The Role of Consumer Sovereignty in Sustaining the Market Economy

Contemporary economic policy discourses are heavily oriented towards competition and efficiency using modern conceptualisation of the market as an institution for resource allocation and governance. Market based policy approaches are considered necessary and sufficient instruments to achieve environmental goals while leaving individual freedom largely unaffected. This neoliberal position crucially depends upon the concept of consumer sovereignty. It encapsulates the idea that individual consumption is the only source of value and consumers are able to enforce their interests on producers via their power in the market place. Despite the concept of consumer sovereignty having huge importance in contemporary economic theory and policy, its meaning remains opaque. We explore how consumer sovereignty has been employed for political instrumental, market ideal and economic instrumental reasons by classic liberals, neo-Austrian and Neoclassical economists respectively. We go on to show that the concept of consumer sovereignty depends upon a series of problematic assumptions and fails to bear much relationship to reality. The theoretical basis of consumer sovereignty on individual preferences proves problematic, not least due to its ethical presumptions. Environmentalists search for what makes a just and sustainable society and neoliberalism is answering with the rhetoric of consumer sovereignty. This paper shows why that answer needs to be rejected and why environmentalism actually means critically rethinking the role of markets in society.