methods of manufacture, sale, or installation than those currently employed, the effect upon consumers is to limit the alternatives from which they can choose. The proscribed goods or methods might not find favor with consumers' even if offered freely alongside those which the industry does offer. When, however, by the shelving of patents, or the use of tying contracts for full-line forcing, or through trade and labor agreements, the alternative products or methods are excluded from the market, freedom of choice is denied to consumers and is exercised for them by parties with an adverse interest.

No other form of control strikes more directly at the vitals of a system of free enterprise or more certainly threatens its displacement than those which preclude experiment and innovation. A major virtue of free enterprise, distinguishing it from centralized planning, is the trial-and-error process by which entrepreneurs when unrestrained seek to find new products or new methods for winning a share of the consumer market. This provides stimulus to invention and is the source of progress. As a guide to progress in goods or services, there can be no permanently satisfactory substitute for the exercise of choice and the expression of opinion by consumers after alternatives have been offered for their sampling.

Control of Choice.

Witnesses testifying before the Temporary National Economic Committee in May 1939 described the handicaps experienced by consumers through lack of reliable and useful information when they are making choices in the marketplace. Two witnesses from industry illustrated from their experience how this lack on the part of consumers interferes with competition and contributes to concentration of control in the consumer market. A municipal purchasing agent drew upon his professional experience to show how accurate information about commodities can effect large savings for a purchaser.

6

Consumer difficulties on this score are: Misinformation, lack of information, and lack of objective standards upon which to base useful commodity information. As a remedy for the first, there is an acknowledged responsibility of governments to afford protection to consumers. For the second, consumers employ their own devices for testing and rating commodities, and collaborate with merchants on informative selling programs. These undertakings, however, are seriously hampered by the inadequacy of existing standards by which the use characteristics of consumer commodities can be tested, rated, and described, and the failure on the part of merchandisers to use such standards as are available for that purpose.

Before the advent of modern business enterprise, merchandising escaped these consumer problems because the variety of commodities offered was severely limited, and those that were available were controlled as to quality and representations by rules of the producer guilds. Release from the freezing traditions and controls of that system cleared the way for the great advances of modern industry. The resulting variety of goods open to consumer choice has been phenomenal. The advance in quality and usefulness of available products has been rapid and persistent.

• Hearings before the Temporary National Economic Committee, Part 8, Problems of the Consumer.

To enable consumers to keep pace with these changes a corresponding improvement in the technique of describing and rating commodities is necessary, so that consumers, without themselves becoming masters of each craft, may compare goods and select them according to their own needs and purses. Quality standards could do for the distribution of goods what scientific and engineering skills have done for production. They would provide objective measures of content, construction, or utility. They would be modified and expanded as advances in production technique become established. They would facilitate comparison of one commodity with another in terms comprehensible to the lay purchaser of household goods. The ever increasing use, indeed, the necessity, of objective standards in the productive process itself and in transactions between buyers and sellers antecedent to the sale of final products to consumers gives convincing evidence of what standards can accomplish for both production and distribution."

Development of such standards for consumer use has been negligible. This fact, coupled with marked development over the last 20 years of the devices of sales promotion, has tended to retard rather than advance what consumers are able to know about their alternatives, and consequently to limit their freedom of choice. Opportunity for choosing among many possibilities has continued to expand, but the means of exercising it intelligently are more difficult than in the days of a simpler economy. One of the changes in emphasis that marked the decade of the 1920's was a shift in promotional effort from the creation of goods to the creation of mass acceptance on a Nation-wide scale. New skills were developed for influencing consumer choice, but the application of objective standards to that problem was not one of the means employed. Because standards for consumer use have not been developed to appreciable extent, neither the obligation of Government to protect consumers from misinformation nor the effort of consumers to supply themselves with true information has measured up to the task of keeping consumers abreast of the rapid evolution of modern industry. As ultimate controllers of the economic system they are, so to speak, disfranchised for want of useful information about the choices offered to them.

What the Federal Government has been doing to protect consumers from misinformation is cataloged in a subsequent section. Its work in this field has been enlarged by recent laws. There is at least a beginning in these laws and their administration to advance consumer protection into the field of requiring that true and necessary facts be told as well as to penalize the telling of untrue facts. Court opinions seem to tend in the direction of holding the consumer's right to be told the truth above the vendor's right to take advantage of what the consumer doesn't know." There is a beginning, too, in some State governments to get the facts about rival products and to tell them to consumers with trade names identified. However, budgets for all

7See Temporary National Economic Committee Monograph No. 24, Consumer Standards, by S. P. Kaidanovsky and Alice L. Edwards.

8 Federal Trade Commission v. Standard Education Society et al. (302 U. S. 112, 116). "The fact that a false statement may be obviously false to those who are trained and experienced does not change its character, nor take away its power to deceive others less experienced. There is no duty resting upon a citizen to suspect the honesty of those with whom he transacts business. Laws are made to protect the trusting as well as the suspicious. The best element of business has long since decided that honesty should govern competitive enterprises, and that the rule of caveat emptor should not be relied upon to reward fraud and deception."

such work, State or Federal, are insignificant in amount, with the result that the protection given to consumers is decidedly incomplete. A further drawback is the failure of most Government agencies to see to it that consumers learn of the actions taken in their behalf against misrepresentation. Formal rulings, wholly legal in concept, are released to the press in due course, but come to the attention of consumers only insofar as they are rewritten in consumer language and published where the average reader is likely to see them. Most fundamental of the limitations on this protection of consumers is the lack of objective commodity standards by which falsehoods and halftruths might be gaged, or truth defined. In the absence of such standards each action against alleged misrepresentation calls for elaborate, expensive, and time-consuming proofs. By the time a decision is reached it is likely to have historical interest only, because meanwhile a new form of misrepresentation of the product may have been substituted for the one in question.

Limitations of the testing and rating services operated by consumers themselves have been well stated in testimony before the committee.o Here, again, the chief hindrance is lack of commodity standards as a basis for rating the products tested. Comparative information concerning similar or substitute products is necessary to informed consumer choice. Standard scientific descriptions of the quality factors of goods are necessary if such comparisons are to have any objective basis in fact.10 The same problem confronts and delays the effort of consumer and trade groups working together to promote more informative selling practices.

Voluntary adoption of informative selling methods by individual concerns incurs the same difficulty. Full and accurate description of a particular product is usually impracticable and, in itself, not wholly serviceable. It does not permit comparison of that product with another product, except when the latter also is fully described and then only if consumers are sufficiently expert to make comparative judgments of the two sets of facts. Standards, if available, would provide a system of rating all like products in such manner that any consumer might compare them.

Consumer standards, however, cannot be fixed by individual concerns. By their very nature they must be applicable to all concerns alike. They must be based upon the experience of all and arrived at through group or Government action. Furthermore, much remains to be discovered about the quality and use characteristics of consumer goods if standards are to be developed. Sampling, inspection, and test techniques must be perfected. This will require extensive investigation drawing upon all available research resources. In short, the standards which consumers must have if they are to function effec tively in their own interest and for the economy as a whole call for an extensive program of organized action, involving manufacturers, distributors, consumers, and Government agencies.

The task is extensive, but not overwhelming. Compared with the accomplishments of applied science in the development of production

Testimony of Dexter Masters, Hearings before the Temporary National Economic Committee, Part 8, pp. 3329-3343. See also Consumers' Union Reports, January 1941, p. 3, The January Wonderland.

10 See the testimony of L. R. Walker, Hearings before the Temporary National Economic Committee, Part 8, pp. 3413-3432.

techniques, it is relatively simple. Not lack of ability, but lack of interest, seems to be the cue for failure of our economy thus far to adopt appropriate methods for transferring the products of industry into consumer hands-lack of interest on the part of vendors who find it easier to deal with uninformed consumers; lack of interest on the part of governments which to date have recognized few specific obligations to serve consumer welfare; and lack of interest among consumers themselves.

This is about where matters stand today on the question of the consumer's freedom to choose. Progress is being made toward providing those standards which would liberate and implement consumer choice. Yet it is slow and is made against great odds. It is a collective task, but there is no widespread agreement that it should be undertaken and carried through. On the contrary, there are many evidences of unwillingness to take part or to permit progress to be made. It is a social development that appears essential to the expressed desire of many to preserve and make workable a system of free enterprise; yet it is ignored, even derided, as a step which concerns consumers only, and among consumers only the articulate minority.

It is true there is widespread consumer indifference, which is valuable to any who may desire that consumers be not able to influence the trends of industry through the power of their informed choice. Their indifference may be cultivated by diverting attention to the many delightful but irrelevant features of the commodities they buy. So cultivated, consumer choice tends to escape from the realm of fact to the field of fantasy. It becomes something quite different from the matterof-fact pursuit of self interest which characterizes alike the buying habits of a shrewd, necessitous housewife and of the purchasing agent of a multi-million-dollar corporation. It becomes more emotional than reasonable. It is mass acceptance. To the degree their purchasing decisions can be regimented in this manner, consumers become the controlled rather than the controlling factor in the economy.

This leads to the consideration of what part is played by concentrations of economic power in the control of consumer choice. Selling pressure is more compellingly exerted by larger concerns. Persistent persuasion on a large scale can establish, if successful, what economists speak of as the quasi-monopoly of a brand name.11 It can also exact a remunerative differential in price for actual or supposed extra values in the branded product, or for credit or other services sold along with the product. On the other hand, it is true that sales pressures exerted by several powerful rivals tend to cancel each other in their persuasive effect on consumers without, however, substituting for the conflict of bewilderments in their minds the wherewithal of informed choice.12 Monopolies, however, enjoy no monopoly of the art of telling consumers as little as possible about what goods are good for. Sales methods that are as little informative as high-pressure Nation-wide campaigns are used by smaller concerns which can spend no great sums to put their products across. When the withholding of useful comparative information about products is the established practice,

11 Whether or not such brands represent better values for the consumer than less successful brands is not here in question. The question is whether the preference they enjoy

is decided by consumers or for them.

12 Also without yielding up to the multitude of little brands any part of the lion's share of the market which a few large brands in many commodity lines enjoy.

the large withholders can do so to better effect than the little withholders.

Concentrated economic power alone is not responsible for the prac tice of not telling consumers what they need to know; but neither has it contributed very much as yet to the elimination of that practice. Several of the good examples of informative selling now to be found. are furnished, to be sure, by large factors in manufacturing or distribution. But they are few. Big business has done very little to date to modernize its selling practices in the same way it has modernized production. Big names still inspire consumer confidence more because they are big than because of what they tell about the goods they have to sell. Large concerns do not appear to feel that in return for the faith expressed in them by mass acceptance of their products they have a duty to deal more candidly with consumers. That still is not recognized as a quid pro quo, except by a few.

Whether or not the withholding of information is a peculiar device of concentrated economic power, for consumers it remains a central fact of modern life. With the complexity and variety of products offered on today's markets, scientific objective commodity standards are the only means in sight whereby the interest of consumers can be geared in a sound and satisfactory way to the modern processes of production and distribution. Freedom of choice is not something that happens; it must be created by establishing and maintaining conditions that permit people to know what they are choosing and to choose as suits them best. To achieve it under modern conditions of manufacture and sale requires more than lip service; it requires the cooperative, far-sighted labors of many people.

The prosperity and indeed the preservation of the Nation are linked to business success. Encouragement to business is a major concern of public policy. Business enterprise permeates our culture. Almost, it seems, consumers exist to make business successful. But only when the ultimate customers of business are able to evaluate its performance in terms of their own well-being-the goods it makes, the services it renders can we be sure that business success is firmly linked to the general welfare.

GOVERNMENT AID FOR CONSUMERS

Consumers are assisted by whatever government does to keep open the channels of trade, to promote conditions in which a larger and better supply of goods regularly comes to market, and at prices which permit consumers to purchase them. They are directly assisted by what government may do to keep harmful products off the market, or to bring more information to consumers about commodities. They may find indirect assistance also in government information that would interpret to them the current controls and conditions in industry which determine the quantity and value of its output.

Because consumers transact their business almost entirely on an individual basis, they possess unequal bargaining power with other economic units, most of which are organized and are steadily extending the scope and power of their organization. Consumers generally would not desire to reverse that trend, since most of them probably take part in some form of organized action in their income-earning capacity. But in their income-spending activites for the most part