Consumer sovereignty, economic efficiency and the trade liberalisation debate
by John M. Gowdy, Marsha L. Walton
International Journal of Global Environmental Issues (IJGENVI), Vol. 3, No. 1, 2003

Abstract: In this paper, we examine the policies of the World Trade Organisation (WTO) as an example of the conflict in neoclassical theory between consumer sovereignty and efficiency in production. We begin by going to the roots of neoclassical theory, namely the axioms of consumer choice and the notion of ''economic man''. We argue that another caricature has appeared on the supply side of the demand-supply equation, namely the ''economic commodity'' whose characteristics, like those of its behavioural counterpart, imply that economic policies should be devoid of cultural and environmental context. In this view, the market economy is merely a Darwinian impartial arbitrator filtering out the inefficient firms and production techniques. We briefly examine the lineage of this view going back to ''survival of the fittest'' social Darwinism. WTO policies attempt to institutionalise ''progress through increased efficiency'' by ruling out any restriction of trade based on national sovereignty, or the social or environmental context of the commodity. We present evidence for this in WTO policy statements and we explore the conflict in neoclassical-based policy between the goals of consumer sovereignty and efficiency in production.

Online publication date: Thu, 17-Jul-2003

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