slavefreetrade

Blog Articles


By - Brian Iselin

Published : 08-05-2018

New Economics and slavefreetrade


We are often asked questions about behavior. Why for example do consumers buy slave-made products? Or, why do businesses allow slavery within their operations?

Our answer:

We don’t know it all. Yet.

What we do know is that, what we once knew for sure; or felt we knew for sure about consumer and business behavior, is no longer the truth.

Orthodox economics is out of the window

Global economic crises of various degrees and types of the last few decades have demonstrated two things with clarity:

  1. Orthodox economics is grappling to understand and explain most things about itself; and
  2. The traditional foundations of orthodox economics have been discredited in failing to account for human behaviour that does not fit those rational-economics models. Reality has found a way to turn economic theory on its head. Enter; behavioural economics; the science of understanding human economic behviour. Profound knowledge – along with many more questions - has come from over a decade of behaviour-focused experimentation, exploration, trials, scenario building and fieldwork.

And so, when exploring, explaining, and understanding slavery, we do not theorise and explain consumer and business economic behaviour based on rational economic theory.

Irrationality in supply and demand behaviour

Consumers and businesses do not make buying decisions rationally. And, even if they did, they are not fully equipped with the information they need to make ‘good’ decisions. All people make bad decisions at some point; I sure do. However, the classical economic belief that we behave as selfish, independent and calculating machines, is poorly founded. We don’t behave that way at all. Instincts and actions are not as orthodox economics had traditionally assumed.

To a great extent, slavefreetrade is concerned with the simplest of economic activities: buying goods and services. Behavioural economics has proven that this is not governed by rational ways of buying and selling. Instead, buying and selling involves mutual understanding, communications, and trust – the fundamental characteristics of relationships between people.

According to rational economic theory, consumers make informed, rational choices about what we buy. That is, we choose goods that makes us most happy and which are within budget. The theory suggests that the consumer is sovereign; it chooses and business provides. The consumer in this theory is all-powerful.

However, a few minutes spent looking around a men’s clothing store demonstrates to me that this is not true. It is a disempowering experience for the most part. Indeed, what those few minutes prove, multiplied by millions of times a day around the world, is that consumers do not dictate what is on offer and how much it costs.

Instead, what we do to survive the modern shopping experience, is to virtually ignore price and budget, and perhaps even colour, fit, and style. And we also virtually ignore what we might rationally know – from a news headline, for example; about a business or a brand.

Consumer power

At slavefreetrade, we do not over-estimate the power of the consumer to shape the way business does business. Nor do we assume a consumer who always makes rational purchases, uses their money wisely and never regrets their purchases.

But at the same time, we don’t underestimate the consumer.

Businesses who make products for a certain type of consumer, - a selective and informed consumer, in a way the consumer does not want, will soon find themselves looking for a new consumer. This is the market difference between different ‘types’ of consumers.

Homogenous consumers do not exist.

As there is no all-powerful consumer who is supreme, not all consumers are the weak-willed buyers of any crap a business tries to sell them.

We know there are consumers who think. There are consumers who understand they have the power to shape the world they live in through their buying choices.

The 'Ali Baba Effect'

The nature of relationships between buyers and sellers is at the heart of working against modern slavery. The fundamental characteristics of relationships between people give rise to our theory of change. Our theory of change revolves around ‘Circles of Trust’.

It is our working thesis that, with the global expansion of neo-capitalism globally, we have seen local markets and suppliers move morph into burgeoning global supply chains, and with it distance between consumers and retailers, retailers and suppliers, and employers and their workers. Local markets of yore operated on the basis of those involved knowing each other, the products and their provenance. Global neo-capitalism has fragmented those relationships and knowledge. In turn, this has deeply undermined trust between actors. We call this; the ‘Ali Baba Effect’.

In places relatively untouched by globalisation, we see small, close-knit societies where relationships and trust remain strong. This is not a far reach back into western consumerism. There was no slavery in those local markets.

Circles of trust

It is one of our working hypotheses that the breakdown of trust in relationships, and the darkness that has overtaken great swathes of the global supply chains, created space for slaving. Where nobody cares to peer, bad things can happen.

And so, among all the actions being taken by slavefreetrade to end modern slavery in supply chains, you will find the red thread of our theory of change; everything we do is aimed to build, or rebuild, Circles of Trust.

We want ethical consumers to find and connect with, and learn to trust, ethical businesses.

We want ethical retailers to be able to find, connect with, and learn to trust, ethical suppliers.

We want ethical suppliers, as employers, to care sufficiently about their workers’ conditions. And, we want them to learn to communicate and trust each other, and work together to build a better business and better lives for all concerned.

Our BIG

More than many others working to eliminate slavery, we are directly confronting the assumptions about, and realities of, consumer and business behavior. In understanding more about the complexities of slavery, slavefreetrade has established a first-of-a-kind initiative for a non-profit working in this field: our Behavioural Insights Group (BIG). Our BIG comprises great minds from around the world and a broad range of behavioural fields, including: behavioural economics; marketing; psychology; organisational behavior; consumer behavior; public procurement; law; public policy; and criminology. The BIG is our think-tank; pondering and puzzling the big behavioural questions confronting us on our mission to end modern slavery.

We do not pretend to understand all there is to know about why people and businesses make buying decisions that enable or challenge slavery. But we certainly have the means to find out. And one thing we know for sure is that we will cast off the yoke of traditional economic theory about rational beings in the process. Life is just too complex and, for some unlucky souls, too short or torturous for such over-simplification.