"Consumer Choice" Versus Liberty

The Rocky Mountain News surprised me with its call for more stringent federal controls on car designs. It’s July 24 editorial starts out well enough, noting that “Washington’s command-and-control approach to the promotion of ethanol and other biofuels has unleashed a host of unintended consequences.”

But then the News concludes:

[W]e also hope lawmakers take a serious look at the Open Fuel Standard Act, a bill launched last week by Sens. Sam Brownback, R-Kan., Joe Lieberman, I-Conn., and Colorado’s own Ken Salazar.

The legislation would require automakers to produce a greater share of flex-fueled vehicles over time. By 2012, half the new cars sold in America, of domestic and foreign origin, would have to run on both gasoline or a “renewable” fuel such as E85 (which is 85 percent ethanol, 15 percent gasoline)or biodiesel. By 2015, 80 percent of new cars would have to be equipped to handle either type of fuel.

The bill would not compel car owners to buy gasoline or E85; it would let them select the fuel they prefer, based in part upon price signals. And flex-fuel technology can reportedly be added when cars are built for about $100, or less than 0.4 percent of the average new car’s price. …

Washington would be genuinely expanding consumer choices, not compelling individuals to purchase something they may not want.

The first problem with the News’s analysis is that, if the new standards genuinely would help consumers relative to the costs, people would rush to buy the flex-fueled cars without taking a beating by the federal stick.

More significantly, the News praises “consumer choices” outside of the context in which it’s a good thing: the system of liberty.

Relevant is not only the choices of consumers but the choices of producers. People have the right to run their businesses the way they see fit, so long as they don’t violate the individual rights of others. Consumers properly have the right to choose where to conduct business. What “consumer choice” is all about in the context of liberty is that buyers choose which goods and services to purchase, thereby rewarding the businesses that best meet their needs and allowing businesses that don’t meet people’s needs to fail. The federal controls violate the rights of property and contract.

To take a simple example, let us say that the Blue Shoe Company produces only blue shoes, and it has found a group of customers happy to buy its products for whatever reason. A federal control that forced all shoe companies to produce red and green shoes would be immoral, as it would violate the rights of the shoe producer as well as of the consumers who wish to do business with the company. An appeal to “consumer choices” would not change the moral status of the controls. The reason that there is not (so far as I’m aware) a company that produces only blue shoes is that most customers want a selection of colors, so shoe companies offer such choices. However, shoe companies often are highly specialized, some making only high-end formal shoes, some making only sneakers. The proper point of the law is to protect people’s rights to control their property and contract voluntarily, not to superficially expand “consumer choices” by force.

Thankfully, the News published a reply by Justin Blackman on August 1:

The editorial stated that “consumer choice” would fix these problems and advocated yet another government mandate (the Open Fuel Standard Act) to “put motorists in the driver’s seat.” This piece of legislation would force automakers to manufacture flex-fuel vehicles.

Normally, “consumer choice” tells automakers what to sell.

Motorists will never be “in the driver’s seat” as long as the command-economy mentality persists, and there will always be unintended consequences when the government restricts the freedom of individual consumers to choose what goods and services work best for them.

The solution to energy supply problems is to leave consumers alone and let us decide for ourselves where our money should go. After all, if flex-fuel vehicles are good products, wouldn’t we buy them of our own free will?

So good sense prevails at the News in the end, as it so often does.