Consumer Protection after Consumer Sovereignty

Abstract

Analysis of consumer protection law and policy still largely uses a consumer sovereignty framework: actual markets are compared to an ideal in which consumer choices amidst competitive sellers maximize an aggregation of consumers’ subjective welfare functions. This ideal serves as both a descriptive starting point and normative end point even for analysts who think consumers are frequently irrational and “market failures” are pervasive. Its continued influence has held back recent efforts to account for inequalities and structural problems in consumer markets. This Article argues that it is time to reconsider this approach—to replace the consumer sovereignty framework with a “moral economy” alternative. Instead of treating consumers as welfare maximization machines that sometimes malfunction and markets as deviations from an ideal of perfect competition, we ought to conceptualize consumers as bundles of socially influenced habits and markets as socially constructed and reproduced institutional forms. Instead of treating the goal of consumer markets as having consumer choice drive all outcomes, we ought to interpret the purpose of consumer markets in accordance with their role in contributing to (a contestable account of) human flourishing. Consumer markets are collectively created spaces to serve social ends. Over the course of the argument, the Article considers its implications across a variety of areas of consumer protection, including data governance, disability accommodations, predatory lending, and advertising regulation.