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Consumerism

This session:

Defines and discusses the idea of consumerism.

Describes the protective shield of statutes,regulations, and consumer law that has risen toprotect consumers since Harvey Wileys era.


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Consumerism

Consumerism is a wordwith two meanings:A movement to promote

the rights and powers ofconsumers in relation tosellers.

A powerful ideology in

which the pursuit ofmaterial goods beyondsubsistence shapessocial conduct.

Consumer

A person who usesproducts andservices in a

commercialeconomy.

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Consumerism asan Ideology Consumerism describes a society in which

people define their identities by acquiringand displaying material goods beyond

what they need for subsistence. The full emergence of consumerism came

as economic changes interacted withcultural and social developments.

Declining influence of religion

The industrial revolution

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Consumerism in Perspective

Marketing research reveals a widespread,profound effort to find love, status, and individualityin products.

Materialism is an emphasis on material objects or

money that displaces spiritual, aesthetic, orphilosophical values.

Thorstein Veblen, in his book The Theory of theLeisure Class, challenged the conventionaleconomic wisdom that consumers bought goodsfor their functional utility.

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Consumerism in Perspective (continued)

Complaints about consumerism include:

It leads to commodification of all parts of life

It encourages unwise, irrational, and

unproductive uses of money Heavy consumption is profligate with natural

resources

Consuming beyond necessity violates the idea

the Gods world is already full and complete It distorts our values

It is a pathology of corporate capitalism

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The Consumers

Protective Shield Besides federal laws and regulations, there are

significant protections at the state and local level.

Every state and local government has extensiveconsumer protection laws.

More than 50 federal agencies and bureaus areactive in consumer affairs.

These agencies and bureaus are effective despitechanging ideologies in administrations, powerfulcritics, budget restraints, and too little staff to meetall their statutory mandates.

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mpor an eg s a ons onConsumer Protection in

India Essential Commodities Act Prevention of Food Adulteration Act

Prevention of Black-marketing and

Maintenance of Supplies act

Trade Marks and Merchandise MarksAct

Sale of Goods Act

Indian Patents and Designs Act

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mpor an eg s a ons onConsumer Protection in

IndiaAgricultural Product Grading andMarketing Act

Indian Standard Institute's Certification

Act

Standard Weights and Measures Act

Imports and Exports Controls Act

Packaged Commodities Order

Price and Stock Display Order

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An important landmark in consumer protectionendeavors in India is the Consumer ProtectionAct 1986

(i) District Forum

(ii) State Commission

(iii) National Commission

The Competition Act 2002, which replaced theMRTP Act, contain provisions to deal with

monopolistic, restrictive and unfair tradepractices.

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The Consumer ProductSafety Commission

Created by Congress in 1972.

Directed by six major statutes that mandate it to: Protect the public against unreasonable risks of injury and

death associated with consumer products

Help consumers evaluate the safety of products Develop uniform safety standards for products

Promote research and investigation related to product-related deaths, illnesses, and injuries.

Often cooperates with business.

Regulates every consumer product exceptguns,boats, planes, cars, trucks, foods and drugs,cosmetics, tobacco, and pesticides.

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The National Highway TrafficSafety Administration

Created by Congress in 1966 to: Mandate minimum safety standards for

automobiles, trucks, and their accessories.

Establish fuel economy standards.

Administer state and community highwaysafety grant programs.

Conduct research on, and development anddemonstration of, new vehicle safety

techniques. No other agency has such extensive

controls over a single product.

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The Food and DrugAdministration Evolved out of the authority established by

Congress in the Food and Drug Act of 1906. Nineteen specific areas of responsibility.

Examples:

Regulate the composition, quality, safety, andlabeling of food, food additives, and cosmetics. Require premarket testing of new drugs and

evaluate new drug applications and requests toapprove drugs for experimental use.

Develop standards for the safety andeffectiveness of over-the-counter drugs. Inspect and license manufacturers of biological

products.

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Other Consumer ProtectionAgencies The Federal Trade Commission

The Environmental Protection Agency

Occupational Safety and Health Administration

The Food and Safety Inspection Service

The Securities and Exchange Commission

The Department of Health and Human Services

The Equal Employment Opportunity Commission

The Federal Deposit Insurance Administration

The Pension Benefit Guaranty Corporation

Transportation Security Administration

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Product Liability Law

Beyond regulation, a majorrestraint onbusiness is the ability of consumers to fileproduct liability lawsuits when they areharmed.

The tort system is designed to providecompensation to victims and to deter futuremisconduct.

Product liability is the branch of tort lawthat covers redress for injuries caused bydefective products.

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Negligence

A tort involves either an intentional or anegligent action that causes injury.

Obstacles to consumers in early product

liability law: Caveat emptor Narrow interpretation of the doctrine ofprivity,

which held that consumers could sue only theparty that sold them the product

This legal protective wall for manufacturerswas broken down by the milestone case ofMacPherson v. Buick Motor Co. in 1916.

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Warranty

A warranty is a contract in which theseller guarantees the nature of theproduct.

An express warranty is an explicitclaim made by the manufacturer to thebuyer.

An implied warranty is an unwritten,commonsense warranty arising out ofthe buyers reasonable expectations.

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Strict Liability

The doctrine ofstrict liability established thatanyone who engages in a dangerous activity isliable for damages to others, even if the activity isconducted with utmost care.

The key to strict liability is that the injured personneed not prove negligence to prevail in court.

Under strict liability an injured plaintiff must proveonly that: The manufacturer made a product in a defective condition

that made it unreasonably dangerous to the user

The seller was in the business of selling such products It was unchanged from its manufactured condition when

purchased

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Perspectives onProduct Liability

The U.S. legal system makes it easierfor plaintiffs to win large damage awardsfrom product makers than do the

systems of other countries. Nowhere else in the world has the legal

system created such a favorable

environment for product lawsuits as inthe United States.

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Cost and Benefitsof Lawsuits A recent estimate is that the tort system inflicts an annual

economic cost of $865 billion on society, about 2.8 percent ofGDP, more than triple the percent average of other industrialnations.

Dangerous products have been either taken off the market,had their sales restricted, or been redesigned.

Lawsuit threats and high liability insurance costs regularlycause companies to drop high-risk products.

An unknown number of new products never come to market

because their liability potential scares manufacturers. Business argues that product liability law has moved beyond

equitable victim compensation.

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Concluding Observations

Consumerism is a word with two meanings: itrefers both to a kind ofsociety and to aprotective movement.

Consumerism as a way of life is spreading

around the world because the conditions thatsupport it are becoming more common.

Consumers in the United States are now moreprotected from injury, fraud, and other abuses

than in the past because of strongergovernment regulation and more consumer-friendly common law doctrines.

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