Limits of “consumer sovereignty”

Issues of the limits of individual liberty have long been debated by moral philosophers. American democracy was founded on the idea of maximizing individual liberty and rights, but within limits. Basically the goal has been to allow people to do what they want, as long as it does not interfere with the freedom or well-being of others[1]. As we have moved from an “empty world” to a “full world” more and more of the actions of individuals do interfere with others. We have also gradually expanded our view of who counts as an “other”. Until fairly recently, women, blacks, and other minorities were not included among those having basic rights that could be trampled on by individual actions. More recently, we are beginning to acknowledge the rights of future members of our own species and of other species with whom we share the planet.

The fundamental question remains, however, as to how we should assess and control “interference” while allowing the maximum individual liberty, all within the constraints of no harm to others. In a full, interconnected world, almost anything we choose to do has positive and negative impacts on a whole host of others, both now and in the future. The simple act of buying a can of beans implies a whole range of negative environmental impacts on many “others” incurred during the production of the can, the growing of the beans, and the shipment of the beans to market. Should we be “free” to damage the well-being of others in this, and countless other ways?

The conventional economic paradigm assumes ‘consumer sovereignty’ – the idea that tastes and preferences are exogenous to the economic system, and that the economic problem consists of optimally satisfying those “sovereign” preferences. But if preferences are expected to change over time and under the influence of education, advertising, changing cultural assumptions, etc., then this assumption is not adequate. Different criteria of optimality are needed. How preferences change, how they relate to the goal of sustainability and other social goals, and how they can or should be actively influenced to satisfy the new criteria needs to be determined.

Over the years, society has developed several institutions to deal with the issue of the limits of consumer sovereignty in an increasingly full world. Laws constrain individuals from violating the rights of others and require punishment and/or compensation for transgressions. The market system is an institution for insuring that an individual’s freedom and property are not violated unless there is fair, mutually agreed on compensation. The problem is that many impacts occur outside the market system and/or are not adequately covered by laws. These “externalities” (such as the environmental impacts of bean production and consumption) are pervasive in our now full world and leaving these costs out of the market and legal systems threatens everyone’s liberty and freedom. It is no different than allowing customers to come into a food store and simply take what they want from the shelves without paying. We would certainly think that the excuse “making me pay would infringe on my personal liberty and freedom” to be a ridiculous one in this case, and it is equally ridiculous when offered as justification for polluters not paying the currently extra-market costs of their activities.

Further Reading

  • Norton, B., R. Costanza, and R. Bishop. 1998. The evolution of preferences: why “sovereign” preferences may not lead to sustainable policies and what to do about it. Ecological Economics, 24:193-211.


  1. ^ We relax this dictum a bit in the case of drug and alcohol abuse where individual liberty comes in conflict with the well being of the same individual.

This Informational Box is an excerpt from An Introduction to Ecological Economics by Robert Costanza, John H Cumberland, Herman Daly, Robert Goodland, Richard B Norgaard. ISBN: 1884015727



Costanza, R. (2007). Limits of “consumer sovereignty”. Retrieved from


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