The economic importance of consumers is that they are essential to the process of wealth creation (and everyone has wants and needs)
Consumers spend money on goods and services. They may obtain that money from current earnings (derived from their participation in wealth creation) or from other sources of finance: savings, or benefit payments from the government. Tax, health insurance and mortgage payments might have to be deducted from their earnings before they are free to spend the remainder – their so-called disposable income – on what they want and need.
Their freedom of choice has several advantages:
· Their purchasing decisions reflect their personal preferences, not what someone else thinks they might want.
· People's tastes keep pace with modernity – and partly define it.
· People's purchases can reflect their cultures in a pluralist society.
Economic governance is more acceptable as it increases people’s disposable income, and therefore their opportunity to choose for themselves.
The economic importance of consumers is that they are the customers for all goods and services, and wealth cannot be created without consumer demand:
· No-one can make money unless someone is prepared to buy the goods and services that they produce.
· When consumers choose to spend their money immediately, rather than save, they boost economic activity.
People’s desire to have money to spend – to be consumers – is a powerful incentive for them to create wealth, whether through employment or by being self-employed.
(This is an archive of a page intended to form part of Edition 4 of the Patterns of Power series of books. The latest versions are at book contents).