Consumer Transactions

Laissez-Faire Model

Some have taken the apparent simplicity of current consumer transactions to be a natural phenomenon that stands outside of law, thus promoting a laissezfaire model. However, the idea that consumer transactions are natural and extralegal phenomena is not supported by either history or an analysis of current consumer transactions.

In the history of consumer transactions, the laissezfaire philosophy is quite recent, hitting its peak in the late nineteenth century. Before then, the history of the consumer transaction was marked by sumptuary laws, price controls, and consumer protection regulations. To name a few, Roman law governed warranties; medieval law enforced a “just price”; early modern Europe had numerous laws prohibiting luxurious consumption; and colonial America legislated quality controls.

Rather than revealing the naturalness of the consumer transaction, history reveals a trend marked by the perception of increasing simplicity and the reality of increasing complexity. One can now accomplish in minutes, without leaving home, transactions that once required specialized knowledge, extensive searches, time-intensive bartering, and personal relations. However, this apparent simplicity is made possible by high-technology communication, global distribution, and expansive marketing. Similarly, the apparent simplicity of legal regulation at the point of transaction is matched by increasingly complex legal regulations governing the commodity's manufacture, marketing, and international distribution. This suggests that the laissez-faire philosophy is dependent on a background of extensive legal regulations.

Contract Model

A second model of consumer transaction treats it as a contract. This model leans heavily on the paradigm of barter. Barter is a simple trade between relatively equal partners. It implies the possibility of a succession of trades with the same participants and therefore mobilizes issues of integrity, recognition, and trust. Conversely, consumer transactions take place within a market system of interconnected anonymous transactions. The difference between barter and consumer transactions affects virtually every aspect of the transaction. The price in barter is set through bargaining by the parties involved, while the marketer sets the price in a consumer transaction according to what price will produce the most profit given the market connections between anonymous consumers and producers. With barter, the guarantee of satisfaction is the personal recognition of the exchanging party, while in the consumer transaction the guarantee of satisfaction is in the recognition of the brand, which becomes a sort of quasipersonality. Finally, in barter, the side effects of the transaction are normally local and therefore either obvious or easily discoverable, while a modern consumer transaction may contribute to poverty and ecological damage in unseen locations and in unknowable ways.

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