Catchy term for the concept, popular among neoliberal
economists and advocates of a laissez-faire economic milieu, that people, through their economic interactions, most often consumer
behavior, affect the direction of society in a ‘democratic’ way. It is often maintained that this supposed economic participation is more effective and even more democratic than political participation. For instance, in deciding en masse to buy a certain type of music, consumers alter the direction of art and culture in a way that public programs, with their large-scale grants, seem unable to.
The idea is often taken even further, supposing that explicit public goods can be achieved through this sort of economic participation. Advocates might state that if people were unhappy with a corporation’s unethical practices, they could simply boycott the products and affect a change in that corporation’s behavior, rather than relying on government regulation. As another example, if society wanted to encourage the development of alternative energy sources, people can make this known through their investments in certain companies, rather than through proposed government subsidies.1
However, the ‘voting with dollars’ idea breaks down in the real world, and is exposed for the fraud that it is, which is simply an attempt to justify or cloak the ever increasing stranglehold of corporations on the economic and cultural life of society, and the ever decreasing power of real public participation. For one thing, the ‘voting with dollars’ concept relies on accurate and relevant information being available to the public, something that is simply not the case when the media is a tool of big business, and public discourse is rigged in the way that it is. For another thing, there is the obvious problem that a wealthy person or region gets to ‘vote’ many times over compared to a poorer person or region.
But the major flaw, and one that is often not cited, is that not everyone even gets a vote. As an example, suppose the question before us is what to do with a certain patch of forest. Well, if we are voting with our dollars, then the people who want the forest turned into newspaper get a vote, and so do the people who want the forest turned into furniture, and so do the people who want the forest left in place for an exclusive spa resort - but as for the many people who want the forest left in place so it can be a quiet and untouched place to camp and contemplate nature, we don’t get a vote at all! The problem is that our needs, as is the case with many human needs, do not correspond to an economic interaction. Now if we were actually voting in a fair political system, then yes, all of the above parties would get a vote, but that it just not the case when our participation is limited to the economic sphere.
So, whenever someone encourages you to vote with your dollars, be sure to remember that you still need to vote with your ballot, and your feet, and your voice, and your pen.
Of course neoliberals always seem to forget this aversion to government largesse when it comes to de-subsidizing
oil companies (or whatever industry they happen to be working for).