A Pessimist's Simplistic Historical Perspective on the Fourth Wave of Consumer Protection

Beginning of article

The current severe economic downturn, coupled with scandals of business misfeasance and malfeasance, raises expectations for another surge in the U.S. consumer protections. Because it happened three times before, the human temptation to seek historical parallels readily fuels either optimistic hopes or the paranoid ravings of fact-free commentators on a broadcast news network. A simplified historical perspective brings an odd mix of hopeful optimism and reluctant pessimism.

**********

Four decades ago, "consumerism" became a broadly accepted term for the political and social movements seeking to protect consumers by requiring businesses to provide nondeceptive advertising, product guarantees, honest packaging and improved safety standards. But over the decades, the most common uses of the term morphed back to Thorstein Veblin's 19th century criticisms of consumption itself, what he described as the modern world's economic order based on the systematic creation and development of widespread desires to purchase mass-produced products in ever greater amounts. In this sense, consumerism becomes synonymous with the excessive shopping which is periodically referenced as the true religion of the modern secular world. In a third definition found in modern business usage, consumerism became a positive marketing term, focusing on what consumers want to buy and a managerial determination to make it available.

At the founding of JCA, academic research on consumer affairs referenced studies of the consumers' interests in the marketplace, research conducted from the customer point of view. Yet today, in publications dedicated to business management, consumer studies become market segmentation, the analysis of what interests groups of present or potential customers, even though research of what interests groups of consumers is not necessarily studies of the consumers' interests.

This changing variety of meanings indicate the different ways a consumer interest can be defined. And so it was through time. A simplistic shorthand perspective of past consumer movements tells an evolving tale of how businesses are seen in relation to their customers. Each prior wave of consumerism is noted in textbooks for a precipitating scandal during a concurrent economic recession or depression that resulted in eventual political reactions. The nature of those political or legal remedies was rooted in the views of the times, but a mini-review of those past movements provides an understanding of hopes for a new consumer movement or pessimism for its limitations.

Most regular readers of JCA are probably familiar with the detailed history of past consumer movements. But to make the point, a retelling is necessary. I will try to be brief.

In the first period of consumer protection in …