Monday, February 27, 2012

Got to Keep the Customer Satsified

Over the years, I've argued with a lot of self-described fiscal conservatives, and because I've argued with them, they've assumed that by criticizing their worldview, I have taken up with their Opposites. They see me as some kind of hybrid socialist/hippie/anti-establishment Liberal type. But try as I might, I can't get them to see past their narrow free market vs. communism conflict and recognize that there are new problems with our corporate consumerist society that aren't being dealt with by their old approach.

Here is a classic conservative quote from the Iron Lady herself:
“As Prime Minister between 1979 and 1990 I had the opportunity to put these convictions into effect in economic policy - We intended policy in the 1980s to be directed towards fundamentally different goals from those of most of the post-war ear. We believed that since jobs (in a free society) did not depend on government but upon satisfying customers, there was no point in setting targets for 'full' employment. Instead, government should create the right framework of sound money, low taxes, light regulation and flexible markets (including labour markets) to allow prosperity and employment to grow.” ― Margaret Thatcher, The Path To Power
For me, the key flaw in fiscal conservative reasoning is captured in this article of faith:

‎"We believed that since jobs (in a free society) did not depend on government but upon satisfying customers..."

Unfortunately, in the current economy, jobs don't depend on satisfying customers any more, but upon "enhancing shareholder value" - products of higher quality or a job well done are no longer the goal, but are just a stepping stone to profitability and exploitation. The old vision of a shopkeeper hanging out his shingle and doing business in his community has disappeared under the avalanche of franchising. No one who still knows how to actually make things can get those things to market without going through some kind of distributor; and the bureaucracy of marketing departments, middle management, and the associated costs of union-mandated benefits that go along with all of them seems to keep growing, whether or not the original product or service they are supposed to be providing to satisfy the customer actually does so.

Many corporations these days have taken to blaming the government for high taxes and crippling regulation for their financial woes. They excuse the drop in quality by claiming the consumer demand for convenience and not putting the blame on the shortcuts they take; or they ignore their own internal pressure to increase sales volumes and claim that consumers won't buy their more expensive product in a tough market.  In our family, there have been a number of products we were willing to pay more for - shampoos that didn't make my wife's scalp break out, or spaghetti sauces that didn't have high fructose corn syrup in them - and we've watched them disappear as the start-up company making them was bought out by larger, more "efficient" competition. If the world worked as Ms. Thatcher and my fiscal conservative friends like to believe it does, those products would not disappear, because they satisfy customers.

To be fair, there are a lot of "regulations" that create bizarre incentives; many of these have to do with the subsidies paid out under the Farm Bill that Congress reviews every 5 years. It appears that one reason high fructose corn syrup - which we try to avoid because it appears to cause behavior problems in our son - is in so many products (to the consternation of the sugar industry) is that the artificial market for HFCS is driven by incentives to buy this stuff that only exists in such large quantities because corn production is subsidized in the first place.

We also find the pattern of lower quality in the name of efficiency and convenience in service industries, like plumbing and home repair. Those fields seem to be increasingly dominated by the home warranty market, which has the same affect on the costs and quality of professional work that insurance has on health care.  We consumers see prices go up, quality fall, and we are sold a policy that claims it will insulate us from this volatility; then the number of alternative choices contract - while the companies responsible try to blame the government for taxing them and causing "uncertainty" with their regulations.

It seems to me the real problem is that while plenty of people are willing and able to work for a living, there is a layer of parasitic scum between them and their customers sucking away jobs and money without returning anything but the illusion of efficiency and convenience. True, that *used* to be the position the government held; but the government's role has shrunk in relation to the growing population, taxes are lower than ever, and while unemployment is up, there are still plenty of "executives" running around trying to buy up companies they can make a profit from.

There is an economic revolution underway; so far, the old guard is still clinging to the old conflicts. The so-called liberals and so-called conservatives are still trying to win their old battles while the rest of us face something entirely new. The question is, which "team" is going to recognize the new shape of the battlefield first, and actually start listening to the customers instead of their corporate masters?

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