The Marketplace Wins: Choice Loses
by David Morris
Institute for Local Self-Reliance
June 2, 1998 – published in St. Paul Pioneer Press
It wasn’t supposed to end up like this. The free market system promised to bring us more choice, not less. Indeed, to most free enterprise advocates, choice is the most important feature of the free market system. In a capitalist society the customer is king. Right?
Well, not exactly. In 1998, with the free market having invaded just about every nook and cranny of our society, unhappy customers are discovering that they are faced with less choice, not more. And this is true in essential services, like medical care, as well as trivial pursuits, like soft drinks.
Remember that time, not that long ago, when you could choose your own doctor? Alas, for a growing number of Americans, that is no longer true. We’ve unleashed the marketplace on the medical sector. Today medicine is a commodity and a profit-center. Doctors are bought and sold by remote investors. Giant corporations make long distance life and death decisions about patients. And for more and more people, doctor choice is fast-disappearing.
Remember the great health debate of 1994? Opponents of national health insurance insisted that if we adopted such a concept we would no longer be able to choose our own doctors. Well, under our own form of socialized medicine–Medicare–the elderly still have the right to choose. And in Canada, national health insurance allows all patients that right. But in the United States, capitalist medicine just doesn’t seem able to provide that kind of service.
What about computers? Once upon a time, not that long ago, you could choose your operating system and you could choose your other software. Today for 9 out of ten of us, if you buy a computer you have no choice of operating system. You will choose Microsoft, or sit in front of a blank screen. And increasingly, Microsoft is bundling its word processing and spread sheet and communications software with its operating systems. According to the New York Times, 93 percent of office bundled software is owned by Microsoft.
And whatever happened to personal service? Not that long ago, if you had a question or a complaint, you could call up a firm and get a human on the phone. No longer. Now you get a maze of push button menus and pre-recordings. Only because rotary phones still exist do companies allow you to stay on the line and eventually speak to a real live human being. When these phones disappear I’m afraid the choice of human contact may also disappear.
And then there is the question of consumer goods. It’s been several years since I could order a Coke on Northwest Airlines or a Pepsi on Delta Airlines. Today more than 300 colleges have signed exclusive contracts with soft drink, telecommunications, or sneaker companies. Twenty four school districts have signed similar exclusive promotional contracts.
In 1992 Penn State signed a $14 million agreement with Pepsi Cola. In 1996, the University of Minnesota signed a 10 year, $28.5 million contract with Coca Cola. Colorado Springs signed a deal with Coca Cola for $765,000 for its 56 schools.
That means students no longer have the right to choose. At the University of Missouri, Mountain Dew was the students’ favorite drink. But under the terms of the university’s new contract, Mountain Dew is no longer available on campus.
Exclusive contracts not only restrict freedom of choice. They sometimes restrict freedom itself. The University of Wisconsin contract with Reebok barred teachers and students from criticizing the company’s shoes. It took a lawsuit to remove that clause. In Greenbriar High School in Evans, Georgia two students were suspended for wearing Pepsi shirts to a “Coke Day” rally. Many HMO’s bar doctors from talking to their patients about available treatments. Microsoft demands that computer companies that use its operating system, which is virtually every one, must not include competitors’ software with the sale of their hardware.
Does the consumer still have options. Sort of. If you want a Coke you can fly United. If you want to talk to a human being you can stay on the phone forever and eventually you’ll be able to do so. If you want to choose your own doctor you can pay through the nose for a fee for service insurance policy, or move to Canada. If you want a Mountain Dew go off campus.
Yes Virginia. Freedom of choice still exists in the US of A. But that freedom seems to diminish each day. This is not what the free marketeers promised us. They said the consumer would be king. From where I stand, the consumer is rapidly becoming more like a serf.
