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Consumerism
This session:
Defines and discusses the idea of consumerism.
Describes the protective shield of statutes,regulations, and consumer law that has risen toprotect consumers since Harvey Wileys era.
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Consumerism
Consumerism is a wordwith two meanings:A movement to promote
the rights and powers ofconsumers in relation tosellers.
A powerful ideology in
which the pursuit ofmaterial goods beyondsubsistence shapessocial conduct.
Consumer
A person who usesproducts andservices in a
commercialeconomy.
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Consumerism asan Ideology Consumerism describes a society in which
people define their identities by acquiringand displaying material goods beyond
what they need for subsistence. The full emergence of consumerism came
as economic changes interacted withcultural and social developments.
Declining influence of religion
The industrial revolution
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Consumerism in Perspective
Marketing research reveals a widespread,profound effort to find love, status, and individualityin products.
Materialism is an emphasis on material objects or
money that displaces spiritual, aesthetic, orphilosophical values.
Thorstein Veblen, in his book The Theory of theLeisure Class, challenged the conventionaleconomic wisdom that consumers bought goodsfor their functional utility.
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Consumerism in Perspective (continued)
Complaints about consumerism include:
It leads to commodification of all parts of life
It encourages unwise, irrational, and
unproductive uses of money Heavy consumption is profligate with natural
resources
Consuming beyond necessity violates the idea
the Gods world is already full and complete It distorts our values
It is a pathology of corporate capitalism
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The Consumers
Protective Shield Besides federal laws and regulations, there are
significant protections at the state and local level.
Every state and local government has extensiveconsumer protection laws.
More than 50 federal agencies and bureaus areactive in consumer affairs.
These agencies and bureaus are effective despitechanging ideologies in administrations, powerfulcritics, budget restraints, and too little staff to meetall their statutory mandates.
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mpor an eg s a ons onConsumer Protection in
India Essential Commodities Act Prevention of Food Adulteration Act
Prevention of Black-marketing and
Maintenance of Supplies act
Trade Marks and Merchandise MarksAct
Sale of Goods Act
Indian Patents and Designs Act
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mpor an eg s a ons onConsumer Protection in
IndiaAgricultural Product Grading andMarketing Act
Indian Standard Institute's Certification
Act
Standard Weights and Measures Act
Imports and Exports Controls Act
Packaged Commodities Order
Price and Stock Display Order
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An important landmark in consumer protectionendeavors in India is the Consumer ProtectionAct 1986
(i) District Forum
(ii) State Commission
(iii) National Commission
The Competition Act 2002, which replaced theMRTP Act, contain provisions to deal with
monopolistic, restrictive and unfair tradepractices.
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The Consumer ProductSafety Commission
Created by Congress in 1972.
Directed by six major statutes that mandate it to: Protect the public against unreasonable risks of injury and
death associated with consumer products
Help consumers evaluate the safety of products Develop uniform safety standards for products
Promote research and investigation related to product-related deaths, illnesses, and injuries.
Often cooperates with business.
Regulates every consumer product exceptguns,boats, planes, cars, trucks, foods and drugs,cosmetics, tobacco, and pesticides.
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The National Highway TrafficSafety Administration
Created by Congress in 1966 to: Mandate minimum safety standards for
automobiles, trucks, and their accessories.
Establish fuel economy standards.
Administer state and community highwaysafety grant programs.
Conduct research on, and development anddemonstration of, new vehicle safety
techniques. No other agency has such extensive
controls over a single product.
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The Food and DrugAdministration Evolved out of the authority established by
Congress in the Food and Drug Act of 1906. Nineteen specific areas of responsibility.
Examples:
Regulate the composition, quality, safety, andlabeling of food, food additives, and cosmetics. Require premarket testing of new drugs and
evaluate new drug applications and requests toapprove drugs for experimental use.
Develop standards for the safety andeffectiveness of over-the-counter drugs. Inspect and license manufacturers of biological
products.
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Other Consumer ProtectionAgencies The Federal Trade Commission
The Environmental Protection Agency
Occupational Safety and Health Administration
The Food and Safety Inspection Service
The Securities and Exchange Commission
The Department of Health and Human Services
The Equal Employment Opportunity Commission
The Federal Deposit Insurance Administration
The Pension Benefit Guaranty Corporation
Transportation Security Administration
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Product Liability Law
Beyond regulation, a majorrestraint onbusiness is the ability of consumers to fileproduct liability lawsuits when they areharmed.
The tort system is designed to providecompensation to victims and to deter futuremisconduct.
Product liability is the branch of tort lawthat covers redress for injuries caused bydefective products.
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Negligence
A tort involves either an intentional or anegligent action that causes injury.
Obstacles to consumers in early product
liability law: Caveat emptor Narrow interpretation of the doctrine ofprivity,
which held that consumers could sue only theparty that sold them the product
This legal protective wall for manufacturerswas broken down by the milestone case ofMacPherson v. Buick Motor Co. in 1916.
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Warranty
A warranty is a contract in which theseller guarantees the nature of theproduct.
An express warranty is an explicitclaim made by the manufacturer to thebuyer.
An implied warranty is an unwritten,commonsense warranty arising out ofthe buyers reasonable expectations.
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Strict Liability
The doctrine ofstrict liability established thatanyone who engages in a dangerous activity isliable for damages to others, even if the activity isconducted with utmost care.
The key to strict liability is that the injured personneed not prove negligence to prevail in court.
Under strict liability an injured plaintiff must proveonly that: The manufacturer made a product in a defective condition
that made it unreasonably dangerous to the user
The seller was in the business of selling such products It was unchanged from its manufactured condition when
purchased
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Perspectives onProduct Liability
The U.S. legal system makes it easierfor plaintiffs to win large damage awardsfrom product makers than do the
systems of other countries. Nowhere else in the world has the legal
system created such a favorable
environment for product lawsuits as inthe United States.
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Cost and Benefitsof Lawsuits A recent estimate is that the tort system inflicts an annual
economic cost of $865 billion on society, about 2.8 percent ofGDP, more than triple the percent average of other industrialnations.
Dangerous products have been either taken off the market,had their sales restricted, or been redesigned.
Lawsuit threats and high liability insurance costs regularlycause companies to drop high-risk products.
An unknown number of new products never come to market
because their liability potential scares manufacturers. Business argues that product liability law has moved beyond
equitable victim compensation.
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Concluding Observations
Consumerism is a word with two meanings: itrefers both to a kind ofsociety and to aprotective movement.
Consumerism as a way of life is spreading
around the world because the conditions thatsupport it are becoming more common.
Consumers in the United States are now moreprotected from injury, fraud, and other abuses
than in the past because of strongergovernment regulation and more consumer-friendly common law doctrines.
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