Who Protects the American Consumer?

In these troubling economic times of unemployment and stagnation, Americans are looking for answers. Why is the economy so bad? Who can fix it and how? And who's looking out for us, the little guy, the consumer? President Obama's new jobs bill and protesters' continuation of operation Occupy Wall Street in opposition of what they view as an unfair economic environment that favors corporations at the expense of consumers reinforce such questions. So how can we protect consumers from the evil, exploitative corporations who seek only to profit at our expense?

It's a sad fact of life that the answer these days is so counter-intuitive to most folk. But in fact the greatest protection we consumers have in a capitalist economic system is capitalism. Capitalism is what allows consumers to choose among the best and cheapest products available. If I don't like a product or the practices of the corporation who make that product, I don't have to buy from them. In a truly capitalist system, no one is forced at the end of a gun to buy one product over another. Corporations rely on consumers. If businesses do not sell products that consumers want and need at a price competitive with other firms, that business will go broke. Corporations are ultimately subject to the wants of consumers, and in a true capitalist market consumers may choose to stop spending their money on one business's product because they either dislike the product or dislike the business, and take their money to another business that better suits their desires. We, the consumers, have the final check on corporate power.

So why the anti-business climate in America today? Well, the American political system and expanding government has merged with what used to be our free, capitalist economic system so that it has become difficult to tell when one ends and the other begins. Businesses and entrepreneurs respond to incentive. The incentive to produce goods that satisfy the wants and needs of consumers is what brings us cheap, quality products from a number of competitors. But when the government steps into the economic process, it creates a whole new set of incentives for the entrepreneur and business owner to respond to. If a government creates a number of new regulations in an industry in hopes of "protecting" the consumer, it creates incentives for large businesses to put their foot into the door of government. They pay off elected officials to waive these regulations specifically for them, and to win contracts for all the big public projects the growing government funds. Government also creates the environment which brings about unnatural monopolies. As regulations increase, so too do barriers to entry into many industries, and it becomes harder for new firms to compete with the corporate giants who already have the officials in their pockets and have collected all the market power. Why should a corporation care about sound financial practices and protecting the interests of their shareholders when the government will bail them out when they're in financial trouble? They wouldn't when the government has created an incentive for irresponsibility. And who could blame GE and others for jumping at the opportunity to pay 0% corporate income taxes when our intervening government presented them that opportunity?

We must not forget that in our dynamic economy, we do not assume only one economic role for the rest of our lifetime. A consumer is a producer, and a producer is a consumer. We are all "workers" and without the entrepreneurs who have invested their time and capital into the businesses we work for, we would have no income to buy goods from other producers, who then pay workers so they may be consumers as well. The market has an uncanny ability to regulate itself and capitalism is the best means of ensuring that we all prosper and that wealth and resources are allocated fairly and productively so that our economy may continue to grow. It is intervention from the government and the unholy marriage between it and businesses that offsets that balance which true capitalism instills. The state hurts the consumer despite its best efforts to protect him. If we really want to see economic prosperity and employment we need only leave the economy alone and allow the plans of many individuals to again trump the larger plan of the bureaucratic few.