Demand-Side Self-Interest, Part 2

This is Part 2 of a two-part post. Part 1 is here.  

The demand side of the market should not be understood as just mass expressions of self-interest in consuming certain goods or services. Equally crucial is the fact that a power of a wider social and cultural form of association (or disassociation), and endorsement (or denouncement) rests with the demand-side in a healthy market system. In other words, the demand side of the market is at its best when marketplaces of ideas and association are alive and well as a driving force behind patterns and trends. 

 

This is especially observable today. Many consumers feel that when their dollars leave their pockets it means much more than a signal they like a certain product or service. One-time purchases and ongoing subscriptions can also signal a wider type of endorsement of a supplier, their practices and opinions, or even of their second- and third-tier associations—and the halting of the same can signal the inverse. In fact, many today will describe how they may be satisfied with a product or service from a certain company, but not the company itself, so they stop their association with said company.

 

Indeed, whether it’s wearing merchandise (or destroying it), encouraging others to purchase something (or to avoid it completely), recommending the watching or enjoying of certain content (or promoting the idea no one should watch it), and so on and so forth, consumers make a point about themselves, and not just their purchases. And, today, massive amounts of them will shift spending (or abstain from it) overnight because of one business decision, tweet, association, or anything else they find distasteful from the supply side.

 

And, it is about there where the broader function of the demand side seems to rock the boat too much for those with a supply-side bias. It is certainly telling that many supposed proponents of the virtues of capitalism say or imply that businesses (or comedians selling specials for that matter) are being unfairly treated by consumers that are either now too “woke,” too “politically correct,” too “sensitive,” or too much of something that isn’t good for businesses. In other words, to some, demanders aren’t demanding the right way, and the market is often too chaotic because of stupid, misled, or bewildered herds.

 

Now, whether one agrees with the majority when looking at a given trend or pattern is beside the point—that’s up to one or another’s value judgement. What’s quite interesting to note is it seems that among self-proclaimed capitalists, those with a more reactionary response to fluctuations in demand and among consumers in general are led to a more pro-business bias. And, they seem to lean toward favoring more conservative than liberal outcomes—in certain senses of the words—when it comes to cultural or market outcomes. If so, they might need a refresher on their own supposed ideals as they praise the words of Adam Smith.

 

The stories of true market systems are ones of gains and revenues for businesses, but also of defeats and losses. If it is legitimate that the supply side lives off its successes, then it is just as acceptable that it dies on its failures. If a business wants success instead of failure, it needs to satisfy demand. Similarly, the self-interest coin has two sides. If so many businesses (and, again, comedians for that matter) truly believe it right that they primarily pursue their own self-interest and that consumers should not appeal to their benevolence to get their bread, then it’s also the case that suppliers shouldn’t address themselves to the consumer’s “humanity” to maintain their living, and should instead be mindful of the “self-love” that is driving them too. If it’s only natural that consumers not appeal to their “own necessities” when dealing with suppliers, the same goes for the other way.

 

Indeed, if one reactively sympathizes with supply over demand when the market gives and takes, or they have a hard time seeing what the demand side contributes to the overall robustness of the market beyond simply consuming things, it’s questionable whether the quotes they have been drawing from Smith have helped them truly appreciate and understand what a healthy market looks like, and how the wealth of a nation growing can truly benefit all. And, if one appreciates the wonders of the market only insofar as it produces heroes and elements to admire on the capital side, it might be fair to say they appreciate capitalism and capitalists in the narrow sense that it aligns with certain interests—not markets and how they can benefit the general interest.

Adam Smith and the Costs of the Division of Labor (A Speaking of Smith all-time, Top 10 post)
Are the Interests of Those Who Live by Profit Ours?
Adam Smith on the Interests of Labor and Business

Gregory Robson’s Profitable Business: Adam Smith’s Moral Assessment

Richard McKenzie’s Adam Smith: Myths and Realities, Myth 3: Adam Smith Argued that Markets Would Be Driven Exclusively by the Likes of Gordon Gekko

For Teachers: What Would Adam Smith Say?