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The illusion of choice

The illusion of choice

A graphic entitled “The Illusion of Choice” has been circulating among those keen to expose the interconnectedness of many of the brands available to consumers:

“Interconnectedness” might be a nice way of putting it, for some.

That’s because this graphic plays into the misplaced alarm that has led some consumers to believe that they can only buy eggs from the co-op within a 2-mile radius of their green home. And only then if they’ve kept tabs on the happiness and exercise habits of the chicken its whole life. [See the Business Insider article entitled “These 10 Corporations Control Almost Everything You Buy.”]

Of course, a consumer is free to choose that option, and to pay a premium price to boot.

But if only these consumers focused on preventing the obstruction of consumer choice,  we might be onto something.

Milton Friedman counseled that the best way to increase competition and decrease the threat of the conglomerate is to have complete free trade. And that while “conglomerates are not very attractive,” they are not the same thing as a government conglomerate:

It’s government measures that have promoted conglomerates….

The best things you can do are first to have complete free trade so you can have conglomerates in other countries compete with conglomerates in this country….

Conglomerates are not very attractive, I’d much rather have a lot of small enterprises. But there’s all the difference in the world between a private conglomerate and a government conglomerate. In general, the government conglomerate can get money from you without your agreeing to give it to them….so bad as private conglomerates are, they’re less bad than one of the alternatives….

Now, what would a similar graphic of the government conglomerate look like. Even, the political system? Where is the real illusion of choice?

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Comments

This graphic is a BS because there are way more different brands owned by other companies than depicted here. And this graphic is pointless because these companies do not hide the fact that they make these products, but they actually proudly advertise that. And it is pointless because following this logic it would be a bad thing or something for GM to produce Chevrolet, GMC, Buick and Cadillacs. I don’t hear anyone complaint about that.

    ThomasD in reply to merig00. | May 7, 2012 at 10:50 am

    And this graphic is pointless because these companies do not hide the fact that they make these products

    Agreed, Nizoral Shampoo is doubly pointless because the product is still under patent protection and will remain a single source item until the patent expires.

    Whereas the chart does not include the myriad acetaminophen containing alternatives to brand name Tylenol that can be had from people other than McNeil/J&J.

    jdkchem in reply to merig00. | May 7, 2012 at 11:55 am

    No Colgate-Palmolive!

Actually, these companies do not make the products. They put a label on them.

In the last few months, there has been a collapse at the local Vons (Safeway) in mayonnaise brands. Suddenly the labels have been altered. Some company bought up all the different brands, and began to erase the differences among them.

Representatives of the buyer will typically tell you that customers have loyalty to brands that has no relationship with value, that is, the characteristics of a brand. This is nonsense. Consumers will talk about color, and smell, and taste, which are a bit more complex that the recipe + quality control formula of a company, particularly a conglomerate where the VPs are all busy fighting over turf instead of producing real products.

What they will do is “analyze” the “numbers” and get rid of a bunch of production sites based ONLY on the numbers, and not on quality record, or potential. Then they will smear the same formulation across the different brands, and use different people to make the new, cheaper formulation. It won’t be the same, and people will know it, and they will be turned off.

And Safeway (Vons) will have one — generic– brand of mayonnaise. Generic mayonnaise has been on the market for years. If I’d wanted to buy it, I’d have switched before now.

I think some economist ought to do a study on what happens to both brand and value of a successful company bought by a conglomerate, to see the damage done by decision makers who are not connected to the product. It would be instructive.

    Ragspierre in reply to Valerie. | May 7, 2012 at 11:00 am

    I believe you’ll find a chapter on brands in Dr. Sowell’s “Basic Economics”.

    Brands are quite important, and provide consumers with a lot of information very quickly. They can be extremely valuable.

I buy local eggs when I can because they taste better. I dislike the green posturing as much as anyone, but support local businesses when I like their products. For non-perishable items, I generally buy the store brand, which is 10-20% cheaper than the name-brand item. Consequently, I find that I only buy 5-10 of these brands on a regular basis.

Mostly I think what the reaction to this illustrates is the economic illiteracy of people. People see data that they’ve never really thought about before and find it shocking and off-putting because it’s never occurred to them.

I think someone should make a similar graphic about where our politicians and judges went to university. That might open some eyes to a real “illusion of choice.”

    That’s the same reason I buy organic chicken/meat and store brand canned food. Organic chicken tastes better and canned food is pretty much all the same.

      ThomasD in reply to merig00. | May 7, 2012 at 10:54 am

      If you don’t mind frozen, buy the old laying hens. They are cheap, and the best flavor for any sort of moist slow cook method (soups, stews, fricassee, etc.)

    votermom in reply to Zeke. | May 7, 2012 at 11:00 am

    I think someone should make a similar graphic about where our politicians and judges went to university.

    Love this idea.

      Anne Sorock in reply to votermom. | May 7, 2012 at 12:38 pm

      I agree. Would love to see what the Ivy League is responsible for; I’m sure they can take credit for more than their fair share of the Lefties out there.

jimzinsocal | May 7, 2012 at 10:02 am

Yeah. Not like the company interconectedness is a surprise really or hidden. Many times a company will buy into a company that used to be a supplier in order to minimize costs. An example might be Burger King purchasing the Bakery Company that supplies all its breads.

With Business Insider, Im always wary of the subliminal point they are pushing with stuff like this. Beyond the curiosity factor, what is the point? That somehow all this conectedness is a bad thing? That as a matter of some imagined “fairness” we should all scurry along to the higher priced botique shops to stick it to the man?
Dont misunderstand..we all like the small shops of one sort or another but for the most part we stick with responsible name brands. If for no other reasons than cost and the ability to correct some hideous problem should one develop.

Midwest Rhino | May 7, 2012 at 10:09 am

Where are all the generics? I buy a lot of WalMart and Aldi’s generics that I find just as good … and generics for all the drugs.

I have more issue with GE and their man in the White House … how many appliances did they get subsidized, yet paid no tax? The carve outs for lobbyists in the DC hallways is the bigger issue. The “important people” get to write the laws to add barriers to entry, and to protect their niche.

There are plans to eliminate the loopholes … but our government seems owned by the “loopholers”.

jimzinsocal | May 7, 2012 at 10:20 am

Graphic for Government might look like so

http://www.opensecrets.org/pres12/sectorall.php?cycle=2012

This is silly for several reasons.

One is that brands owned by a larger concern can and often DO remain VERY competitive with even their stable-mates.

But also note that some of the conglomerates carefully avoid DIRECTLY competitive brand ownership.

One of the lessons of the BIGGER IS BETTER movement in the latter half of last century is that, while integration CAN lead to economies, it can ALSO lead to dis-economies. Which is why you saw divestitures after the spate of acquisitions.

Also, bear in mind that one of the bigger budget items for a lot of these outfits is R&D…finding new ways to please you an I with NEW choices we never had before.

    Ragspierre in reply to Ragspierre. | May 7, 2012 at 11:27 am

    I’ve noted that pretty much everything I post gets ONE “thumbs down”, even if it is a tribute to apple pie.

    I kinda reckon I know where those come from, too.

    Fillie, did you see Robert Reich is singing your song on the whole “income inequality” and redistribution gospel?

    I know of NO Conservative who embraces that. Odd, innit…???

      jimg in reply to Ragspierre. | May 7, 2012 at 2:22 pm

      While I don’t claim to speak for the rest of the regular readers, I find the childish spitting match between the two of you as annoying as it is tedious.

      If it were my blog, I would’ve banned the both of you by now.

        Ragspierre in reply to jimg. | May 7, 2012 at 4:50 pm

        Well, opinions are like a $50,000.00 Federal debt…we all have one.

        Fillie makes a lot of noise about speaking for the TEA Party, and deciding who is and is not a conservative.

        I quote him warmly approving of the whole OWS 99% meme, and calling for “a return [???] to better laws that insure more fair income distribution”. I know of no conservative voice making that arguement, and it sure isn’t a TEA Party theme.

        I call him on that dichotomy.

        But you have my permission to skip any of my posts. Sorry you find them onerous.

        Browndog in reply to jimg. | May 7, 2012 at 4:52 pm

        Now, now.

        BAN right away?

        In civil blog society, when 2 commenters use a blog to engage in a private pissing match, normally it stops when other commenters tell them to knock it off.

        I’d say you’ve done your part.

Sorry, after that comment, I couldn’t resist the “thumbs down”. In fact, I agree with you. All the brouhaha over brands and conglomerates is really just another way of saying “evil corporations”. The next step is usually demagoguery about how much money is wasted on advertising and how that money would be better spent helping the poor or researching a cure for AIDS. Or sometimes, the focus turns to the alleged economic efficiency of eliminating brands altogether so that we can move to the utopian world of “Repo Man”-style generics. I mean, how many different kinds of laundry soap, beer, cola, cars, deodorants, etc are really needed? See also, “Trabant”.

    Ragspierre in reply to OCBill. | May 7, 2012 at 12:27 pm

    I have a friend (no…really) who was with State during the collapse of the Soviet Union and fluent in Russian.

    He worked with several early exiles. One common thread was helping them deal with the sensory overload they would experience on going into any large American store. They were overwhelmed by the choices they had. They found making a choice difficult, since for most of their lives all that “choicey stuff” was helpfully handled for them by their kommissars.

    I personally LOVE all the creative, motivated, careful people who daily bring me safe, tasty, inexpensive food choices the like of which no people in history have had.

    Capitalism is the greatest boon to humanity in all of our history, IMNHO.

What does Soviet premier Nikita S. Khrushchev and Great Britain’s Queen Elizabeth II have in common?

Both, during their first State visits to The United States, insisted on touring a “new American phenomenon” in the late 1950’s-

An American supermarket.

2nd Ammendment Mother | May 7, 2012 at 1:15 pm

A good friend of ours keeps chickens and a garden primarily for their own pleasure and pest control. A few years ago they started selling some of their surplus at the 2 local farmer’s markets. One is in a rather upscale part of town. One morning, one of the customers inquired whether her eggs were from her own chickens. My friend answered yes. She asked what they were fed, etc. My friend answered her questions, expounding on the virtues of their feed mix and the higher protein content in the eggs their chickens produced. Then she asked whether my friends chickens were “free range” or “penned”. My friend answered that they had a very nice large pen. The customer then informed her she could only purchase eggs from free range chickens. My friend is the sweetest person in the world but when you spend 20 minutes with a potential customer you can get a little frustrated. So she smiled sweetly and told the customer she completely understood, that they couldn’t provide what she needed, since they weren’t called “free range chickens” at her place, they would be called “coyote bait”.

Do feel free to buy as much as you like from Kraft. I own stock. 😀

(And I almost never buy name brands of any kind, including clothing.)

But if only these consumers focused on preventing the obstruction of consumer choice, we might be onto something.

Speaking of obstruction, I live in California and recently decided to buy a new lamp so I could read in a heretofore too-dark-to-read-in corner of our living room. I learned that such lamps (the kind that make enough light to read by) are no longer available for sale in California. Everywhere I turned, reading lamps are now “reading lamps”. The brightest bulb you can get in a desk lamp (or floor lamp) is a 13-watt CFL (officially equivalent to a 60 watt bulb, but really more like a 40 watt incandescent).

Well, I thought I could always replace the standard bulb with a 26 watt CFL (allegedly equivalent to a 100 watt incandescent). NOPE. All the fixtures are now rated for only 13 watt CFL’s. Any higher and there’s a fire risk (allegedly). I checked Home Depot, Lowe’s, Target, Wal-Mart, Office Depot, and Staples. Same thing. 13 watt CFL’s. Amazon had some that looked interesting, but they’re not for sale in the state of California. If I don’t like CFL’s and I’m willing to spend a little more, say around $200, I can get an LED lamp that produces the same amount of light as a 13 watt CFL.

    2nd Ammendment Mother in reply to OCBill. | May 7, 2012 at 4:03 pm

    Sounds like you’ve got a garage sale trip to Nevada in your future.

    Ragspierre in reply to OCBill. | May 7, 2012 at 5:06 pm

    eBay and Amazon are worth a try.

      I’m figuring Salvation Army, GoodWill, and maybe some garage/estate sales.

        Ragspierre in reply to OCBill. | May 7, 2012 at 6:00 pm

        Yep. Go old school. That will leave you needing to buy bulbs from one of those benighted regions where there is no rule of law.

        Like Texas.

        Good luck! Your “light fix” will only last until you are plunged into the 1800s again when the power fails.

        You might want to check into whale-oil lamps…

How can it be a surprise to educated and literate Americans that after at least 160 years of deliberate efforts by politicians practicing crony capitalism that actual control over large portions of each of the major industries in the U.S. is in the hands of a relatively small group of people? Can you say, “interlocking boards of directors”, “holding companies”, and “oh, my daddy’s is a Senator, so it’s okay”??

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