The public sector as a market: Aggregating the demands of citizens

Vote Saakashvili

Markets, and marketing, help bring consumers and producers together. In this sense, markets and marketing can be said to aggregate the demands of consumers into a focused or structured group, so that producers can easily serve them. Does this same mechanism apply to public and social goods that we, as citizens, want to consume? And if so, does this market function?

In his book SuperCapitalism, Robert Reich, former Secretary of Labor and currently a professor at University of California at Berkeley, contrasts our demands as consumers on the one hand and citizens on the other. As consumers, we may love the low prices that Walmart offers. As citizens, we may worry about the impact Walmart’s low wages have on our communities and fellow citizens.

Walmart can offer those low prices in part because they’ve done such a good job of aggregating the demands of millions of consumers. That audience of millions gives Walmart leverage to drive down the costs of producers who want access to Walmart’s market. We as consumers can then get what we want, even if it’s something we as citizens don’t think is beneficial in the long run.

Looking through a marketing lens, government and the public sector appears to be an aggregator for the demands of citizens. We create communities and political and social structures in part to aggregate the group’s demand for the goods and services that we couldn’t get as individuals. This aligns with my assertion that we are social beings, living together because it makes us better individually and collectively.

Reich argues, and it’s not hard to see, that we as consumers get much more of what we want compared to we as citizens. Walmart prices continue to decline. Material goods and personal services continue to innovate, improve, and grow more affordable. Government, on the other hand, often seems mired in the past and ineffective at meeting social needs.

How can we make our society better at meeting our citizen demands? I think we have to be more active and conscious about aggregating our demands as citizens. How can we better aggregate our demand? Here’s some ways:

  • Vote. This is the mechanism built in to democracy for expressing and aggregating the demands of citizens into an actionable market.
  • Communicate with your local representative. Maybe it’s no coincidence that sales professionals and legislators share the same title: representative. Tell your rep what you want. DemocracyOS is one innovative way that people are communicating with their government representative. Change.org is another possibility.
  • Participate in groups that share your demands. This could be political parties or churches or non-profits or civic organizations. Just as Walmart’s suppliers find larger audiences more lucrative, government representatives find larger audiences of citizens and votes more appealing.

I must confess, I’m only one-for-three on this list. Sure I vote, and even occasionally donate money to political candidates and causes. But I’m not a joiner. Reich’s point about aggregating demand has me rethinking my ways.

How do you let the market know your demands as a citizen?

(SuperCapitalism and other books mentioned in this blog are available in the bookstore.)

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