Skip to main content icon/video/no-internet

All economies in the world can be described as being primitive barter economies, command economies, or free market economies. Regardless of the type of economy, they are composed of three basic parts: production, distribution, and consumption. In barter economies, most production is subsistence. Even with limited trading, the choices are usually limited to what is offered for trade. However, archaeological evidence suggests that favorable trading usually occurred because the consumers were pleased with the goods offered. Otherwise, the silk and spice trading of the ancient to medieval world would not have occurred.

Command economies involve totalitarian control. They include economies controlled by Nazis, communists, socialist movements, and others. In the case of the Nazis, private ownership was retained in law, but virtually all economic decisions were directed by the party's commands in production, and often in distribution. Communist and socialist and other totalitarian command economies have offered their workers and consumers an equal share of goods they produce on the principle that equal distribution is economic justice. However, the production in egalitarian command economies creates shoddy goods because production is created by people who have little in the way of incentive to do any work or to do quality work. As a result, consumers in these economies purchase what is available to them simply out of necessity.

Green consumerism, a growing focus of consumer politics, has brought attention to more environmentally friendly transportation, such as bicycling. This has resulted in increasing numbers of bicycle paths and lanes, but safety remains a problem.

Market economies have allowed goods to be produced in large quantities in a competitive producer battle that has often encouraged innovation. Competition occurs in market economies because freedom for many producers to enter into production is allowed. Battles over wages and working conditions have occurred in these economies, but where there is product competition, they play a role that influences production and consumption. The consumer is then the beneficiary of opportunities to “vote” for one producer over another by spending money to purchase one producer's product rather than another's. However, the formation of a monopoly or an oligopoly by one or a few firms can limit consumer choice. At times, a monopoly can offer a price for its products that is cheaper than that for goods made in more competitive markets. This was the case with the kerosene produced by the Rockefeller monopoly. At other times it may be that consumer choice is denied by a manufacturer with a virtual monopoly. This was the situation when Henry Ford made the statement that consumers could buy a Ford automobile in any color they wanted, as long as it was black.

How it Began

The modern consumer rights movement began in response to the oligopoly conditions of the American automobile industry. In the 1950s, U.S. industry was flourishing still as result of its survival and growth during World War II. Much of the industrial plants of Europe and Japan were still being rebuilt. In the rest of the world, industry was still much smaller than in the United States. As a result, the automobile industry could build cars that were responsive to market tastes or to the interests of the companies, but consumer concerns had limited influence in automobile design, safety, or other factors. Into these conditions Ralph Nader entered by first publishing as a study at Harvard Law School articles on consumer safety in the Harvard Law Record. In 1959, he published “The Safe Car You Can't Buy”—which was critical of automobile safety—in The Nation. In 1965, he published Unsafe at Any Speed.

...

  • Loading...
locked icon

Sign in to access this content

Get a 30 day FREE TRIAL

  • Watch videos from a variety of sources bringing classroom topics to life
  • Read modern, diverse business cases
  • Explore hundreds of books and reference titles

Sage Recommends

We found other relevant content for you on other Sage platforms.

Loading