Consumerism in Global Perspective

Part 2: Chapter Objectives, Summarizing Outlines, And Case Notes

Consumerism

LEARNING OBJECTIVES

How the nations first prominent consumer activist, Harvey W. Wiley, battled consumer fraud in the early 1900s. The meaning of consumerism as both an ideology and a protective movement. How consumerism arose and spread in the United States and the world. Why the values in consumerism attract criticism. How government agencies set up a protective shield for consumers. How the law of product liability protects consumers. About issues raised by advertising of alcoholic beverages.

SUMMARIZING OUTLINE

The chapter begins by telling the story of Harvey W. Wiley, a crusader for pure food laws in the early

1900s. Consumerism is defined. The rise of consumerism as a powerful ideology of material

acquisition is explained. Then the actions of government agencies to protect consumers are reviewed.

Finally, basic legal protections for consumers in product liability law are discussed. At the end of the

chapter, the case study raises questions about alcoholic beverage advertising.

The introductory story is about Harvey W. Wiley.

Wiley was a principled and idealistic man. He came to Washington, D.C., to head the Bureau of Chemistry in 1883. This small agency was charged with detecting

adulteration in foods.

Wiley discovered widespread fraud and impurity in foods. He campaigned for laws that would give him the power to regulate food companies and protect the public.

As part of this campaign he staged a melodramatic experiment in which he fed small groups of volunteers common chemical preservatives suspected of having harmful

health effects. The volunteers were known collectively as the poison squad.

The experiments and other pressures moved Congress to pass the Pure Food and Drug Act in 1904.

Wiley and his agency, which would grow into the Food and Drug Administration, were charged with enforcing the new law. But Wiley failed. His strict, vigorous, and

uncompromising enforcement alienated industry leaders, who succeeded in

undermining his authority.

Wiley resigned in frustration and defeat. He spent the rest of his life working for consumer causes.

Consumerism is a word with two meanings.


First, consumerism is a movement to promote the rights and powers of consumers in relation to sellers of products and services.

Second, consumerism is a powerful ideology, in which the pursuit of material goods beyond subsistence shapes social conduct.

Consumerism as an ideology appeared for the first time in Western Europe about 300 years ago. Its appearance is explained by the rise of conditions that gave new importance to the

acquisition and display of material objects. These conditions include the following.

Economic progress.

Expanding trade with colonial empires that brought in new products.

The rise of small shops and innovations in advertising and marketing such as window displays and print ads.

The decline of religious doctrines that stifled pursuit of material pleasures.

The rise of individualism.

Growth of cities.

The breakdown of traditional status boundaries.

Consumerism gathered strength in the United States in the late 1800s, after similar changes prepared the ground. The changes included these.

Ascetic Puritan theology relaxed its grip.

Individualism grew stronger.

International trade expanded, the American economy grew, and some became affluent.

Expansion of the railroads created national markets.

A merger wave created large businesses to serve these markets.

New consumer products such as autos, watches, and refrigerators appeared.

People left small towns and moved to growing cities, joining waves of immigrants.

Traditional status distinctions loosened.

Critics of consumerism as an ideology of material life have fought a losing battle against its spread.

Economist Thorstein Veblen satirized consumers who spent, not to gain ordinary utility from their purchases, but to create invidious comparison with their neighbors

and display status through conspicuous consumption.


One alternative to consumerism, that of simplified, utilitarian living, has been advocated by a long line of critics, from Henry David Thoreau to Ralph Nader.

Attempts to create sanctuaries from consumerism, including Sunday closing laws for stores, known as blue laws, and efforts to keep advertising out of schools and reduce

advertising aimed at children, have failed.

Critics make these arguments, all based on the idea that material values undermine higher values.

Consumerism leads to commodification of life. People are judged by their possessions.

Consumption for emotional reasons encourages unwise, unproductive uses of money.

Heavy consumption wastes natural resources.

Consuming luxury items evidences the sins of gluttony and greed.

Consumerism distorts values. For example, it converts profligacy into social status.

Consumerism is a pathology of corporate capitalism that leads corporations to manipulate consumers.

Consumerism is a global phenomenon that rises everywhere when its necessary social and economic conditions come together in developing countries.

The rise of consumer ideology is paralleled by a movement to protect consumers from fraud, deception, and greed using government power.

In the United States this movement began with the Populists and the Progressives in the late 1800s and early 1900s.

A new era of progressive activism in the 1960s and 1970s prompted a more recent wave of legislation to protect consumers.


Consumer critics, including Ralph Nader and Vance Packard, created public discontent and support for government action.

President Kennedy gave impetus to the movement in a 1962 speech to Congress setting forth basic rights of consumers.

Congress responded by passing more than a dozen consumer protection statutes and creating four new federal consumer agencies.

Since the mid-1970s, consumer activists have been less successful in getting new laws. However, spending to enforce existing laws has grown

continuously as consumer agencies mint new rules.

More than fifty federal agencies are active in consumer affairs. These major agencies are discussed.

The Consumer Product Safety Commission (CPSC) protects consumers from unreasonable risks of injury and death from consumer products. It has created

hundreds of safety standards and mandated hundreds of recalls.

The National Highway Traffic Safety Administration (NHTSA) mandates safety rules for autos and auto accessories.

The Food and Drug Administration (FDA) regulates food safety, pharmaceuticals, and medical devices.

Product liability is a doctrine in the law of torts that covers redress for injuries caused by defective products. There are three fundamental theories.

Negligence. Under this theory manufacturers and sellers have a duty to do what a reasonable, prudent person exercising ordinary care would do under the same

circumstances.

In the late 1800s and early 1900s product liability doctrine was undeveloped and manufacturers were protected from findings of negligence by two

obstacles in the law.

First, the principle of caveat emptor, a Latin phrase meaning let the buyer beware, imposed responsibility on consumers to inspect

products they bought. The legal presumption was that if a product had

a defect, the injured consumer should have been wary and spotted it.

Second, the principle of privity held that consumers could sue only the party that sold them the product. This made it difficult to sue

manufacturers and hold them negligent.

Both principles became outmoded as America grew into a consumer society and courts broke them down.


One milestone case was MacPherson v. Buick Motor Co., in which the court held that a consumer could sue Buick, the manufacturer, directly.

Buick was found negligent for a defect in the wheel.

Warranty. A warranty is a contract in which the seller guarantees the nature of the product. If the product does not conform to the standards in the warranty, the buyer is

entitled to compensation for any consequent loss or injury. Two kinds of warranties are

recognized.

An express warranty is an explicit claim made by the manufacturer to the buyer that the product will perform in a specified way.

An implied warranty is an unwritten, commonsense warranty arising out of the buyers reasonable expectations that a product will fulfill its ordinary purpose and the particular purpose of the buyer.

A landmark case is Henningsen v. Bloomfield Motors, in which the court held that limitations on the express warranty for a Plymouth were

overridden by an implied warranty that the car was suited for ordinary

use.

Strict liability. Under the doctrine of strict liability manufacturers and sellers can be held liable without a showing of negligence. It applies where the product is

inherently dangerous even if properly manufactured.

The landmark case is Greenman v. Yuba Power Products, in which a consumer who was injured using a power tool sued the manufacturer and

won after the court held that, although the company had not been

negligent, the machines design was defective.

Product liability law is intended to compensate victims and to deter future corporate wrongdoing. A basic trend, through the twentieth century but especially since the 1960s, is expansion of this

law to favor injured plaintiffs.

Product liability lawsuits create both benefits and costs. They are responsible for removing many dangerous products from the market. On the other hand, they dampen

innovation and impose insurance costs on companies.

Industry also complains of frivolous lawsuits. Two lawsuits against McDonalds are discussed in this context.

The first is Pelman v. McDonalds Corp., in which the guardians of obese children tried to hold McDonalds responsible for selling fattening food. The plaintiffs have not brought it to trial because they have not been able to meet

criteria of merit used by federal courts.


The second is the well-known case of Liebeck v. McDonalds Restaurants, in which a woman was burned when she spilled hot coffee on herself. The jury held

McDonalds liable after testimony that the company chose to continue selling super-hot coffee after repeated instances of consumers burning themselves. The

judge reduced the jurys high punitive damage award to an amount that conformed to Supreme Court guidelines.

In sum, this chapter discusses two perspectives on consumerism. First, consumerism is a powerful ideology that has swept across America and the world. Second, as a protective movement,

consumerism has led to expansion of government power to regulate business and expansion of

legal doctrines designed to protect consumers from fraud and injury.

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Consumerism in Global Perspective