Consumer (Freedom of) Choice

Freedom of choice is one of the core ideas underpinning the functioning of (post)modern society. Although choice means different things to different people in various points in time, its positive connotations are rarely questioned. Whether it is conflated with consumerism, market, or individual autonomy, choice stands for much wider social, political, and philosophical conditions. The origins of the idea can be traced back to the Western tradition of moral philosophy and, later on, to economics. Recently, though, it has been extended to almost every aspect of life as a part of reflexive postmodernity where everything is negotiable and a matter of individual choice.

However, choice is also an ideological proposition. It is firmly rooted in neoclassic economics and is central to market liberalism given its focus on property rights, individual freedom, competition, and self-interest as it was first conceptualized by moral philosopher Adam Smith, who is also considered the father of modern economics. The idea of freedom of choice is also at the heart of the libertarian social theory developed by Austrian school economists

Friedrich Hayek and his colleagues (Ludwig von Mises and Israel Kirzner) in the 1940s and during the postwar period. In this context, choice stands for the archetypal normative idea and one of the grand narratives dominating public discourse. Furthermore, normative judgments about the value of choice as a manifestation of personal autonomy are still central to moral philosophy concerns, ranging from neo-Aristotelians (e.g., Alistair McIntyre) to neo-Kantian contractarian theorists (e.g., John Rawls).

One way to distinguish between different approaches to choice is to separate normative and descriptive theories concerned with choice by positioning them alongside a continuum that ranges from a priori reasoning of how people ought to make choices to how choices actually happen in reality. Ethics (moral philosophy), jurisprudence, political philosophy, and theology fall into the former category, whereas cognitive psychology and decision science, offering descriptive empirical accounts of how choices are made in real-life settings, belong to the latter. Many economic theories, including rational choice, public choice, and consumer choice theory, occupy a middle ground between normative and empirical accounts, as some of their underlying assumptions of how choices should be made have been disproved; many more remain unverified.

To economists, choice is premised on the belief that the individual is all-knowing, calculating, and an inherent utility maximizer, and thus the best judge of his or her own well-being, and that consumer sovereignty and giving people choice will force them to reveal their preferences. According to these beliefs, choice is best served through the development of active, critical consumers, even if they cannot always act as perfectly knowledgeable agents. Neoclassical economics and their various derivatives (consumer choice or public choice theory) do not claim to literally describe the deliberations that most individuals actually make conscious choices. They rather postulate the deliberations that, if an individual had ever actually made them, would have led to the choices that economic theory predicts.

Consumer choice theory, for example, defines rational consumer choices as those that lead the consumer to maximize his or her utility (satisfaction, happiness). It assumes that utility is derived by getting more of the goods that express the buyer's preferences. Although the marginal benefit of each additional unit of goods or services successively declines, consumer choice theory assumes it is always [Page 240]positive and never reaches zero. Thus, consumers are not only unsatiated, but they are actually insatiable. For them, more is always better. Rational consumer choice thus consists of adjusting the pattern of one's spending to maximize one's utility. To describe and explain in a mathematically coherent way how consumer choices aggregate to form market demand, consumer choice theory has to make many ancillary assumptions. These include the assumption that consumers (or at least, rational ones—consumer choice theory does not consider irrational consumers or their choice, except to dismiss them as “irrational” or an “imperfection”) have well-defined and complete preferences. Because it is difficult to give the concept of utility a plausible evidential basis, variants of consumer choice theory have been developed that, as far as possible, either refine the assumption of utility maximization or replace it.

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