Consumer Boycotts – Civil Right or Anarchy? / *Ehud Peleg
Tnuva,the main milk products manufacturer in Israel, became, few months ago the target to a boycott, declared by the national students association.
Mr. Shraga Brosh, the president of the Manufacturers’ Association, described the consumer boycott ,recently, as “anarchy.”
Is indeed a consumer boycott a revolt against the principles of democracy, or is it actually an appropriate, legitimate expression of the consumer’s power.
A consumer boycott, firstly, sets a limit: a limit to greed, a limit to the unfettered rapaciousness of business corporations, which takes place under the guise of an ostensibly respectable economic term: maximizing profits. A consumer boycott is an uprising by the victims against a breach of the golden rule in democratic society – live and let live – and of the value of consideration for others as its ethical code.
There is a distorted, erroneous perception of the concept of “freedom” which defines it in terms of “do whatever you want”; this is, in effect, anarchy. The behavioral norm that it engenders is the law of the jungle – only the strongsurvive. To turn that definition into that of egalitarian freedom, three words need to be added: “without harming others.” Control your behavior, in such a way as to be considerate of others, and leave them a reasonable space in which to function. The high level of prices in Israel was not an expression of freedom in commercial behavior, but of a lack of sensitivity and disregard for others on the part of the major corporations. That is the anarchy in this story, Mr. Brosh.
Those corporations did not take into account that the consumer public would react; they thought that they could continue to take advantage of them. This was their error.
It is true that, when it came to the cost of living, the public relied on the protections afforded them by the government. It was expected that the government would create the conditions that would ensure a reasonable supply of goods – for example, in the area of housing. In turn, this would ensure a reasonable relationship between supply and demand, and thus reasonable prices.
The public expected that the State would promote conditions for healthy competition, which would allow multiple players to compete for the public’s attention, in areas such as quality, service and price. Apart from isolated examples – such as the Ministry of Communications – the public’s expectations were disappointed, and so there began a series of protests and demonstrations, aimed at awakening the government and drawing attention to the need for it to carry out its role in this area, and protect the public from inflated prices.
simultaneusly, within the framework of supply and demand, consumers turned the demand side, and declared a consumer boycott.
The “balance of power” between businesses and customers is based on the fact that the consumers need products and services, but at the same time businesses need the consumers; products that get left on the shelf don’t put money into the shareholders’ bank accounts, and even cost them dearly.
If consumers are willing to pay the price of deferring their satisfaction and are willing to stop buying products for a certain period – long enough to cut into the incomes of businesses – they can strengthen their position and tilt the rules of supply and demand in their favor.
Is this an appropriate way to achieve a market that operates in a fair and reasonable manner?
War is never a first option; it is a necessity that, at times, is inevitable. Where the administration does not take sufficient steps to create appropriate market conditions, and pricing by businesses is exaggerated or even excessive, high prices should be seen as a declaration of war against consumers, and it is then appropriate for the consumers to react – with full force.
When the history of the Israeli economy comes to be written, the consumer boycotts of the recent weeks will be inscribed in letters of gold, as an expression of the power that consumers have, if they would only make use of it.
I am certain that the crisis advisors who work with commercial corporations are working overtime now.
They should take a moment to recall that, in Chinese, the term for “crisis” is made up of two words – danger and opportunity. It might be appropriate for them to advise their clients to see the present crisis as an opportunity to build the future of commerce in Israel on fairer and more considerate foundations, both in terms of respecting the rights of consumers, and in terms of reasonable profits for business owners.
If the situation were fairer, there would be no further need for consumer boycotts
* Ehud Peleg is CEO of the Israel Consumer Council