161:" (the customer is king). I first used the term in its present sense in an unpublished article which I circulated in 1931. It first appeared in print, I believe, in an article which I published in March 1934. In 1935 Dr. W. Röpke used the phrase "democracy of the consumers"; and in the same year Professor F. A. Hayek used the phrase "sovereignty of the consumer" in a section heading in Collectivist Economic Planning. Since then the term seems to have been fairly widely employed.
322:
that I did. I would not have been so upset if she had said that I could not have it, whatever it was, or that it was very wicked of me to want it. What rankled was the denial of my personality—a kind of rape of my integrity. I confess I still find a similar rising of my hackles when I hear people's preferences dismissed as not genuine, because influenced or even created by advertising, and somebody else telling them what they “really want.”
195:
side of supply." But all I have done is to make the concept correspond with the distinction between ends and means. As I have used the term, it covers the expression of all human preferences in respect of ends, in so far as those ends are confronted with scarce means. When ends are being sought, we are concerned with demand; when means are being chosen, we are concerned with an aspect of supply—entrepreneurship.
599:, featured accusations that the non-Communist Party staff in that office accepted the primacy of consumption. To the Communists this seemed, at the time, an unpardonable transgression, and the 'trial' - held in the form of a two-day public debate - resulted in a wholesale reorganization of the Central Statistical Office and the removal of the offending staff members.
331:
A possible way to test the consumer sovereignty assumption is to compare consumers' valuations of items they purchase on their own, to their valuations of items they receive as gifts from friends and family. In one such experiment, done during a holiday season, it was found that consumers value their
321:
The basic idea of consumer sovereignty is really very simple: arrange for everybody to have what he prefers whenever this does not involve any extra sacrifice for anybody else.… One of the deepest scars of my early youth was etched when my teacher told me, “You do not want that,” after I had told her
234:
because consumers have the power to decide how a store is going to function and to increase or decrease sales - simply by buying things, consumers determine what goods are produced and how well they sell, and whether supply brings consumers to the market and whether new consumers will visit. It also
43:
is the controlling power of consumers, versus the holders of scarce resources, in what final products should be produced from these resources. It is sometimes used as a hypothesis that the production of goods and services is determined by the consumers' demand (rather than, say, by capital owners or
335:
Another experiment compared the effects of two parallel government programs in Mexico, both intended to help poor villagers: the first provided cash transfers, and the second provided food transfers. The experiment found no evidence for the "paternalistic" view that in-kind transfers are better and
218:
Recognizing that in some situations a producer might choose a less remunerative activity which that producer finds more personally satisfying, Hutt defined such a decision as one of consumption, not production. In doing so, he attempted to force the distinction between consumption and production to
203:
This does not involve any "startling neglect," as
Professor Fraser describes it, "of the producers' side of the picture." Every owner of resources (including his own physical powers) may be regarded as bidding, with the rest of the consumers, for the services of his own resources. We may regard him
194:
It seems to me that one basic misunderstanding is mainly responsible for all
Professor Fraser's criticisms. He says that the "doctrine of consumers' sovereignty implies, perhaps even entails, that preferences on the side of demand are fundamentally and in principle more important than those on the
50:
is the idea that the consumer is the best judge of their own welfare (rather than, say, politicians). It is used to claim that, for example, the government should help the poor by giving them monetary transfers, rather than by giving them products that are deemed "essential" by the politicians.
189:
such as time, and all other possible things. When a worker wants to have more leisure time, his demand for leisure is confronted with the demand of the society for his work. Only after the worker outbids the society for his leisure, can he consume it as he wishes. According to Hutt, the poor
336:
that cash transfers induce consumption of unhealthy products. Since cash transfers are cheaper to carry out, a practical conclusion of this experiment is that it is better to help the poor by giving them cash transfers that they can use according to their subjective preferences.
213:
The concept of consumer sovereignty has been criticized for not respecting a presumed symmetry between freedom to demand and freedom to supply. Although Hutt may be blamed for the misunderstanding of the critics, they have missed the point of the concept:
361:
Various studies show that consumers' preferences are irrational and inconsistent, and so they cannot represent what is actually good for them. This is true, in particular, for inter-temporal decisions (such as deciding how much to save for old age) and
357:
claims that many consumers (e.g. children and drug-addicts) are not competent to know what is good for them. Moreover, even competent individuals have preferences that are partly influenced by society, and do not represent only their own wants.
168:
When the term was used for the first time by Hutt, it was written as "consumers' sovereignty". In the book's review by Jacob Viner, he used it as "consumer's sovereignty". Later, the term "consumer sovereignty" became generally used.
226:
Even if consumers are approached traditionally, they are largely sovereign under the assumption that in the role of producers, people maximize their income. Economists address this hypothesis also as consumer sovereignty.
111:, once the biggest computer manufacturer, faltered as mobile devices began to displace PCs, cheap Asian machines cut into profitability, and big customers began to demand end-to-end service in addition to the hardware.
67:
The consumer is sovereign when, in his role of citizen, he has not delegated to political institutions for authoritarian use the power which he can exercise socially through his power to demand (or refrain from
72:
The double use of the word "power" in this definition makes it clear that the power of the consumers was the most important topic in the whole concept. Hutt later reformulated the definition in a similar
77:...the controlling power exercised by free individuals, in choosing between ends, over the custodians of the community's resources, when the resources by which those ends can be served are scarce.
274:
is a process by which consumers deliberately try to influence the production process according to their moral values, for example by preferring ethical producers or boycotting non-ethical ones.
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Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.
223:
Some economists viewed the effort to make the distinction between consumption and production parallel to the distinction between ends and means as an unfortunate exercise in wordplay.
114:
When other companies (such as Nikon and Canon) began making cameras that took digital photos unlike the film cameras from Kodak, consumers switched to these companies and eventually,
165:
Although Hutt did not mean to establish any theory based on this concept, some economists argue that consumer sovereignty does not hold in some cases, for example, in healthcare.
351:
distorts consumers' preferences, so consumers' revealed preferences actually represent what is good for the advertisers and not what is good for consumers themselves.
105:. Blockbuster continued renting out DVDs and VHS tapes at traditional stores and was slow to modernize, causing Blockbuster to lose money and eventually go bankrupt.
204:
as normally offering part of those services for exchange, actual or anticipated bidding as a whole. He is, so to speak, outbid for such services by other consumers.
857:
1035:
37:
concept that the consumer has some controlling power over goods that are produced, and that the consumer is the best judge of their own welfare.
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brings competition between other markets because other markets might need to change the price on their goods in order to bring consumers back.
243:
577:
850:
280:
is the theory that production depends on resources available from the environment, rather than just on consumers' demand.
843:
393:
Sirgy, M. Joseph; Lee, Dong-Jin; Yu, Grace B. (1 July 2011). "Consumer
Sovereignty in Healthcare: Fact or Fiction?".
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572:. Volume 200 of Praeger special studies in international economics and development. Praeger Publishers. p. 9.
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255:
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To understand consumer sovereignty you must also understand consumers and their demand. Everyone is a consumer and
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The idea that the consumer is the best judge of his or her own welfare. This assumption underlies the theory of
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own purchases about 18% more than the gifts they receive. This supports the consumer sovereignty assumption.
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Sometimes a business will fail because it can’t provide the products necessary to make consumers happy:
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on producers' actions through the flow of consumer payments to producers for their goods and services.
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Personal and Social
Consumption in Eastern Europe: Poland, Czechoslovakia, Hungary, and East Germany
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understanding of consumers and their demand led to some of the early criticisms of this concept:
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Waldfogel, Joel (1 November 2005). "Does
Consumer Irrationality Trump Consumer Sovereignty?".
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I am not sure whether I coined the term myself. Marketing literature contains phrases like "
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and through it the bulk of economic analysis including the most widely accepted optimum in
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ultimately failed because consumers started to adapt to more convenient alternatives like
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720:
Cunha, Jesse M. (1 April 2014). "Testing
Paternalism: Cash versus In-Kind Transfers".
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147:(1936). However, Hutt himself was always cautious of claiming credit for the term:
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Views on the primacy of consumption can become matters of ideological debate in
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Lerner, Abba P. (1972). "The
Economics and Politics of Consumer Sovereignty".
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A practical implication of such criticisms is that governments should provide
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821:"The citizens know their own utility functions better than the politicians"
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The idea of primacy of consumption over production was first pronounced by
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As Hutt also described, the concept therefore does not neglect suppliers:
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531:
Hutt, William H. (March 1940). "The
Concept of Consumers' Sovereignty".
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Persky, Joseph (Winter 1993). "Retrospectives: Consumer
Sovereignty".
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is an enterprise owned and managed democratically by its consumers.
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decisions (such as assessing the risks of financial investments).
155:", and I am told that a proverbial expression in High Dutch is "
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run exactly parallel to the distinction between ends and means.
463:
Economists and the Public: A Study of
Competition and Opinion
145:
Economists and the Public: A Study of Competition and Opinion
595:' in Poland in February 1948, which became the harbinger of
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Thurow, Lester C. (1974). "Cash Versus In-Kind Transfers".
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The term "consumer sovereignty" was first coined by
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811:Campbell R. McConnell and Stanley L. Brue (1999),
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722:American Economic Journal: Applied Economics
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59:Consumer sovereignty was first defined by
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616:Macmillan Dictionary of Modern Economics
313:A more detailed definition was given by
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289:Consumer sovereignty is defined in the
669:The Review of Economics and Statistics
465:. London: Jonathan Cape. p. 257.
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181:not only products such as food, or
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41:Consumer sovereignty in production
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489:Journal of Economic Perspectives
373:rather than lump-sum transfers.
593:the Central Statistical Office
285:Consumer sovereignty in welfare
48:Consumer sovereignty in welfare
1:
775:The American Economic Review
631:The American Economic Review
566:Mieczkowski, Bogdan (1975).
153:the customer is always right
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823:. Economics Stack Exchange
691:10.1162/003465305775098107
395:Journal of Business Ethics
278:Resource dependence theory
185:like oil or gas, but also
173:Consumers versus suppliers
819:Kenny LJ (8 March 2019).
614:Pearce, David W. (1992).
461:Hutt, William H. (1936).
407:10.1007/s10551-010-0733-5
815:(14th ed.). McGraw-Hill.
27:Economic consumer theory
1016:Consumers' co-operative
896:Consumer culture theory
293:of modern economics as:
256:Consumers' co-operative
978:Consumer socialization
973:Consumer ethnocentrism
886:Autonomous consumption
437:"Consumer sovereignty"
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31:Consumer sovereignty
18:The customer is king
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963:Consumer confidence
956:Consumer attributes
891:Induced consumption
744:10.1257/app.6.2.195
501:10.1257/jep.7.1.183
272:Ethical consumerism
240:socialist economies
141:William Harold Hutt
61:William Harold Hutt
968:Consumer confusion
947:Marketing research
932:Consumer economics
867:Consumer behaviour
327:Empirical evidence
299:consumer behaviour
187:production factors
158:De klant is koning
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993:Cultural consumer
911:Consumer spending
303:welfare economics
264:is the impact of
242:- as happened in
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371:merit goods
349:advertising
183:commodities
118:went under.
91:Blockbuster
68:demanding).
63:as follows:
1051:Categories
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129:Adam Smith
1009:Processes
813:Economics
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752:1945-7782
730:CiteSeerX
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585:20 August
423:154693000
415:0167-4544
340:Criticism
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131:in 1776:
874:Concepts
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82:Examples
35:economic
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756:S2CID
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419:S2CID
829:2019
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