On shaping the market

Alexander Duncan discusses the unfortunate tendency on the left to assume that markets are the enemy rather than a potential force for positive as well as negative change:

Many financial planners, including myself, are inspired by a vision and a mission that, to us, seems personally empowering and socially progressive. To others, however, money making seems conservative and antisocial. I experience this attitude all the time. I find it disappointing though, because it means that those people have bought into the notion that they are oppressed and exploited and, by buying into that idea (even if true), they perpetuate the conclusion that they are powerless and can do nothing.

By eschewing active participation in the social economy that we all create we have turned the control of the economy over to the gatekeepers.

I don't agree with all of Alexander's analysis. But it's tough to dispute that there's plenty of potential to shape the economy through progressive investing - and that many of the opportunities are now missed, despite the massive investment clout wielded (for example) by pension plans whose owners may largely support progressive policies.

That said, I'll note that progressive investing isn't the only way to try to shape the market, and I'm curious to see to what extent readers of this site try to buy their own necessities so as to send a message to sellers and manufacturers. There are certainly some efforts in the U.S. to reshape purchasing patterns based on political donations. But I'm not aware of any similar movement in Canada, and the focus on political parties seems to miss the point in any event, as the largest influence held by most sellers has much more to do with corporate operations rather than political donations.

With that in mind, a few questions which I'd like to see people consider a bit more often in their personal purchasing decisions:

1. What is your standard for making a purchase to begin with? Do you buy based only on need, or do you spend significant amounts of money based on impulse or on replacing goods which are still useful?

2. Do you buy goods and services based solely on product and price, or do you also take into account other factors such as local ownership, treatment of labour or environmental reputation in your buying decisions?

3. Assuming that you do consider more than just product and price, which of the following statements accurately describes your buying habits? (More than one may be true.)
(a) I avoid sellers with the worst reputations, particularly where there's an organized boycott designed to bring attention to that seller.
(b) I consider the relative merits (to the best of my knowledge) of the available sellers, and consider that as one factor in my purchasing decisions.
(c) I buy only from the sellers with the best reputations, even if that means paying more for a product.

4. How much research do you do in determining how to evaluate sellers? Do you rely largely on news stories and word of mouth, or do you actively seek out information from consumer groups and the sellers themselves?

My own answers are rather middle-of-the-road: I plan to avoid unnecessary purchases, but can certainly find a good number that wind up being far from necessary; I do take added factors into account in buying; I try both to avoid the absolute worst corporate offenders and include corporate reputation as a factor, though I haven't yet taken the leap toward buying only with the absolute best corporate citizens; and I do a bit of research as to different vendors, though more out of general interest than as a precursor to a given purchase.

That said, it's clear that there's far more that I could do to direct my spending toward better social outcomes...and even the current amount tends to raise some eyebrows. Which speaks to the degree to which the current assumptions about when, what and how to buy go unchallenged - and the need to try to develop a deeper analysis of what effect our purchases have on the market generally.

Alexander rightly warns that one of the surest ways to ensure the success of conventional market wisdom is to act as if it were true. In contrast, a focus on progressive priorities (both in financial markets and in purchasing decisions) can work wonders in helping to modify corporate behaviour...so long as progressives recognize the opportunity to shape the markets, and are willing to put their money where their principles are.