In our zeal to protect the "innocent" consumer, we need to recognize that each protective step necessarily limits our productive capacity as a nation. It may be argued that a wealthy nation can afford such luxury and, though this is true, we need also to take into account the price we are paying for consumerism.
Risk is inherent in every consumer purchase—in every consumer act—and man can do nothing to alter that fact. The efforts of man to eliminate risk in the market place contain much political appeal but are nonetheless futile because the reduction of one kind of risk must always be accompanied by a compensating increase in another kind of risk. The cost of protection is deprivation. But the cost of consumer protection is not apparent. We have no way of putting a value on the sacrifice in foregone products and services that a free market could provide.
Perhaps a specific illustration may help to expose consumerism in its true light. I have heard it said that if strawberries were a manufactured product, they would be restricted from the market today because so many people are allergic to them! Indeed, the long arm of consumerism will soon reach back to the products of the farm as it already has in its intense concern with antibiotics, insecticides, herbicides, and fertilizers.
Anyway, my little story has to do with unit pricing. A few years ago someone had the thought that if all products in the retail store were price-marked in equivalent units of pounds, quarts, square feet, and the like, then the consumer could better identify the best buy. There was an implied assumption that the variety of package sizes on the market were a calculated attempt to deceive the consumer.
Gradually the idea began to catch on and more and more people began to accept and champion it. I know of no strong bona fide consumer support for the idea but I do know of a lot of passionate pleas made by consumerists who thought the idea had merit, especially for people on a tight budget.
But, as in any fight, charges and countercharges flew wildly. The merchants claimed that the costs of so marking products would be prohibitively expensive—that the net increase in cost would be borne by the consumer. The consumerists claimed that such marking would enable some consumers, and particularly those who needed it most, to save up to 10 percent on their grocery bill. No one really had any facts, though the idea sounded plausible and workable. This is the typical way consumerist issues arise and generate support, first among those who would like to do something for the consumer, and then among consumers who innocently become effective consumerists without really knowing it. It also reveals the typical negative reaction of the business community which serves only to add the fire of certainty to the consumerist’s eyes.
Fortunately, this is one idea that could be tested with reasonable preciseness, and one of my colleagues at Cornell undertook to do that in a chain of stores in the Midwest. The most interesting of his conclusions is that both the costs and benefits were grossly overstated. The costs in the smallest stores ran to over 4 percent of the sales value but in large supermarkets they amounted to less than a tenth of one percent of sales. But a check of product movement over time indicated no significant shift in purchases by the consumer. In two broad food categories the consumer actually shifted her trade up to the higher cost per unit item; in the cereal category she shifted to lower-cost packages; and there was no change in the others. Surveys of consumers shopping these test stores revealed that awareness of the availability of the information was greatest among the high-income, well-educated consumers. Despite these findings, the only real facts on the issue available, it is my prediction that the consumerist will continue to champion unit pricing, will continue to talk about how it will benefit the poor, and eventually will succeed in getting widespread regulations making unit pricing mandatory.
The issue of unit pricing did not originate from any factual base, and accordingly, facts are not likely to alter the decisions of those who champion its cause. It makes no difference that the theory of unit pricing is based on a false and strictly materialistic premise. It makes no difference that it gives the large merchant a competitive advantage over the small. It makes no difference that the wealthy take greater advantage of the information than do the poor. Even if the benefits are not very great, it may be argued that the costs are insignificant. At least the consumer doesn’t need a computer when she shops and she gained a notch in her right to be informed. But is the cost really insignificant if we add this to the hundreds of other laws and regulations that have been forced on the consumer within the last several years Through a test conducted in some stores it is found that ______.