian and Neoclassical economists respectively. We go on to show that the concept of consumer sovereignty depends upon a series of problematic assumptions and fails to bear much relationship to reality. The theoretical basis of consumer sovereignty on individual preferences proves problematic, not least due to its ethical presumptions. Environmentalists search for what makes a just and sustainable society and neoliberalism is answering with the rhetoric of consumer sovereignty. This paper shows why that answer needs to be rejected and why environmentalism actually means critically rethinking the role of markets in society.

Suggested Citation

  • Wolfgang Fellner & Clive L. Spash, 2014. "The Illusion of Consumer Sovereignity in Economic and Neoliberal Thought," SRE-Disc sre-disc-2014_02, Institute for Multilevel Governance and Development, Department of Socioeconomics, Vienna University of Economics and Business.
  • Handle: RePEc:wiw:wiwsre:sre-disc-2014_02
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    File URL: http://www-sre.wu.ac.at/sre-disc/sre-disc-2014_02.pdf
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    References listed on IDEAS

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    1. Spash, Clive L. & Hanley, Nick, 1995. "Preferences, information and biodiversity preservation," Ecological Economics, Elsevier, vol. 12(3), pages 191-208, March.
    2. Galbraith, John Kenneth, 1970. "Economics as a System of Belief," American Economic Review, American Economic Association, vol. 60(2), pages 469-478, May.
    3. Jonathan Aldred, 2006. "Incommensurability and Monetary Valuation," Land Economics, University of Wisconsin Press, vol. 82(2), pages 141-161.
    4. Screpanti, Ernesto & Zamagni, Stefano, 2005. "An Outline of the History of Economic Thought," OUP Catalogue, Oxford University Press, edition 2, number 9780199279142.
    5. Richard Arena & Christian Longhi, 1998. "Markets and organization," Post-Print halshs-00458044, HAL.
    6. Clive L. Spash, 2008. "How Much is that Ecosystem in the Window? The One with the Bio-diverse Trail," Environmental Values, White Horse Press, vol. 17(2), pages 259-284, May.
    7. Spash, Clive L., 2000. "Ecosystems, contingent valuation and ethics: the case of wetland re-creation," Ecological Economics, Elsevier, vol. 34(2), pages 195-215, August.
    8. Joseph Persky, 1993. "Retrospectives: Consumer Sovereignty," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 183-191, Winter.
    9. Spash, Clive L., 2002. "Informing and forming preferences in environmental valuation: Coral reef biodiversity," Journal of Economic Psychology, Elsevier, vol. 23(5), pages 665-687, October.
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    Cited by:

    1. Spash, Clive L., 2015. "Bulldozing Biodiversity: The Economics of Optimal Extinction," SRE-Discussion Papers 4450, WU Vienna University of Economics and Business.

    More about this item

    Keywords

    Neoliberalism; Austrian Economics; Market Economy; Heterodox Economics; Consumer Theory;

    JEL classification:

    • B00 - Schools of Economic Thought and Methodology - - General - - - History of Economic Thought, Methodology, and Heterodox Approaches
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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