How would consumers protect themselves without the state?

market consumer protection

Libertarians say that government regulation is both harmful and unnecessary.  We say that the market would provide the mechanisms that the government claims only it is capable of providing.  But without the state (presumably) filtering the options, how would consumers know who to trust?

A lot of people incorrectly assume that it’s the government that protects consumers nowadays when in reality it is market mechanisms in play.  People like to think that if it were not for the state, businesses would be running wild taking advantage of its customers.  If you’re not having problems dealing with a business, it must be because the government is there protecting you, acting as a shield against the unscrupulous businessmen who are hellbent on taking your money and giving you nothing in return.

But that idea is just flat out absurd.  We can all think of examples of being treated very well by businesses and we all have certain “go to’s.”  Does a given business treat you well because they feel the heavy hand of the state ready to smack them down if they don’t provide you with the best experience possible?  Or is it more likely that a business owner realizes that the best way he can make money is by making sure you’re happy with your experience so that you not only patronize him again but also tell your friends and family about his business?

And when you feel like you weren’t treated fairly or well, do you go right back in and accept another bad experience?  Of course not, you look at other options and maybe you’ll even leave some feedback on one of the many online review repositories like Yelp.

If it becomes more complicated, then there is an incentive for consumer protection groups to form to provide additional guidance.  These businesses become the “proof” that a given product meets certain standards.  It’s simple outsourcing.

There’s no magic involved in making informed decisions on consumption.  You don’t need someone explicitly telling you which products are okay to purchase.  Businesses wouldn’t stock their shelves with bad products because they don’t want to waste shelf or storage space on items they cannot sell.

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