I entered University in 1985 to study economics and I remember thinking, why do people need to protest when people vote with their spending? It was called “consumer sovereignty.” Milton Friedman threw this at Michael Moore, but in his arrogance, he couldn’t see the flaws, the missing variables, back then we didn’t have all of the information to make the “right” decisions. Protesters were the only ones shining a light on a new perspective, or simply the truth.
Although many of us hate to hear logical and cold arguments like Milton Friedman’s, thankfully social media has made Friedman’s thesis (in this case) all the more powerful, but not as he anticipated at the time. Michael Moore suggested that the value that Ford had placed on a life was too low, but Milton suggested that one cannot place an infinite value on life because it would make all commerce impossible. Now, the value of doing the right and ethical thing is nearly infinite, at least well beyond the $200,000,000 he presented for argument. Even Ford learned this lesson when, as written on Wikipedia, “In 1977, the Pinto was subject to the largest recall up to that time. As NHTSA found that the fuel system was defective, modification of 1.5 million vehicles was required to reduce fire risk — and several lawsuits against Ford Motor Company.” In 1977, consumers were in the dark because of marketing, branding and PR spin was far more powerful than simple truth. It was easy to exploit your consumers and other stakeholders. Now, because of social media, it’s nearly impossible to hide any form of exploitation. I’ve watched, over the last 10 years as the marketing industry fell apart, using every tactic, scrambling to get control of the message, only to be out-maneuvered every time by great, authentic cultures with real stories and proactive efforts to improve the lives of all their stakeholders.
It’s time to view Milton Friedman’s theories in the light of 2017, not 1977. Consumer sovereignty is more efficient. Isn’t it amazing Milton?