Who is King in Our Economy?

“They traded with you in choice garments, in clothes of blue and embroidered work, and in carpets of many colors and tightly wound cords, which were among your merchandise (Ezekiel 27:24 New International Version). 

Wouldn’t it be wonderful to wake up knowing that you were the “king” of America’s 20 trillion-dollar economy?  Well, you, as an American consumer, are indeed king of the American economy.  For it is the American consumer “voting” with his or her dollars every day that comprises 70 percent of the U.S. economy.  Additionally, other segments of the American economy, namely investment and net exports, are also related to the consumer’s decision-making.  In economic terminology, we refer to the power of the American consumer as “consumer sovereignty.”   

I am always intrigued by the tens of thousands of products in our nation’s grocery stores and, as an economist, it is baffling that so many of these products—literally from all over the world—are there for trifling sums of money.   In many grocery stores, consumers can purchase products from around the globe for merely a few minutes of their labor.  Today’s consumer can purchase buffalo steaks, Swiss chocolate, Greek olive oil, Italian pasta, and goat milk, all with one simple trip to the grocery store.   

Just how do all of these seemingly unusual products find their way into our nation’s grocery chains?  It is the consumer, operating with his or her own free will, who demands products and services that fit his or her needs.  In other words, there is a demand for these products!  Adam Smith, an 18th Century Scottish economist from the University of Glasgow, noted in his treatise The Wealth of Nations that free markets would bring to consumers the products and services they desire—like an invisible hand was at work.  

Our system of free enterprise and largely free markets is not a common occurrence around the world; indeed, it is a rarity.  Most consumers outside of the United States have little or no input into the decisions of what is or is not produced in their economies.  In other words, they “get what they get!”  Sadly, most of these so-called command economies are governed by dictators who have no desire for consumers to have any degree of leverage over what is produced in their economies.  After all, they want to be in charge of all production in their economies.  So, if pink bread is produced that week, that will be the only choice for a consumer.  We would never settle for that in America…and, moreover, we should thank God every day that we live in America, where we can all be consumers and kings simultaneously!

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