3. Consumer psychology 3.1. Consumer in the market system

Lecture



Consumer behavior is the central issue of modern Western European and especially American economic psychology, embodying the progress of the marketing branch of science, coming from G. Tard.

3.1. Consumer in the market system

There is a correspondence scientific dispute about the place of the consumer in a market economy. Some assign him a central place and insist that the development of the market depends on his needs, others see the consumer as a victim of the economic system.

Professor T. Veblen of the University of Chicago (1857–1929) showed that consumers are subjected to all kinds of social and psychological pressure, forcing them to sometimes buy goods they do not need, to use expensive services. The thirst for profit pushes some entrepreneurs to unethical actions. The scientist is convinced that with time the system will change to a more humanistic one. 19

According to the position of another professor F. Knight (1885-1972), the production of goods and services is determined exclusively by consumers. The desire for profit forces entrepreneurs to produce what the consumer needs, and profit is seen as a reward to the entrepreneur for activities in risk. The author considers market production as the most reasonable 20 .

Both authors take extreme positions, emphasizing different sides of the market system, its positive and negative consequences for a person. In fact, it is true that something is in between, although the objectivity of each of the authors will increase depending on the degree of development of the market, its balance and controllability.

The market influences a person, his psyche, contributes his developing and deforming elements. So, for example, the driving force of the market - demand - makes a person dependent on him, but also provides an opportunity to demonstrate power over time, anticipating demand, having foreseen economic changes, to feel what will happen tomorrow.

Even in the conditions of a developed and balanced market, myths about the absolute unlimited functionality of technology, the moral gap between man and technology and scientific progress and, finally, the myth about the ideal convergence of technology, production and consumption, are developing. These myths cover up "all sorts of counter-expediency in politics and economics" 21 .

Speaking of market power, one should take into account that the domestic market of the 1990s is called a quasi-market, an uncivilized market, where elements of spontaneity and self-regulation, on the one hand, and oligarchic bureaucratic pressure, on the other, are superfluous. The consequence of this is an imbalance of economic processes.

A participant in such a market is experiencing global, universal uncertainty, instability in all areas of economic and near-economic processes. Therefore, the power of the market, as a mechanism of economic life that does not depend on a person, a regulator of his behavior and actions, is often perceived at the present time as destructive, detrimental to the mind and health. Stress-resistant, energetically gifted, active, strong-willed and flexible people feel more protected from it.


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Economic psychology

Terms: Economic psychology