The Behavioural Economy: Consume This, Canada!

Rather than empower consumers, then, they are obliged to insist that consumers are weak, helpless without the interventions of their Lord Protectors.  After all, if it could be left to the impersonal forces of the market, what reason would there be to elect one part over the other?

An interesting analysis, as always, by Andrew Coyne - but one that doesn't go far enough.

Coyne appears to favour a completely unfettered free market that puts consumers first in fact, rather than in theory.  Laissez-faire capitalism, in other words, with consumers expecting the best of everything at the time they want it and producers competing for business, creating market balance.

A theoretically "free" market may be impersonal, but it's also predicated on rules of economic theory - not human neurochemistry, i.e. behaviour.  This is why we find ourselves swinging back and forth between variations on the same political conundrums in cycle.  It's also why our current societal model is unsustainable.

Healthcare is an easy example.  If I'm outsourcing my healthcare, I'm not caring for it myself.  If I'm a laissez-fair employer, I've bought my workers' labour, so they better deliver - it's up to them to buy their healthcare on their own time.  If I'm government and I figure it's up to the market to sort out healthcare, I cut and run, helping reduce my financial costs.  

But then people don't take care of themselves.

Healthcare is preventative, but consumerism is about what I can get, not what I can prevent.  

Consumerism is about ownership of stuff, not about maintenance.  If you skip out on health now, you can always buy a fix down the road, right?  But only if you're wealthy enough, which means working harder now.

When nobody is investing in health - those with the least amount of disposable income in particular - people get sick.  Untreated sick people who have to keep interacting with society to function economically function less efficiently, spread contagion and put the whole at risk.

And that's just healthcare.  It gets even worse when you look at poverty management, environmental (natural and constructed) maintenance and issues of justice.

We're at a point where the configuration of our current social model simply isn't adequate to the challenges it faces, and it's apparent that the political survivors calling the policy shots have no idea where to go next.

It not just about the economy.  It's about culture of entitlement it evokes.  We can choose to remain ignorant to this fact, but the rules of behavioural economics are like evolution that way - it doesn't matter if you believe in them or not.

The Low Hanging Fruit

The profound irony is that the more Canadian politics focuses on communication - as witnessed by the 25 per cent and upward increases in Ottawa communications jobs under Liberal and Conservative governments since the beginning of the 21st century - the less message is getting through.

In her new book Shopping for Votes: How Politicians Choose Us and We Choose Them, Susan Delacourt discusses two key, interlocking issues of our times:

The bleed of consumerist culture into public services

     

The Tragedy of the House of Commons

People want what they want because they want it - and, as they're constantly told by the ads, they're worth it.  Online, in person, or via Smart Phone, sellers are more than willing to comply - shouldn't government services be the same?

Politicians realize people want the low-hanging fruit; they've also realized that, under first-past-the-post, they don't need every voter any more than every Canadian needs every product.  Our pols and their handlers pick and choose the coalitions that will provide wins, feeding them information that just pertains to them in packages that hit the right emotional triggers.  Everyone else is discarded, disenfranchised - or misdirected.

This is exactly how capitalism is supposed to work - we buy what's sold to us and if we don't like product A, we simply buy something else.  If a certain product or service proves consistently lack-lustre or outmoded (like, say, horses and bayonets or rabidly partisan politicians) people stop buying in to them entirely, seeking more emotionally satisfying alternatives.

Businesses are going for the policy low-hanging fruit, because they are too efficient to worry about the complex.  Government's are focusing on sector-specific low-hanging fruit, because it's more expedient; it allows them to spend their ballooning marketing budgets wisely and reduces the need to spend more on complex, strenuous consultation and negotiation processes.  Voters want clear, concise information that explains a system in a soundbite - if the politicians, the salesmen, can't do that, oh well - they need the voters more than the voters need them.

What everyone from our economics-trained Prime Minister down to the average Double-Double drinker seems to forget is that economies of scale offer better value than feudal competition; divide and conquer does just the opposite.  Canada is a complex demographic system, a machine for which Conservatives hope to dismantle the framework.

It's not an approach that can work, but that's a topic for another day.

Stephen Harper's Slide to the Policy Centre

Despite all his strangulation of Parliament and disingenuity to the public, Stephen Harper doesn't want to be a dictator.  His goal isn't to be the lord and master, but rather to foster a society that feels more comfortable to him.  It doesn't seem to work out that way, does it?  For all the right-wing political gains that can be made and partisan points he's scored, there is an inevitable gravitational pull to the centre of the policy spectrum.

It's funny how that happens...



Stephen Harper shows flashes of consumerism: Goar

There are three theories about what’s going on:

 

The first is that Harper has matured as political leader. He recognizes that market forces can lead to collusion, price-fixing and a lessening of healthy competition; that throwing the doors wide open to foreign investment entails too big a risk; there is a role for government in setting and enforcing standards.

 

The second is that Tory strategists have figured out it makes more sense to court consumers — who also happen to be voters — than captains of industry and commerce.

 

The third is that a bias toward consumers is an inevitable by-product of Ottawa’s ban on corporate donations and cancellation of public subsides to political parties. Dependent on the grassroots — the people who watch TV, own smartphones, buy and sell houses and pay bank fees — for electoral funding, any party has a powerful incentive to serve its financial supporters.

 

None of these is likely to please corporate leaders.

 

The only explanation they’ll countenance is that Harper has strayed from his free enterprise principles, testing their goodwill.