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Does Responsible Consumption Benefit Companies More Than Consumers?

Fair trade coffee and hybrid cars don't solve our environmental and social ills. But they do shift responsibility for big problems to consumers, two researchers argue—leaving businesses and politicians a free pass.

Does Responsible Consumption Benefit Companies More Than Consumers?

[Top Photo: Flickr user Angelo DeSantis]

Hybrid cars. Energy-efficient lightbulbs. Fair trade coffee. There are all sorts of products nowadays that promise to solve environmental and social problems. We're in an era of "responsible consumption" where companies sell us goods that do better by the planet and make us feel better about our place on it. But do they make any meaningful difference?

Not according to a new paper by Markus Giesler and Ela Veresiu, two researchers at York University's Schulich School of Business, in Canada. They argue that responsible consumption subtly shifts responsibility for big problems to consumers, leaving corporations free to continue as usual. Meanwhile, the people who should be changing the game—government and regulators—are left to one side.

Flickr user Paul Keller

"When businesses convince politicians to encourage responsible consumption instead of implementing policy changes to solve environmental and social problems, business earns the license to create new markets while all of the pressure to solve the problem at hand falls on the individual consumer," write Giesler and Veresiu in the Journal of Consumer Research.

Giesler and Veresiu analyzed materials from the World Economic Forum in Davos—an event well-known for executives grandstanding on social issues—including task-force papers and press releases. Then, they came up with a four-step model for how their theory plays out. First, problems that we might think are political are redefined as failures of individuals: consumers buying the wrong type of cars, for instance (Hummers not Priuses). Second, economic elites promote the idea that individuals are the only ones who can fix problems (by switching to more sustainable lifestyles) because politics is broken. Third, corporations create new markets for cars, lightbulbs, and so on. And, finally, consumers adopt their new roles.

Giesler and Veresiu see this model at work in the creation of a succession of responsible capitalists, including "bottom-of-the-pyramid" consumers, green consumers, health-conscious consumers, and financially literate consumers.

In an interview, Giesler says he doesn't necessarily see anything nefarious in this. Many executives seriously believe that catalyzing markets can change the world; it's not that they're trying to dupe anyone for their own ends. Instead the problem is one of misguided faith. "Today's leaders have been socialized to believe that we need to teach people to be more responsible and sustainable," he says. "The result is that market structures, which are responsible for problems like global warming, get reinforced."

The paper, frankly, is a little hard to follow and perhaps not recommended for casual readers. But the essential arguments are interesting. We seem to have lost faith in the power of politics and government to solve problems, and we're now at sea, hoping that consumerism can offer an alternative. So far—at least when it comes to environmental issues—it clearly hasn't.

"There's a tremendous belief in the problem-solving capacity of the market—that somehow all we need is a competitive infrastructure and then some inventor will come and provide the silver bullets for all our problems," Giesler says. "But, ultimately, there will always be contradictions between economic and social goals."

He adds: "I believe that markets are like the proverbial fire. They are wonderful slaves, but terrifying masters. It's nice to think we can have a political economy that balances unbridled capitalism."

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