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What Does the Just Wikileaked TISA Draft Mean for Consumers? (Part 2)

In part one of my discussion of TISA, I answered five simple questions about what TISA means for consumers. What we already know based on this discussion is that TISA will make an already unstable financial system even more unstable and that consumers will ultimately pay the price. However, the open questions that remain at the end of that post are why policy makers have grown so accustomed

  • to viewing deregulation as a viable instrument even though it creates more instability and inequality,
  • to deciding these matters behind closed doors rather than through democratic process,
  • and, conversely, to addressing the resulting economic instability not through interventions into the market on behalf of society but the other way around - through interventions into society on behalf of the market? 

From a sociological perspective, “models of economic development and organization always rely on particular understandings of the basis of the moral order that get universalized through hegemonic processes” (Fourcade and Healy 2007, 305). To answers these three important questions, it is therefore necessary to situate the Wikileaks/TISA/consumption nexus within a larger field of forces and social relations addressing the relationship between markets and morality. From this field of forces have crystallized different problem-solving rationalities - or models on how to address the contradiction between economic and social goals. They are the key to understanding TISA in consumer-sociological context.

Previous studies analyzing “moral views of market society” (Fourcade and Healy 2007, 285) commonly describe two opposing politico-economic rationalities: one emphasizing the market’s role in stimulating enterprise, creativity, and innovation and the other stressing the state’s role in combating the negative consequences of unbridled capitalism. Next, I briefly summarize these opposing formulations – I call them the virtuous-market myth and the caring-welfare state myth. After that, I describe how enduring tensions between them shape capitalism in its specific historical form.

Rooted in the liberal tradition, virtuous-market discourses celebrate the free market as the chief problem-solver – a naturally liberating force that brings out the best in humans and instills good character. Economists need no convincing that markets constitute the best possible arrangement for the satisfaction of individual needs and the efficient allocation of resources. In a situation where economic agents have little, if any, information about one another, honesty is simply good business policy. Long ago pioneered by Adam Smith and Leon Walras, respectively, both arguments have withstood the test of time within society. Virtuous market discourses associate markets with a long list of bourgeois virtues including civility, enterprise, respect, honesty, freedom, cooperation, responsibility, creativity, innovation, and entrepreneurial spirit.

Three virtuous-market discourses can be distinguished (Fourcade and Healy 2007): the civilizing market, the transparent market, and the sustainable market. Civilizing market discourses frame markets as powerful engines of social peace and progress. Given their natural tendency to promote social integrity, honesty, modesty, hard work, creativity, resilience, serviceability, and entrepreneurial spirit, competitive economic arrangements are generally understood as the best recipes against social evils such as poverty, illness, famine, crime, social disintegration, and cultural decomposition (Amable 2011). Transparent market discourses, in turn, frame markets as engines of financial security and wealth. By nurturing individual values of rationality, modesty, honesty, transparency, and accountability, competitive economic arrangements are naturally the best cure for preventing debt, corruption, economic instability, and wealth destruction (Shamir 2008). Lastly, sustainable market discourses understand markets as engines of sustainable development and environmental health. By naturally fostering creativity, innovation, and technological progress, competitive economic arrangements are the best defense against ecological problems such as resource depletion, deforestation, air pollution, or land erosion.

Rooted in the social-democratic tradition, caring-welfare state discourses render the market as a dangerous, dehumanizing, and harmful villain that systematically undermines any sense of social solidarity by playing on a debased instinct of competition. Here, the chief problem-solver is the welfare state that assuages, through its binding rules and regulations, the negative consequences of capitalism such as social rivalry and ecological damage. Historically, Polanyi (1944/2001) has provided the most forceful rendering of the idea that the market thrives on formal equality combined with brutal inequities in practice. Caring welfare state discourses idealize strong, kind, and compassionate political institutions tackling a long list of capitalist vices including greed, corruption, coercion, exclusion, alienation, exploitation, enslavement, and debt.

Three major welfare-state discourses challenge each aspect of the virtuous-market thesis (Fourcade and Healy 2007). Social welfare discourses render the welfare state’s role in alleviating the brutal effects of free markets on personality and social relations and taming corporations for evils such as inequality, poverty, unemployment, slave labor, commodity fetishism, alienation, addiction, illness, and imprisonment (Wacquant 1999). Financial welfare discourses stress the state’s role in counteracting the morally corrosive effects of markets on financial wellbeing and security and blame the market for evils such as intransparency, debt, exploitation, corruption, and ruthless greed (Strasser 2003). And, lastly, ecological welfare discourses emphasize the state’s role in preserving nature and the planet’s resources and celebrate the state’s role in combating environmental evils such as resource depletion, deforestation, air pollution, or land erosion (Bartley 2003).

Deregulation as Moral Duty

Although the problem-solving rationalities offered by market liberals and social protectionists have withstood the test of time, internal contradictions have prevented either logic from prevailing over the other. Liberals’ laissez-faire rationality lacks compassion, empathy, and participation whereas social interventionism is haunted by the specters of passive citizenship, inflexible bureaucracies, and state control. Historically, a point was reached when economists recognized that the justification for social-reformist state interventions was inherent to liberalism and the conflict between individual rights and collective protection. That was the moment when classic liberalism - or laissez-faire - was "dead."

Over time, the contradictions inherent to both rationalities have therefore given rise to a third problem-solving narrative: the neoliberal mythology of shared responsibility. The conflict between the left’s commitment to “participation” and the right’s commitment to “responsibility” is held to disappear when perfect competition is not understood as a natural state but as an ideal scenario, thereby re-articulating all socio-moral responsibility onto individual market actors rather than on the market as a system. Thus, making capitalism more ethical makes no sense; what is required is an increased ethical performance by individuals. In contrast to liberalism that assumed that markets were naturally self-regulating and thus rejected state interventions (Smith 1759/1982), neoliberal mythology imbues the constant re-establishment of the conditions necessary for the triumph of the most able in fair competition and the delegitimation of established privileges with heightened moral significance. Neoliberal mythology thus legitimizes the supplementing of majority rule by other institutions, which will distance themselves from partisan interests, account for the diversity of expressions of the common good, and thus prevent the masses from dictating their protective demands to the elites (Hayek 1960).

This way of thinking became popular when economists began to re-envision original liberal thought through the Darwinist notion of competition. In that moment, the moral imperative to form a new type of institution – a (transnational) “government of competence and ethics” (Amable 2011, 19) – that tackles problems beyond (national) democratic divides was born. For example, the intellectual fathers of neoliberalism including Friedrich Hayek, Milton Friedman, George Stigler, and Michael Polanyi quickly shifted from sharing ideas at the Lippmann Colloquium to the moral conviction that “the central values of civilization are in danger” (www.montpelerin.org/montpelerin/mpsGoals.html) and that only a moral alliance of economic elites including industrialists and politicians committed to defending competition could defeat totalitarianism. With the explicit aim of morally reforming industry, governments, and public institutions, members of this so-called “Mont Pelerin Society,” that was created in Switzerland in 1947, later founded other influential think tanks such as the Heritage Foundation, the Atlas Network, and the Institute of Economic Affairs.

It is important to notice here that TISA and what governments will ask from consumers once the agreement will lead to further economic instability is not merely economic. I went through all of this stuff about market virtues to emphasize that, at least to those who work on TISA's realisation and implementation at the moment, doing so is of existential moral significance. In this framing, TISA, the global financial system, and capitalism in general are never inherently good or bad. Whether they are working or not is largely a question of the moral conduct of individual market actors such as corporations and consumers.

Shared responsibility promotes the image of a society of economically rational actors “whose moral quality is based on the fact that they rationally assess the costs and benefits of a certain act as opposed to other alternative acts. As the choice of options for action is, or so the neo-liberal notion of rationality would have it, the expression of free will on the basis of a self-determined decision, theconsequences of the action are borne by the subject alone, who is also solely responsible for them” (Lemke 2001, 201). Consequently, morally prescriptive, top-down regulations are rejected in favor of freedom-of-choice models supported by a host of moral guidelines, codes of conduct, and non-binding rules. Institutions traditionally mandated to protect consumers as citizens with universal rights such as parliaments, unions, and political parties are not rendered obsolete. Rather they are placed on par with NGOs, charities, and corporations in facilitating and nurturing responsible consumption by consulting, trading, and competing over the deployment of various instruments of authority (laws, regulations, codes, guidelines, standards, labels, etc.) both intrinsically and in their relations with each other. To summarize, the neoliberal mythology of shared responsibility valorizes the solution of social problems through morally responsible market actors. 

Committed to preserving the common good from the dangers of populism, economic elites may be quick to bemoan a morally deprived capitalism that neglects the diversity of individual aspirations and may emphasize how a shared commitment to a more ethical consumerism can solve the problem in question.

For this reason, TISA's tendency to provoke further economic instability will not lead to more but actually less regulation. Committed to preserving the common good from the dangers of populism, economic elites may be quick to bemoan a morally deprived capitalism that neglects the diversity of individual aspirations and may emphasize how a shared commitment to a more ethical consumerism can solve the problem in question. This moral framing may not only motivate second-order market actors to revise their specific marketing strategies and projects. The altered architecture of consumer choice also invariably encourages and compels consumers to fashion themselves (their practices, understandings, and desires) according to its rules. Hence, the negative repercussions of TISA will ultimately set a moralization process in motion through which the responsibility is shifted from corporations and governments to the individual consumer and the threat of social regulation exerted from above is diffused.

At this point, the reader may ask why I chose to talk about TISA and responsible consumption instead of adopting a production-oriented Marxist lens to understanding the sustenance of contemporary neoliberal capitalism as an economically driven process of (re-) constituting the power of the capitalist ruling class (e.g., Harvey 2005). Wouldn't it be much easier to view TISA as an example of 

“a global ideological project with its roots in the United States and Great Britain, that has aimed to shift power and resources to corporations and wealthy elites through the privatization of public assets, the removal of ‘public interest’ regulations over large corporations, and tax cuts targeted towards the highest income earners. Such principles were advanced through the global system by international institutions such as the World Bank and the International Monetary Fund, through which neoliberal globalization emerged, defined by Scholte (2005, 1) as ‘an economically driven process that should proceed on first principles of private property and uninhibited market forces,’ and where ‘other economic rules and institutions are reduced to a minimum’” (Flew 2012, 5)?

Although this formulation is extremely useful in fleshing out the more traditional forms of disciplinary power (domination and exploitation) that are evident in capitalism, it is far less useful in shedding light on the effects of sovereign power produced at the level of everyday life and consumption. In the TISA story, we see various forms of power at work. And on the level of consumption, it matters that power works not only “externally” through the restriction of freedom, control, and coercion (the aspects that the Wikileaks side of the story helps raise), but “internally” (Foucault 1987), by promoting a particular idealized image of consumption as a free, autonomous, and creative project.

From this perspective, TISA is not just an instrument that is imposed “top-down” on behalf of dominant class and big business interests through the control of state and public policy and, by extension, one that could be easily refused and debunked. Rather, down the road, it will also raise a particular mentality or manner of governing around ideas of freedom, enterprise, and responsibility that become actualized in terms of particular consumer habits, perceptions, and desires (e.g., the idea that debt is not a burden but an opportunity to showcase one's entrepreneurial and organizing skills).

Markus Giesler

York University, 4700 Keele Street, Toronto, Canada

Markus Giesler draws on concepts from economics, technology studies, and sociology to inform his research in marketing. He determines how ideas and things (products, services, experiences, technological innovations, intellectual property, brands, etc.) are made valuable over time, with research focused on improving marketing strategy through an understanding of markets as evolving social systems. Giesler's research has been supported by the Social Sciences and Humanities Research Council of Canada (SSHRC) and the European Research Council (ERC) and published in top-tier academic journals such as the Journal of Consumer Research and the Journal of Marketing. Giesler has an extensive entertainment industry background. He founded his own record label at age 17 and has worked in various production and marketing responsibilities for over a decade. He lives in Toronto, Canada.