CONSUMER POWER AND MOBILIZATION AS ACOUNTER BALANCE TO THE POWER OF CORPORATE MONOPOLIES AND GOVERNMENT

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Feb 1, 2010 No Comments ›› jskdezign

CONSUMER POWER AND MOBILIZATION

AS ACOUNTER BALANCE TO THE POWER OF CORPORATE MONOPOLIES AND GOVERNMENT

Overview of the presentation by Imraahn Ismail-Mukaddam

At the seminar (September 2009) hosted by the Students for Law and Social Justice

Introduction

As we are all aware there is a huge and disproportionate concentration of economic power in the hands of a few Corporate Monopolies. Every industry in South Africa has it’s four to five industry leaders who dominate up to 80 percent of the market share of whatever industry is referred to with small and emerging players dabbling in the remaining 20 percent with no hope of ever breaking the dominance of these monopolies. The recent focus of the Competition Commission on the role that these Corporate Monopolies have on inflation and the extent to which abuse of dominance is undermining fair competition especially in the food and retail sectors illustrates the enormity of the problem. Besides the Retail and Food industries we also find abuse of dominance in the Banking sector, the Construction Industry, the Telecommunication sector, the Fuel Industry as well as in Mining and even in the Transport and Commuter Travel industry. It is therefore obvious that every aspect of our day to day transactions as consumers are influenced by a disproportionate balance of power in the hands of the providers of goods and services with our choices limited and our ability to bargain and compare value virtually non existent. As Consumers our only avenue of recourse is the Competition Act and the Competition Commission and Tribunal. We will soon also have recourse to the Consumer Protection Bill, which is a very progressive piece of legislation, which will have a dramatic impact on the way business is conducted in South Africa. What we need and don’t have is a strong consumer advocacy and lobby group that has as its primary objective the empowerment of Consumers and to ensure that the provisions of the Competition Act as well as the soon to be effective Consumer Protection Bill are utilized effectively to advance the interest of Consumers but more importantly to serve as an effective counter-balance to the disproportionate power held by the Corporate Monopolies.

Relying on Government and legislation is not enough to prevent unscrupulous Corporate Monopolies from exploiting and abusing the vulnerable in most cases the poorest of the poor. In many cases government has a vested interest in perpetuating the spiralling inflation as Value Added Tax and high interest rates are huge sources of income to the state. Monopolies are huge contributors to the political campaigns.

The need for Effective and Powerful Consumer Organizations

We need powerful and effective consumer organizations in order to conscientize all consumers that they do have recourse and that consumers are able to swing the balance of power in their favour despite the concentrated nature of the South African economy and the Monopolistic tendencies that are prevalent throughout our business environment. We can only use the instruments of Law effectively if we Organize! To use an old union slogan ORGANIZE OR STARVE this is so relevant and applicable in our present Capitalist context.

An organised Consumer Movement should give a voice to the legitimate concerns of the exploited masses and be instrumental in raising the level of consciousness of consumers regarding their rights. An organised consumer movement should also be vocal in advocating changes in not only legislation and policy but also for participation in the decision making process that affects Consumers directly. If we can organize a mass based Consumer movement in order to challenge the hegemony of the Monopolies by using for instance the provisions of the Competition Act to claim for compensation on behalf of all affected Consumers through Class Action Law Suits, this will demonstrate to Big Business that the days of bullying and exploiting Consumers are over.

We need Business and Government to recognise consumers as legitimate stakeholders in the economy and not just the feeding trout from which maximum profit can be extracted. Consumers need to be in a position to resist this feeding frenzy that gobbles up their hard earned income so that a few Corporate Monopolies can and their shareholders can benefit. Consumers Activism is an important and hugely under estimated weapon, which if correctly applied can bring about significant changes in the way business is conducted. A mass based Consumer movement would encourage and facilitate a culture of Consumer Activism through the knowledge that individuals are not fighting for their rights on their own but have the backing of a substantial and powerful organisation.

Consumer power the only counterbalance to the power of Corporate monopolies

If Consumers could be empowered through legislation to organise strong consumer organisations that could be funded through the fines imposed on transgressors of the Competition Act as well as the Department of Trade and Industry we could see a different business environment where consumers would play a significant, but also a constructive role in ensuring compliance with legislation especially the Competition Act as well as the Consumer Protection Bill.

Consumer Consciousness and Mobilization could also lead effective resistance to Capitalist exploitation. Consumers should combine the use of the legislative framework with the emphasis on court action and exposing malpractices with the more traditional methods of struggle such as consumer boycotts and protest actions to pressure these Corporate Monopolies to make concessions in their pricing structures and their massive profits. If Consumer Groups could be organised similarly to what Unions are and where membership is recruited and legitimate mandates are exercised on behalf of members we could find a situation where manufacturers of basic foods such as bread would have to negotiate the price of this staple with a Consumer Union and this would empower consumers to become price setters instead of price payers.

Through effective mobilisation of Consumers we may even persuade these Corporate Monopolies to appoint to their Boards of Directors a Director of Consumer Interest who would be totally independent and who would be accountable to Consumers whose interest he would promote at Director’s level so that no decisions that effects consumers adversely can be implemented. Although this concept may seem unrealistic it will have real benefits for these companies as all the existing inefficiencies for which consumers are presently paying for would be addressed. Executives would also be unable to award themselves the excessively huge salaries, bonuses and share options, which is presently the case.

Consumers are completely and deliberately exposed to the Free Market System, which is supposed to protect us from exploitation. Our experience has been quite the opposite as the lack of intervention by governments internationally has led to the Global Financial meltdown and locally to the disproportionately high levels of inflation. Lack of government intervention has resulted in the Corporate Culture of Price Fixing and Market Manipulation.

Consumer Power as a counter balance to the power of Government

Consumers should be recognised as legitimate stake holders. The idea that Government has the sole mandate to act on behalf of consumers is outdated. Consumers should view the State as a service provider, and which through our democratic vote has been chosen as our preferred service provider. As a mass based Consumer Movement we should engage government as consumers of services rendered and not as subjects that surrender to the authority of the state. This approach entitles us to demand value for money. Our taxes, duties and municipal rates are our contribution to the state in order that it may deliver a service to us. Even the most indigent amongst us are paying consumers, as 14% of every rand spent is Value Added Tax. The same Consumer Activism that we are advocating to be applied to the Corporate Monopolies should be applied to Government.

Why do we accept inferior service when we are paying customers? Why do we allow blatant discrimination in the allocation of services when we are paying customers? Why do we allow Government to make policy decisions that effect us directly without consulting us when we are paying customers? Why is there no consumer representation at NEDLAC when most of the decisions made there effect consumers directly? Why do we always hear of the Tri-partite relationship of Government, Business and Labour, but Consumers are never represented or invited to make representations.

We need to make the voices of Consumers heard in the corridors of power and make those in power understand that as consumers we have purchased their subservience to us with our vote and our taxes and we now expect delivery, performance and consultation.

CONCULSION

I would have liked to elaborate on how mass based Consumer Movements can be effectively used to address other important global issues such as climate change, genetically modified foods, healthy living, and environmental issues, but that would digress from the crux of my brief which is how do we put forward a viable approach to the enormous power held by the Corporate Monopolies.

Although the Socialist Core Values of our liberation struggle has been abandoned and our government have embraced the neo-liberal version of the Capitalist system that perpetuates the class and economic divisions in our society we can still confront this modern Barbaric Capitalism through fighting it where it hurts most, its pockets.

This ideology of Consumer Power needs to be debated and articulated in the minds of consumers if this power is to be harnessed into an effective mechanism to effect Social change and bring about Social Justice.