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Dogma Premise # 40

 Capitalist competition leads to more choices, and therefore more freedom.

Another alleged virtue of capitalism is that it leads to more choices, and therefore more freedom. In socialist countries, it is said, citizens cannot choose their own schools, physicians, or even their own food (see, e.g., Top Ten Greatest Benefits of Capitalism). Instead, citizens must stomach whatever lifestyle options are approved by an impenetrable and unresponsive government bureaucracy.

This Dogma Premise is particularly engaging to US consumers, who have been trained not only to expect ready availability of products carefully tailored to their market-segment-driven-psychographic-characteristics, like Coke Zero rather than Diet Coke, let alone the Coke-Pepsi challenge. And that doesn't even consider the extent to which marketers successfully convince consumers to actually relate their own identify to products and brands.

And for most Americans, it's a deal-breaker. It sounds a little crazy, but for most people the idea of not being able to choose from among several varieties of toilet paper, paper towels, chocolate milk, coffee, mini-van, or window cleaner really does feel like an unreasonable and undesirable restriction of freedom.

Imagine if the government determined that there was only one type of window cleaner that everyone must use, and it was the equivalent of Windex, or Windex with Vinegar, or just a Vinegar solution, or only could be purchased in an ugly re-usable bottle without a spray pump. Most people I know would be very suspicious of this.

By painting capitalism as a fountain of free consumer choice, and any other system as oppressively homogeneous, capitalist propagandists effectively foreclose any discussion of alternatives.

But of course, as with all the other Dogma Premises of Capitalism, the suggestion that Capitalism is a fountain of consumer free choice compared to other systems has it backwards. Therefore, consumers serious about variety of experience should be among capitalism's most aggressive critics.

This is true for three reasons.

First, capitalism is anti-variety. Variety comes with a certain cost, which is why capitalists always prefer less variety. If the market can be satisfied with the same car in three different colors, those cars can be produced with much less cost (leaving more money for profit) than if the market wants three significantly different cars. This is why marketers focus consumers on minor features, such as color, scent, size, and packaging, rather than encouraging real diversity.

Second, capitalism creates fake variety. In addition to limiting substantive variation whenever possible, to minimize plant investment and production costs, capitalists also rely on pretend variations to create an appearance of diversity, for several reasons. First, offering a dozen or more flavors of spaghetti sauce that are all subtle variations on the same base allows the capitalist to satisfy consumers' psychological need for product diversity at a minimal cost. Offering a great variety of flavors may also have the effect of knocking competing brands out of the store entirely by using up all the available shelf space.

Third, presenting a large number of different brands that are actually produced by a single company hides the extent to which real market competition, which is the alleged engine of variety, has actually been eliminated.

Alternate systems have no bias against small markets and can easily serve markets of one, with whatever scale economies are available.

Offering a great variety in clothing, restaurants, food, entertainment is easily accomplished under any economic system. It only matters whether people in fact want variety, whether they are able to convey their desires, and whether the system intends to satisfy those desires, whenever possible or only whenever profitable.

In capitalism, for the most part, central planners (corporations) decide what choices to offer, and consumers convey their preferences by either trying the product and continuing to use it, or not.  If there is a big enough market, and if the opportunity is sufficiently profitable, the corporations may decide to continue offering the new product, or they may pull it from the market, to the group of consumers deemed inadequately profitable. The power to decide, however, lies entirely with the central planners, and they are free to do whatever suits them.

In a socialist economy, citizens may decide how much variety is desirable. It is easy to imagine citizens preferring LESS variety when it comes to generic goods like paper towels and napkins, preferring one or two good varieties rather than a plethora of similar or inferior types. However, citizens might prefer MORE variety in food or clothing, demanding a better selection than what a relatively small number of elite designers and restauranteurs decide to provide.

The point is that it is easy for people to convey their preferences (we do it every day), and it is easy for a group of people to come together in a community and say let's fill our downtown with inexpensive restaurants, or fancy restaurants, or world cuisine, or convenient foods, or health foods. Most likely people will prefer a diverse mix. The main thing to understand is that there is no particular bias in an economic democracy against variety, and no logistical problems with providing it.

In reality, an economic democracy would probably approach variety in the manner suggested by Edward Bellamy in Looking Backward. If a million citizens preferred a particular kind of watch, the cost would end up being relatively low, because of the scale economies. If tastes changed, and the following year only 100,000 people preferred that type of watch, the cost would likely increase somewhat.

If a single citizen preferred a peculiar type of watch that no one else wanted, the cost of producing it would be very high. However, that unique watch would nonetheless be produced for that citizen if the citizen wanted to pay the cost.  And if the cost were prohibitive (e.g., if that citizen would rather spend more on travel and less on time-pieces), the citizen might convince more people to choose the unique watch, which could bring per unit cost down significantly and make the special watch affordable.

The economic democracy, therefore, offers a scope of variety unmatched by any capitalist system.  In a capitalist system, the only varieties offered are those the capitalist chooses to offer -- that is, which are considered adequately profitable. In an economic democracy, there are no artificial limits placed on the variety of goods and services available, other than the actual cost of providing them, which is the only cost to be charged to those who desire the product

Capitalism pretends to offer variety while actually homogenizing its goods and services. Economic democracy is just the opposite, offering all the variety desired by the citizens, but does not fake or unwanted variety to maximize private profits.

As it stands now, most commercial beverages in the world are manufactured by Coca Cola or Pepsi. It is paradoxical that there would be outrage over the loss of free choice that might result if a single provider, a democratically accountable government, provided every beverage desired by consumers. But when two private corporations do the same job, with no democratic accountability, and in fact they have financial incentives against providing variety, this is called the epitome of freedom and nobody bats an eyelash.

Dogma Premise 41

All Dogma Premises

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