five - Differentiating consumers in professional services: information, empowerment and the emergence of the fragmented consumer

Summary

Introduction: politics, information and empowerment

Arguably one of the most provocative theoretical accounts of consumer sovereignty was articulated more than half a century ago by the economist L.E. von Mises (quoted in Gonse, 1990). At the heart of his argument lay the notion that consumers are empowered through ‘catalytic, or indirect, power’, where markets operating free from political or sectoral interests ensured that organisations and professionals were responsive to the needs of consumers. However, Gonse (1990, p 138), articulating what has now become a familiar critique of this highly theoretical position, posed the question of whether this perspective could be:

convincing in the face of externalities, imperfect consumer rationality, variations in the distribution of income of consumers, real costs, monopoly, mass production of standardised products, and [producers’] selling efforts?

These issues still form the basis of contemporary debate around consumer empowerment, not least in professional service settings. However, in the past two decades significant changes have occurred in the relationship between producers and consumers, across a range of professional service settings from healthcare to financial services, which have served to reinvigorate the debate around consumer empowerment. Two interconnected sets of developments lie at the core of this renewal of the consumer empowerment debate.

First, the articulation by the New Right in the 1980s of the primacy of markets, anchored in neoclassical economic theory, witnessed, inter alia, the transferral of responsibilities from the state to the individual, the liberalisation of markets and radical change in the organisation of public services (Laing and Hogg, 2002). At the core of this shift was a fundamental change in the relationship between service providers and users. From relationships being couched in terms of citizenship, with myriad mutual commitments and obligations, from being dominated by respect for professional status, and from being expressed in the use of terms such as ‘patients’ and ‘clients’, relationships are increasingly articulated in consumerist terms, with emphasis placed on the rights of service users as sovereign individuals (Walsh, 1994; Keaney, 1999). The promotion of an overtly consumerist culture in public services, together with changes in the regulation of financial and, subsequently, legal markets, has generated an environment in which concepts of consumer empowerment have gained renewed relevance and power.