Power Rests in the Hands of the Consumers Under Globalisation

The definition of the ambiguous term globalisation that will be used for the duration of this essay is of a process, initiated and perpetuated by economic action, of global importation and exportation of capital, ideology and culture - Power Rests in the Hands of the Consumers Under Globalisation introduction. The question asks, through careful discussion, to assess the dissemination of power and how it is affected by the globalisation of the world. The means by which power is disseminated is by the Classical Liberal theory of economic democracy; power is derived from the consent of the majority established in the consumer ballot of the free market.

Whilst as a concept it is widely accepted, the direction of this essay will be to challenge this view with reference to relevant theory, events in history and case studies. This will be the primary means of assessing the power held by consumers and what some believe to be the compromising and detrimental effect globalisation has on said power. Robert Dahl’s concept of one-dimensional power (Lukes, 2005: 18) is the concept most akin to the theory of economic democracy. When related to the question it involves two actors, the consumer and the producer.

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Those with power are those who prevail in decision making most frequently. In vying for the consumer’s consent or investment, producers satisfy Dahl’s pre-requisite for “observable conflict” and in decisions made (to invest or not, and in whom) the consumer “regularly prevails” (Lukes, 2005: 19). By this definition consumers hold total power but in its applicability to the question it fails on two counts. First it is unrepresentative of modern global commerce and secondly it is nescient of the more subversive means by which power can be acquired in such a situation.

The former of these failings can be resolved by replacing the producer (those vying for the consumers investment) with a capitalist who as Marxists believe owns the producers “means of production” (on a global scale this will be elaborated upon later). The latter is improved by Bachrach and Baratz (Lukes, 2005: 20) who criticized Dahl for being “restrictive” and added another layer in their two-dimensional theory; that of agenda setting.

Whilst consumers make regular decisions it must be observed that either the producers or the capitalists hold power over them by selection of what the consumer can choose from. Because of this consumers are prevented from taking any action (besides choosing not to buy, but imagine the producers/capitalists are selling a necessity like bread) that would be detrimental to the producers/consumers. Whilst this produces a more realistic exchange in which the consumers and producers/capitalists share power of different kinds, the circumstances are still distinctly overt.

Steven Lukes rectifies this with the suggestion that the ultimate power is the ability to shape desires, he says: “Indeed, is it not the supreme exercise of power to get another or others to have the desires you want them to have – that is, to secure their compliance by controlling their thoughts and desires? ” (Lukes, 2005: 27). Following the rise of globalisation came the emergence of the Trans-National Corporation (TNC) and their respective Trans-National Advertising Agencies (TNAAs).

Leslie Sklair saw in their activities in the third world the utilisation of Lukes’ “third face of power” through the use of relentless advertising campaigns to manufacture what she called “induced wants” and Herbert Marcuse called “false needs” (Sklair, 1991: 131). She cites Nestle and its marketing of milk formula in third world countries as an example in which an intrusive advertising campaign transformed a desire for milk formula into a dependency despite the deaths and illness it caused (Sklair, 1991: 157).

This action has severe implications on consumer “sovereignty”. First and foremost it limits the ability of the consumer to make a rational, uninfluenced choice (or else why would mothers capable of breastfeeding opt for a milk substitute so dangerous to their babies’ health? ). Thus secondly it further impedes the consumer’s ability, by Bachrach and Baratz’s two-dimensional power, to act in a way unfavourable to the capitalist (note the lack of the producer as the geographical separation of producer and consumer is a facet of globalisation).

In the instance of necessities (thus negating the consumer’s ability to refuse to invest) it could be said that consumers are totally powerless, their choices limited and their preference pre-determined by another actor. This is, of course, an overstatement of the influence wielded by advertising agencies but there does appear to be a correlation between the stage of development of a nation and its resilience to influence. As a result of the Nestle milk formula campaign in Chile between the years 1957 and 1970 there was a 75% reduction in the number of women breastfeeding their children (Multinational Monitor, 1987).

A similar campaign in European states produced far weaker results, but that is not to say that developed countries are less subject to advertising. The total market domination of Apple’s iPhone and their advertising techniques, regardless of superior competition, is illustrative of how similar means produce similar ends and consumer power is subverted and diminished. In the case of Nestle’s milk formula however, consumers were discontented by the harmful influence the company was having on mothers globally.

A boycott of all Nestle products was organised in the United States of America and spread quickly to Europe where it was widely supported. Consumers who took part in the boycott exercised total power in the situation by Dahl’s one-dimensional definition, but it is imperative to note who these consumers were and even more importantly where they come from. The movement was constructed and orchestrated by relatively wealthy citizens of the developed west.

This is the basis from which to draw the conclusion that whilst universal participation is a facet of political democracy the same cannot be said for economic democracy; private wealth is undoubtedly a qualifying factor. How this manifests itself in the global system is recognised by Folker Fri??bel (1980) as the new international division of labour. It is observable in a national economy that the wealthiest have more purchasing power and thus can exert more influence on their surroundings.

Frobel believes that “These national economies are, rather, organic elements of one all-embracing system, namely a world economy which is in fact a world-wide capitalist system” (Frobel, 1980: 8) in which the wealthiest nations exert the most influence on their surroundings. Just as in a national economy those who are poorest cannot hope to exert much influence on their economic environment, but on a global level it is nations, not classes that make up the poor and the rich.

The relationship between the capitalists and the producers is the most interesting relationship, having already established that the power of consumers is at very least influenced and at most vacuous and pre-determined. Whilst in some nations like South Korea producers can hold the power to contend with that of the capitalists, as Bretcher and Tim (Bretcher and Tim, 1998: 87) observed, “relatively skilled workers began to use shop-floor strikes to demand better pay and better working conditions”.

There are key differences in a third world country however, such unionisation and striking is often illegal and because of high unemployment the population constitutes a “nearly inexhaustible source of the cheapest and most exploitable labour” (Frobel, 1980: 26). “The direct producers are deprived of their means of production and are then forced… to sell their labour power permanently on the labour market to the owners of the means of production [the capitalists] in order to maintain their means of sustenance”.

Producers in the third world do not hold the one, decisive power that producers in more economically developed countries exercise, the ability to withhold their labour. Because of the unskilled nature of the work they perform and the “inexhaustible” source of labour any pursuit of strike is met with unemployment and loss of their “means of sustenance”. In this situation the capitalists hold almost total two-dimensional power over the subjugated producers as they are prevented from acting any way that would be unfavourable to the capitalists.

Globalisation places the capitalist executives of TNCs in an incredibly powerful position. Both producers and consumers in the third world are to differing extents manipulated to do the capitalists’ bidding. Only producers and consumers in the developed world are in a position from which they can check the power of the TNCs, and their potential is being gradually eroded by (a facet of globalisation in the west) the outsourcing of labour; Only 23. 5% of the UK’s work force are what Marxists would consider producers and this number is in decline whilst China and India have become the manufacturing nations for the world.

There is a risk when states allow for such concentration of power that economic power can subsume other powers, even the political power of a legitimately elected government. States in the third world are incentivised and persuaded into taking enormous loans from bodies like the World Trade Organisation, World Bank and the International Monetary Fund. It is often found that involvement of these transnational institutions has a negative effect on the populations of the countries whilst financially benefiting the already wealthy.

A study by analysts from Cambridge and Yale Universities showed that the IMF focus on monetary policy and the minimisation of the state (including the national health services) in 21 Western-European countries led to a 16. 6% increase in tuberculosis mortality (IMF Programs, July 22nd 2008). In this case the power of the political consumers is undermined when an unfavourable and irrational (in the eyes of the consumers) decision is made on the whim of an unelected, illegitimate, economic body.

Cavanagh and Mander describe in their book Alternatives to Economic Globalisation the concentration of economic power as “the Achilles heel of (political) democracy, as the experience of corporate globalisation demonstrates” (Cavanagh and Mander, 2004: 25). They also recognise the threat posed to consumers and see the existence of Consumers International (their intention being to defend the rights of “all consumers, especially the poor, marginalised and disadvantaged” (Cavanagh and Mander, 2004: 351)) as evidence of this threat. International bodies as a whole, however, are not inherently bad for political consumers.

The European Union (EU) as a legitimate political institution, elected by its member states every five years is a key example of the benefits globalisation can facilitate. There is the question of whether power is compromised by EU membership and the ability of other members to influence the national decision making process, but equally the political consumer is bequeathed the ability to influence the actions taken by all other member states. The establishment of the European Convention on Human Rights, spurring the Human Rights Act in the United Kingdom established a balance of power ensuring both consumer and producers rights are protected.

The weakness in the EU as a defence of the power of consumers lies the geographical and economic positions of its member states. Whilst there is some variation, in comparison to the wealth and power of states outside the EU membership is exclusively for the developed world. The purpose of this essay was to assess, through careful discussion, the extent to which consumers wield power in the globalised world. The stated thesis was that the power wielded, although always present, is limited by wealth inequality and by the actions of other actors; namely the producers and capitalists that intersect the two of them.

This thesis has been proved accurate to a great extent but the additional correlation of geographical location determining consumer and producer power serves to further improve its applicability. The power held by consumers fluctuates dependent on the actions of capitalists in their vying for investment and geographical location whilst the power held by producers has been, in the third world, almost entirely vanquished and absorbed by their capitalist rulers.

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