cottage cheese 311 R.
(photo credit: Marc Israel Sellem)
Consumer protests demonstrate the persistent power of solidarity. In the wake of
egregious price increases in the last few years, Israeli consumers took to the
streets in protest over the summer.
But the protests were not merely a
cri-de-coeur, an outpouring of frustration; fairly rapidly, the protesters came
to consider certain individuals the protest leaders and. in an informal way, to
deputize them to represent their interests.
This week, the papers
reported that protesters began negotiations with one of the leading Israeli
Negotiations presuppose defined sides with defined
We can gain some insight into this phenomenon from the ideas
of economist John Kenneth Galbraith. In his 1952 book American Capitalism: The
Concept of Countervailing Power
, Galbraith postulated that markets work in a
sense both worse and better than the textbooks present them.
worse than the textbooks say, because the economics textbooks tend to focus on
an imaginary world of perfect competition where there are many independent
sellers all competing to provide the consumer with the best price and quality,
and many independent employers competing to provide workers with the best
salary. In fact, Galbraith claimed, industry is dominated by a few large firms
who have market power and exploit it to raise prices and lower wages.
the markets also work better than the textbooks say, because the textbooks state
that when firms do work together, they have virtually unlimited power to exploit
the consumer and the worker. Galbraith pointed out that such exploitation
inevitably induces the other side of the market to effect its own concentration
of power so as to effectively counter the power of firms.
His most famous
example is labor unions, which are found almost exclusively in industries
dominated by a few firms, but Galbraith discusses consumer power as well. One
example he brings is the consumer cooperatives that were then widespread in
parts of Europe. Another is joint political action to bring about trust-busting
Galbraith acknowledged that it is not easy for the many to
organize effectively against the few.
“It must not be assumed that it is
easy for great numbers of individuals to coalesce and organize countervailing
power,” he writes.
And yet they do, sometimes at great individual
sacrifice. Each individual protester standing on the sidewalk next to the house
of the CEO of a major food company cannot expect to ever recoup individual
benefit commensurate to his or her efforts in the form of lower food prices in
the future. The contribution of each individual is so small, and the effort far
The continuing fact of the exercise of countervailing
power shows that the true “economic man” is by no means the lone individual
trying to improve only his own situation.
Self-interest is certainly a
ubiquitous feature of human nature, but solidarity, collective identification
and collective action are equally ubiquitous in society and even in market
capitalism. Workers feel solidarity with other workers and are willing to
sacrifice on behalf of the collective; consumers feel solidarity with other
consumers and are willing to show up to protests and to acknowledge
The concept of countervailing power, so powerfully
exemplified by the summer protests simmering well into the fall, are not just a
“tweak” of the classic economic model. It is a fundamentally different way of
looking at the economy and its institutions.
Free and competitive markets
are an essential aspect of the modern economy, but they are not the whole story.
Collective sentiment and action – exercised through voting, protests and
organizations – are equally an essential aspect of an actual “economic man” and
of the actual economy we live in.[email protected]
Asher Meir is
the research director at the Business Ethics Center of Jerusalem, an independent
institute in the Jerusalem College of Technology (Machon Lev).