Systemic, Global Change

Dara O’Rourke presents a strong case for the role well-informed consumers can play in promoting a more sustainable and just global economy. O’Rourke argues that, in an economy shaped by global supply chains, nation-states, international organizations, and NGOs lack the capacity to adequately regulate labor, environmental, and human rights issues. However, well-informed and well-intentioned consumers can fill this regulatory void by shaping corporate behavior through their collective purchasing decisions. By “voting with their wallets”—either paying more for products that are greener, healthier, certified, and ethically sourced or buying more of these products rather than their less ethical or sustainable alternatives—consumers can drive changes in global business that will eventually lead to improvements in labor, environmental, and human rights practices up and down supply chains. Morevoer, O’Rourke’s GoodGuide is a perfect example of how academic research focused on information and transparency can be translated into positive change in both consumer and corporate behavior.

However, the analysis provokes two questions that need addressing if we are serious about tapping consumers’ expressed desire to improve global economic relations.

First, is shifting individual consumer purchasing decisions toward more ethical or sustainable or healthier products enough, or do we need to revisit underlying consumption patterns and the business practices that support them? Encouraging individual consumers to purchase better products is a step in the right direction, but it alone will not bring about the more systemic changes O’Rourke (and all of us) desire. Buying better products doesn’t alter the underlying patterns of consumption in advanced economies that drive unhealthy and exploitative business practices. When it comes to products such as the iPhone, or just about any consumer electronics product, exploitative labor practices in suppliers’ factories originate in our own consumer behaviors. The average life cycle for a consumer electronics product is about eight months. After that, consumers want, and are prompted to want, the new model: lighter, faster, with more memory and new features.

During that eight-month cycle, prices drop as often as every two months. This price erosion, along with short product life cycles, means that most retailers do not want to carry large inventories. So, they opt for more frequent shipments, often by air cargo, to meet volatile consumer demand. They thus avoid costly inventory while keeping shelves relatively well stocked, but in doing so they put enormous pressures on producers to deliver smaller, often customized, batches of products as quickly and cheaply as possible.

In response, brands and even suppliers have developed practices that protect themselves, including pull-based ordering systems that signal that products should be assembled only after they are purchased at some retail outlet, just-in-time delivery of components needed to assemble the products rapidly, and “flexible” labor practices that enable factories quickly to hire and fire assembly workers in response to fluctuations in consumer demand and production orders. But these practices place a greater burden on the workers assembling the products. In other words, our desire for the latest model creates enormous volatility in consumer markets that can only be managed through a set of business practices that inevitably leads to excess working hours, low wages, and unhealthy working conditions for millions, who are often women migrant workers.

The relationship between upstream business practices and downstream (factory) labor conditions has been documented not only in the consumer electronics sector but in footwear, apparel, and elsewhere. Thus, if we truly want to redress poor working conditions within most global supply chains, we need first to address our own patterns of consumption—our desire for the latest products at the lowest price.

The second question provoked by O’Rourke’s analysis is whether private politics, either through consumer purchasing decisions or transnational NGO campaigns, can effectively promote a more just and sustainable world without the active role of nation-states. I agree with O’Rourke that well-informed consumers, along with NGOs, can drive reputation-conscious brands and their suppliers to improve labor and environmental standards, but a decade of research on this topic by O’Rourke and others shows that these types of private interventions do not on their own lead to significant and sustained improvements. My own research suggests that private initiatives are most effective either when the state is already active or when private interventions complement rather than substitute for public regulation. This holds true for nations with relatively strong governments (such as Brazil) as well as nations whose governments are still developing (such as Cambodia). Likewise, many of the most innovative public efforts to promote labor and environmental standards—such as those in the Dominican Republic, Argentina, and Brazil—seem to rely on the support of private corporations or civil society groups for effective implementation and enforcement. Thus, rather than focus only on well-informed and well-intentioned consumers, we need to explore more fully how private politics can encrouage government programs to promote reform—and not one store or one factory at a time, but throughout the broader global economy.