Consumer Policy (United States)

Consumer policy is the domain of public policy devoted to addressing the marketplace problems of buyers of goods and services. Consumer policy is made in the executive, legislative, and judicial branches of government and at the local, national, and international levels of government. Whereas individuals decide every day through their purchases what they perceive to be in their personal consumer interest, consumer policy represents a collective interpretation of what constitutes and promotes consumer welfare. Consumer policy thereby reflects deeply held cultural values regarding the rights and responsibilities of consumers and the various businesses with which they transact.

The primary goals of consumer policy are to assist consumers in making sound decisions and in resolving any problems that arise after purchases have been made. Policies that require information on package labels or prohibit businesses from colluding to raise prices reflect the first goal; and policies setting minimum standards of product safety or establishing small claims courts for consumers to quickly and inexpensively seek redress exemplify the latter goal. Industries that, over time, have been most visibly influenced by consumer policy involve food, pharmaceuticals, motor vehicles, tobacco products, and credit. Examples of federal statutes controlling these industries stretch from, in 1906, the Pure Food and the Drug Act and Meat Inspection Act to, in 2009, the Family Smoking Prevention and Tobacco Control Act and the Credit Card Accountability, Responsibility and Disclosure Act.

[Page 291]The first step in the process of creating a consumer policy is placing an issue on the policy agenda, the list of problems that people inside and outside government believe require serious attention at any given time. The work of placing problems on the policy agenda is accomplished by what Michael Pertschuk calls policy (or social) entrepreneurs. Whereas business entrepreneurs drive innovation in for-profit organizations, policy entrepreneurs seek transformational change that will benefit broad groups (such as consumers) and/or society at large.

Consumer policy entrepreneurs have contributed to fundamental shifts in cultural definitions of consumer problems. The most basic change occurred around the turn of the twentieth century and involved a transition from caveat emptor, the notion of buyer beware, to an acceptance of some degree of government responsibility for consumer welfare. Consumer policy entrepreneurs have also brought about other dramatic cultural shifts. For example, until the 1960s, automobile-related accidents were considered the fault of “the nut behind the wheel.” Consumer activists, led by Ralph Nader, successfully promoted the idea that changes in car design could reduce the number and severity of automobile-related accidents. Similarly, antismoking activists initially faced a culture that denied the dangers of cigarette smoking or, paradoxically, blamed any adverse health outcomes on people who should have realized the obvious dangers of smoking. Consumer policy entrepreneurs, over a period of several decades, changed the culture of smoking to the point where cigarettes are viewed as inherently dangerous and meriting tight control, including restrictions on marketing them to children.

An accident, tragedy, or scandal will often catapult a consumer problem onto the policy agenda, but such events are rarely sufficient to create a consumer policy. Policy entrepreneurs must also offer specific and credible policy proposals, mobilize public support, effectively lobby policymakers, defend their proposals against groups who might oppose them, master the art of compromise, ensure proper policy implementation, and evaluate policy effectiveness. Often, by the time the policy process has run its course, the original consumer problem has morphed and requires renewed attention from policy entrepreneurs.

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