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blame the consumers

Who should be held accountable for tragedies like the Bangladesh factory collapse that killed so many garment industry workers? Jerry Davis, writing in the Sunday New York Times, says that consumers need to recognize their blame in the global marketplace.  Consumers demand cheap products, which forces companies to pressure their suppliers to cut costs at every corner. The loser is the laborer who makes the initial products in the supply chain.

Our willingness to buy garments sewn under dangerous conditions, chocolate made from cocoa picked by captive children, or cellphones and laptops containing “conflict minerals” from Congo create the demand that underwrites these tragedies….If we want to see fewer tragedies like the one in Bangladesh, we as consumers need to reward the companies that make the effort to verify their supply chains and shun those that do not. Make it unprofitable to be unsafe.

While I agree with Jerry, in principle, that consumers’ demand for low-cost items will inevitably lead to these sorts of problems, consumers are actually very inertial creatures. If we put all our hopes in changing the global marketplace in the wallets of people like Joe Schmoe from Brownsburg, Indiana, we’re not likely to see much change. Most changes in supply chain management begin with a few committed activists who are willing to go out and pressure the company through “naming and shaming” tactics.  Public humiliation still seems to work.

 

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Written by brayden king

May 12, 2013 at 11:09 am

13 Responses

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  1. I see a few problems with this. First, if the all powerful consumer was driving this, we wouldn’t see businesses making high profits, because that too raises costs. This is not the case. Second, even with expensive goods, where consumers are willing and even eager to pay high prices, we see similar working conditions (think Apple products).

    In addition, “our willingness” to buy products produced under these conditions is an odd way to talk about it. Businesses spend a lot of energy obscuring these working conditions, to tell those who are concerned about it that they have improved them, will work to improve them, or that they aren’t that bad or that they are inevitable.

    There’s also the question of where consumer demand comes from. Does it spring immaculate from the unorganized consumers, or do corporations shape it? John Kenneth Galbraith argued long ago that it was the latter, and this makes more sense to me.

    That said it terms of the remedy, I think you are right. It’s not just inertia, but the ability to act – the mass of consumers aren’t organized, and even if they were, it’s almost impossible to buy products that are made in better conditions. That makes voice, as opposed to exit, the more fruitful strategy.

    But when people believe that consumers are what drives this, I think they are less likely to engaging in these naming and shaming tactics, because consumer choice is seen as default legitimate.

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    David Kaib

    May 12, 2013 at 11:30 am

  2. But if people started accepting blame, how could they continue to sue for everything?

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    Marjory J Munson

    May 12, 2013 at 11:40 am

  3. I have begun to consider the whole idea of “Group X has chosen this; therefore, it is justified” as it relates to African Americans appearing to support zero tolerance, “no excuses,” and “get tough on crime” policies that many believe to be racist. Thus, how can these policies be racist if AA “choose” them? Michelle Alexander addresses this well in Ch 5 of THE NEW JIM CROW and points a finger at the mechanism that CREATES the false choice: If AA must choose, she argues, between high-crime, crumbling neighborhoods and “get tough on crime policies,” the choice is obvious, but the false dichotomy is the source of the problem—and that “choice” doesn’t justify racist policy.

    In the context of this post, and David’s response, let’s consider how much power the consumers genuinely have.

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    plthomasedd

    May 12, 2013 at 11:44 am

  4. […] of the awful Bangladesh factory disaster that killed at least a thousand people, Brayden King at Orgtheory quotes Jerry Davis in the New York Times who blames consumers for working conditions in […]

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  5. A couple of points here. First, there is no such thing as “the consumer”. In all countries, especially OECD nations, consumers are extraordinarily fragmented and many businesses are founded to respond to the fragments. Yes, I know about the hegemony of Wal-Mart, but observe that not everyone buys everything there, despite the possibility one could. Some people make consumption choices on ethical bases. The easy ones to point to are Fair Trade coffee and sugar, animal-welfare friendly meat and eggs, and Buy Local. Buyers, and the retailers who serve them, are making demands for ethical and socially responsible supply chains. Galbraith was wrong in the late 50s and 60s — to the point he really believed in the disappearance of consumer sovereignty, and his writings are quite dated now. If there was an active sociology of consumption, this would be a fruitful arena for research.

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    Randy

    May 12, 2013 at 4:50 pm

  6. I would not summarize my argument as “Blame the consumers,” and tried to be careful not to phrase it this way. (See the first sentence quoted above.) I would also advise anyone who wants to comment (like David) to read the full Sunday Dialogue, including my response at the end, rather than jumping at the phrase “blame the consumers” without reading through the whole argument.

    The argument is not that consumers prefer cheap products and are therefore guilty, and everyone else is excused. Supply chains are dispersed in many industries, and companies whose names are on the product, or the retailers that sell the product, are often several steps removed (e.g., HP and conflict minerals). Moreover, companies have limited incentives to track their supply chains, unless failure to do so is costly. Shareholders will not demand it. In an industry like garment manufacture, Bangladesh is in competition with Cambodia, Haiti, Honduras, Sri Lanka…and so domestic governments are inherently conflicted. The governments of end-consumers (such as the US) have limited ability to regulate labor practices in other countries, other than through awkward work-arounds like the conflict mineral section of the Dodd-Frank Act. (Congress can regulate securities issuers, but corporate governance is governed at the state level.)

    If we want to change corporate behavior, we need to change consumer demand. “Naming and shaming,” boycotts, and public humiliation only work if consumers care and change their buying habits. Imagine a publicly-traded chocolate company whose shares are controlled by a multi-billion dollar trust on behalf of a residential school for underprivileged kids. Would such a company continue to buy cocoa from suppliers that rely on captive children (often themselves orphans) in Cote D’Ivoire? Absolutely, as long as people keep buying it. (To track the seemingly endless boycott, visit http://www.raisethebarhershey.org/) Similar examples are legion. Pointing to one or two success stories of naming and shaming needs to be balanced out by the endless non-success stories. It is simply not sufficient. Close down Bangladesh (a la Disney), and it will be Vietnam next. And none of this will change what appears on store shelves, as long as people keep buying it.

    Would it make any difference if consumers cared (e.g., felt guilty)? Not consumers one by one; the question is how to get them to aggregate into a meaningful force. The tools for researching goods on the fly are getting better. (Before you go grocery shopping, visit http://howgood.com/ and you’ll see why you might prefer Organic Valley to Horizon if you’re looking for milk. Or http://www.goodguide.com/ for clothes and other items. There are free downloadable apps that allow you to scan product codes at the store to get immediate ratings.) Demand for ratings or other certifications can create better suppliers of information, shift demand for products, and change the incentives facing businesses to choose sources properly. Obviously other dynamics are in play, but in the absence of changed demand, it is hard to foresee much progress as long as supply chains are dispersed across national boundaries.

    But nothing works if consumers do not care. If people cheerfully buy goods traceable to horrendous conditions, then boycotts, naming and shaming, or whatever retail-level tricks we have will not work. If it became part of the standard package for consumers to be aware of the provenance of their goods to the extent possible, things might change, and local activists and governments would have more clout. My first step was to suggest that, at least morally, they bear some responsibility.

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    jerrydavisumich

    May 13, 2013 at 2:12 am

  7. Is there a “no one makes you shop at Wal-Mart” analog for the producers? Something along the lines of “no one makes you buy cocoa from suppliers that rely on captive child labor in the first place?” Oh, you want to sell chocolate and there’s another firm offering a similar quality product at lower prices? Are they using captive child labor? You suspect so? How badly do you want to sell chocolate?

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    Mark H.

    May 13, 2013 at 2:20 am

  8. I just discussed responsibility issues with a global B2B equipment supplier. If you think garment industry and Apple are bad, think for a second about companies that supply equipment to the petrochemicals industry and other heavy industries.
    There is very limited customer demand for responsibility. Mostly the businesses have units for “health, safety, and environment”, which does not naturally attend to conflict minerals, child labor, or social changes.
    If we take consumer-first approach to institutional change, it is going to take a whole lot of time for business practices to change upstream in the supply chain. This can happen though. For example, German consumers have forced newspapers to force their paper suppliers to look at the way the wood they use as raw material is produced. But German consumers are atypically nature-conscious, particularly the newspaper-reading classes.

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    Henri

    May 13, 2013 at 9:04 am

  9. Labor standards have increased concomitant to economic growth wherever it’s happened. Before the Bangladeshis took the garment industry from South Korea (where it is notably unprofitable to make t-shirts anymore because people are so rich there now), they were starving.

    And in fact, it is much more likely that interaction with western businesspeople creates a cultural spillover whereby foreign plant owners adopt new ethical standards from their business partners, for the treatment of workers. Linda Mosley found that labor standards and foreign direct investment measures are positively correlated. Ethical standards/expectations don’t exist when one’s workers are flocking from 12-hour a day backbreaking subsistence farming, child prostitution, and the other markets that thrive before garment factories open up shop.

    As workers get richer, they demand greater non-pecuniary benefits on the job, like safety and bathroom breaks. The idea that working conditions get worse over the long run because of downward pressure on them from competition ignores the other side of the competitive story — that these workers bid up their wages as firms compete for their labor. This story is wholly supported by reams of data on economic growth; it is a genuine mystery why people continue to believe that capitalism makes workers in the developing world worse off.

    That said, I think NGOs do a great service by putting public attention on companies and persuading them to be nicer.

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    Graham Peterson

    May 13, 2013 at 12:59 pm

  10. There’s some great discussion of related issues here: http://www.bostonreview.net/BR38.3/ndf_richard_locke_global_brands_labor_justice.php

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    timbartley

    May 13, 2013 at 9:04 pm

  11. I had an opportunity to write a longer piece for YaleGlobal that aims to address the interaction among states, corporations, and consumers, and why coordinated consumer action might help force companies to maintain more accountable supply chains:

    http://yaleglobal.yale.edu/content/can-global-supply-chains-be-accountable

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    jerrydavisumich

    May 18, 2013 at 2:17 am

  12. Thanks for that, Jerry. The following paper, which models the exertion of pressure on companies by activist groups, looks really good: http://onlinelibrary.wiley.com/doi/10.1111/j.1430-9134.2003.00031.x/abstract

    Like

    Graham Peterson

    May 22, 2013 at 1:07 am


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