Mises Wire

Consumerism: Don’t Blame the Market for Delivering What People Want

Pope Francis and Ludwig von Mises do not see eye-to-eye on the value of consumer choice. The Pope condemns what Mises defends, and their disagreement goes beyond the obvious.

As everyone knows, the Pope condemns what he calls “consumerism.” In a speech delivered in 2015, for example, he said: “Today consumerism determines what is important. Consuming relationships, consuming friendships, consuming religions, consuming, consuming... . Whatever the cost or consequences. A consumption which does not favor bonding, a consumption which has little to do with human relationships. Social bonds are a mere ‘means’ for the satisfaction of ‘my needs.’ The important thing is no longer our neighbor, with his or her familiar face, story and personality.” People spend too much on material goods, he claimed, and ignore what really matters in life. Why spend money on useless fripperies like household pets and cosmetics?

Mises of course did not know Pope Francis, but he long ago responded to those who raise this sort of complaint against free-market capitalism. Capitalism, he pointed out, is a system of mass production for the masses. It gives people what they want, so long as what they want can be profitably produced. If you do not like what people want, do not blame capitalism. As though he had read the Pope’s remarks, he says in The Anti-Capitalistic Mentality, “Nonetheless many people, and especially intellectuals, passionately loathe capitalism. As they see it, this ghastly mode of society’s economic organization has brought about nothing but mischief and misery. Men were once happy and prosperous in the good old days preceding the ‘Industrial Revolution.’ Now under capitalism the immense majority are starving paupers ruthlessly exploited by rugged individualists. For these scoundrels nothing counts but their moneyed interests. They do not produce good and really useful things, but only what will yield the highest profits. They poison bodies with alcoholic beverages and tobacco, and souls and minds with tabloids, lascivious books and silly moving pictures.”

Mises responds that capitalism is a system of mass production for the masses. It gives people what they want, so long as it is profitable to do so. “The characteristic feature of modern capitalism is mass production of goods destined for consumption by the masses. . . On the market of a capitalistic society the common man is the sovereign consumer whose buying or abstention from buying ultimately determines what should be produced and in what quantity and quality.”

It is exactly at this point that the opposition between Mises and Pope Francis deepens. Whether the Pope has read Mises I do not know, but he is familiar with the argument Mises gives. His response is that even if capitalism does give people what they want, it is still deficient. What Mises considers a virtue of capitalism is in fact a vice. The Pope says, “The result is a culture which discards everything that is no longer ‘useful’ or ‘satisfying’ for the tastes of the consumer. We have turned our society into a huge multicultural showcase tied only to the tastes of certain ‘consumers’,”

In brief, it is wrong to give consumers what they want if they want the wrong things. To answer the Pope, we need to address two points. First, even if people do choose badly, are they not acting within their rights? To coerce them into a simpler and less materialistic style of life would be to interfere with their freedom to spend their money as they wish.

Of course, the Pope could, and no doubt would, answer this by denying that people have robust property rights. Rather, the spending they are permitted to indulge in must be guided by the “common good.”

Here, though, the Pope would need to confront another problem to which Mises called attention. After citing several theologians with views of capitalism like that of Pope Francis, Mises pointed out: “They fail to recognize the speculative character inherent in all endeavors to provide for future want-satisfaction, i.e., in all human action. They naively assume that there cannot exist any doubt about the measures to be applied for the best possible provisioning of the consumers. . .The advocates of a planned economy have never conceived that the task is to provide for future wants which may differ from today’s wants and to employ the various available factors of production in the most expedient way for the best possible satisfaction of these uncertain future wants.” ( Human Action, Scholars Edition, p.672) In brief, the Pope would have to solve the socialist calculation problem.

The argument just given is that even if the Pope is right to criticize consumerism, he fails to indicate a workable alternative system. One can also, though, criticize the Pope’s argument more directly. Is it in fact bad for people to spend vast sums of money on consumer goods? Lew Rockwell has ably argued that it is not. “Sure, it’s easy to look at all this and shout: ghastly consumerism!. . . Maybe you think quality of life is no big deal. Does it really matter whether people have access to vast grocery stores, drug stores, subdivisions, and technology?. . . Consider life expectancy in the age of consumerism. Women in 1900 typically died at 48 years old, and men at 46. Today? Women live to 80, and men to 77. This is due to better diet, less dangerous jobs, improved sanitation and hygiene, improved access to health care, and the entire range of factors that contribute to what we call our standard of living. Just since 1950, the infant mortality rate has fallen by 77 percent. Population is rising exponentially as a result.

It’s easy to look at these figures and suggest that we could have achieved the same thing with a central plan for health, while avoiding all this disgusting consumerism that goes along with it. But such a central plan was tried in socialist countries, and their results showed precisely the opposite in mortality statistics. While the Soviets decried our persistent poverty amidst rampant consumerism, our poverty was being beaten back and our longevity was increasing, in large part because of the consumerism for which we were being reviled.”

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