Back to Homepage Income Measures Income: Saving and Investment Methods of Buying That Save Money The Choice of Goods Methods of Buying That Reduce Mistakes In Selection Methods of Securing Information Concerning Goods Plans and Motives of Consumers Consuming the Product Who Is the Consumer? The Consumer in the Market Priorities and Preferences in Consuming Decisions The Consumer as User of Wealth The Consumer as a Buyer Consumers as Self-Conscious Agents Criteria of a Good Market Information Versus Persuasion of the Buyer The Rate of Interest Interest Rates and Economic Activity Saving, Investment, and Income Saving Motives Saving Plans and their Realization Total Spending Is the Key to Prosperity The More We Spend, The More We Have Spending by Private Enterprise

The Consumer as User of Wealth Consumption is defined as the satisfaction of human wants through the destruction of the utility embodied in goods and services. On the basis of this definition, economists have generally referred to the consumer as any person who destroys utility in the direct satisfaction of human wants. In this sense, all are ultimate consumers regardless of productive occupation or economic interests. "In each community," wrote Say, "each member is a consumer; for no one can subsist without the satisfaction of some necessary wants, however confined and limited." The babe in arms, the school age child, the housewife, the wage earner, the entrepreneur, and the aged and infirm all qualify as consumers by the simple process of eating and drinking, wearing clothes, occupying a dwelling, and using other economic goods and services. In terms of this definition, the consumer is not a clearly differentiated type. His characteristics are common to all men and are more biological and social than economic in nature. Their economic significance lies in the complementary nature of the producing and consuming roles which frequently conflict in a price economy. "Is there a consumer who does not produce something, some service?" asks the editor of Nation's Business. "To demand lower meat or milk prices for consumer Brown is to take it out of railroader Brown." 2 Here lies the basis of the business man's objection to the consumer as an isolated type. For, the enterpriser, Smith, is personally in the peculiar position he ascribes to the mythical railroader, Brown. If prices are cut, the Smiths, collectively, gain in purchasing power about what they lose in profits. The analogy does not hold, however, for the wage-earning Browns unless profits are sustained and the price cuts recouped through wage reductions. But, as has been shown, such a policy defeats the sole reason for price reductions because it curtails mass purchasing power and thus delimits the volume of sales on which profits depend. At times, government officials have used this comprehensive definition of the consumer as a basis for assuming the consumer's and the public's interests to be identical. While Executive Director of the Consumers' Division of the National Emergency Council, Dexter Keezer, rather lamely justified such an interpretation thus: "It is necessary to consider the consumer's interest as the interest of the community at large in consuming a larger volume of goods and services, rather than the interest of any particular group in that regard. If any defense of this definition of the consumer and his or her or its interests is required . . ., I can only say that the consumer, like Mrs. Malaprop's conception of Caesar's wife, is all things to all men, and accordingly subject to grave vicissitudes of definition." But Paul Douglas, who was also associated with the Consumers' Division of the National Emergency Council, apparently saw an intrinsic difference between the two groups. "It is important," he says, "to distinguish between the interests of the consumer or the purchaser, and the interests of the public which is composed of all of the various groups. The true representatives of the public will tend in a goodly percentage of cases to be mediators between conflicting interests. If the interests of the buyers or consumers are therefore to be represented, it should be directly rather than indirectly through a somewhat rarefied 'public' representative." Three groups, therefore, have at different times considered the consumer as any person who destroys utility in the direct satisfaction of human wants. The professional economist thinks in such terms because he is primarily interested in the creation and use of goods and services without reference to personalities. The enterpriser is of the same opinion because of the conflicting nature of his dual role as both a profit taker and a consumer. And finally, certain public officials find it expedient to embrace this concept in the interests of diplomacy. As an adequate depiction of the consumer type, this concept of the consumer as any user of wealth is an incomplete definition because functions have been considered without reference to attitudes, motives, or personal characteristics. For purposes of measuring the physical type or volume of past consumption, the concept is satisfactory because a knowledge of the precise nature of the consumer is not essential to the compilation of such data. But, if the consumer as such is to be understood, and his actions predicted or controlled, a more precise differentiation must be made in terms of personal qualities as well as in terms of function. In other words, it is important that we know, not only what the consumer does, but what distinguishes him as a type from other economic factors.   Home