Which Consumers Do Consumer Groups Represent?

consumers

Anytime the media covers an issue that might affect consumers, they ask so-called consumer groups for a quote as if these groups by definition represent consumer interests. Check that box. Case in point, a story in Saturday’s New York Times on Monsanto and Dupont Pioneer’s successful efforts to develop genetically modified soybeans that eliminate harmful trans-fats in soybean oil. The reporter argues that these new beans could help the image of the biotech industry because they are among first generation of GMOs that help consumers, rather than farmers.

What? So let me get this right. Past GMO efforts to reduce the costs of growing food (e.g. drought resistant seeds, seeds needing less pesticide application, etc.) don’t help consumers? It seems that the article is making the argument that anything that helps producers, by definition either doesn’t help consumers, or in fact harms them. In this framing, the implicit assumption is agriculture is a monopoly where all improvements in productivity are kept by the farmers, and not passed along to the consumers in the form of lower prices. Wow, did these people never study economics? Apparently not.

But this framing, mirrored by “consumer” and other so-called “public interest” groups, goes beyond GMOs and food. New technologies and practices that help Internet companies better target ads is seen as helping profit-hungry Internet monopolists. Case in point, another article in Saturday’s New York Times decries Facebook’s new ad practices. “Facebook also has big business motivations” (since when did big business have different motivations than small business?) “for finding ways to show the 1.2 trillion posts on its service more frequently and to more people… the more advertising they see and the better targeted these ads can be.” And of course many “public interest” groups supposedly interested in consumer welfare oppose these practices. But when Facebook can place more targeted ads and generate more revenues from those ads, only but the most committed anti-corporate conspiracy theorist would believe that all of the increased revenue goes to profits (even if it did, many consumers are also shareholders of companies, if through no other means than 401k plans or IRAs). In fact, at least a share of the money is used to generate better services on Facebook, of direct benefit to consumers of the Facebook service (who, the last time I looked paid no money for the service.)

In short, its time for those in the media to start to define consumers, not as latte-sipping, Whole Foods-shopping yuppies who don’t mind paying $5 dollars a pound for organic tomatoes, but as the rest of us who not only care about, but depend on big “profit hungry” corporations to relentlessly find ways to get more productive, because we all benefit when they do. Maybe I should start a new organization: “Consumers for Innovation and Productivity”. Or I could just rename ITIF, since at the core that is what our mission is (although in fact, it would be more accurate to describe our mission as “Consumers and Workers for Innovation and Productivity).

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About the author

Dr. Robert D. Atkinson is one of the country’s foremost thinkers on innovation economics. With has an extensive background in technology policy, he has conducted ground-breaking research projects on technology and innovation, is a valued adviser to state and national policy makers, and a popular speaker on innovation policy nationally and internationally. He is the author of "Innovation Economics: The Race for Global Advantage" (Yale, forthcoming) and "The Past and Future of America’s Economy: Long Waves of Innovation That Power Cycles of Growth" (Edward Elgar, 2005). Before coming to ITIF, Atkinson was Vice President of the Progressive Policy Institute and Director of PPI’s Technology & New Economy Project. Ars Technica listed Atkinson as one of 2009’s Tech Policy People to Watch. He has testified before a number of committees in Congress and has appeared in various media outlets including CNN, Fox News, MSNBC, NPR, and NBC Nightly News. He received his Ph.D. in City and Regional Planning from the University of North Carolina at Chapel Hill in 1989.