Now there is a term I have not read before – Consumer Sovereignty. Mark Perry used in at his blog site Carpe Diem where his article about the Chart of the Day titled Chart of the Day: Consumer Sovereignty Rules in the Long Run and Competition Breeds Competence.
What an eye opener.
When he discusses economic lessons he mentions the shortcomings of both management and labor sovereignty. Both management and labor sovereignty, in a competitive market, are trumped ultimately by Consumer Sovereignty.
To make his point he uses his “chart of the day” to lead off the article where you can see in 1980 Ford had over 300 times as many customer complaints per 100 vehicles as Toyota with 195, while GM was much worse with almost 400 times as many customer complaints as Toyota. No wonder Toyota and similar brands took over much of the U.S. market.
However, as of four years ago (2007) there is a much different story to tell from the same chart. Toyota still has the lowest complaint per 100 cars with 110, but GM only has 1.23 times as many (135) – a vast improvement on both companies. Ford did even better with only 1.13 times as many (124). The companies are now in a virtual statistical tie with the American models coming on strong.
One other website comes to mind when mentioning consumer sovereignty although I do not recall it ever being used there, Gary North’s Specific Answers.
While I don’t recall Dr. North ever using the term, he has given advice many times reminiscent of the term. When a subscriber writes in and wants to know how to “get rich” or “get rich quick” Dr. North often advises them they have chosen the wrong website and then offers the following advice on obtaining wealth – find something you can offer to the consumer/customer at a lower price or of higher quality or even a product the consumer/customer doesn’t know they want or need yet.
Indeed, his advice always acknowledges the sovereignty of the consumer/customer who is always looking for a better price or higher quality at the same price.
Let’s hope the marketplace stays open and free enough to let us – the customer – reign supreme. For an example of a state run or controlled marketplace take a look at page three (3) of the free downloadable book The Vampire Economy as an example of the alternative.