The Impact of Trading Standards law on society

I work part-time in a store that sells thousands of products and has hundreds of promotions and special offers constantly on the go. Every couple of weeks these promotions are changed and part of our job is to swap out the current promotional materials and price tickets for the new lot. This is often a lengthy process and so sometimes we begin the changeover in certain sections before the store has closed. For example, the strips of card detailing the new offers are put in place, but put behind the current set or turned backwards so they cannot be read by customers.

A couple of days ago one of my colleagues, in the process of doing this, forgot to turn around a strip detailing a new offer that didn’t start until the next day. Unfortunately a customer saw this offer, which was of the ‘buy X and get Y for free’ kind, picked up the requisite items and came to the checkout. When the customer saw that she was being charged for the second item she queried it. At that point my colleague understood that the customer’s decision to make her purchase was based on information which wasn’t incorrect per se, but was premature and therefore not yet applicable. My colleague realised her mistake and explained what had happened. She apologised and told the customer that she would overwrite the price on the second item so that she would get it free of charge – as advertised and as expected. Mistake rectified. Problem solved. The customer would get exactly what she thought she was getting and would go away happy. Well, that’s what sometimes happens, but this time this customer dropped the ‘L bomb’. As she picked up her bag she reprimanded my colleague in a wounded tone:

“You know, legally, you’re not allowed to…”

“Yes, I know, I’m very sorry about that” replied my colleague rather sheepishly.

I grimaced, but did my best to make it look like a smile. In my mind, however, I was taking issue with this person’s implied threat.

“Madam, please don’t point the law in our faces like it’s a loaded weapon. Are we criminals? What crime have we committed against your person or property such that your threatening us with force by a third-party is justified? We don’t deny we gave you misleading information, but this was the result of an unintentional act of oversight on the part of my colleague rather than a deliberate attempt to deceive you into buying something. Even if it was deliberate, the fact remains that you still had the freedom to refuse to purchase it at the checkout, having become aware that we were not, at this time, giving it away as a free gift.

The fact that we are a highly respected company that has been operating for over a century and a half suggests that we aren’t in the habit of trying to bilk our customers out of money at every opportunity. We gladly rectified our mistake and you are not worse off as a result of our doing business. You have got exactly what you expected to get out of our exchange, which you could have abandoned at any time had you not been entirely happy to proceed. In fact, we are the ones who have got less out of the exchange than we expected as a result of our mistake, which is one of the reasons why we do as much as humanly possible to avoid such mistakes. But we are only human and we do make mistakes. The main reason, however, that it is in our interest to avoid making mistakes is because making them harms our reputation, and we care a great deal about our reputation. Which means we have to care about pleasing people like you. If we didn’t, then my colleague would simply have told you that the offer advertised does not start until tomorrow and left you disappointed. The fact that she didn’t do that, however, reveals that we care more about making sure you go away happy and return to shop with us again than making a quick buck or making our own lives easier.

Even if we had refused to give you what we mistakenly led you to believe you were going to get this still wouldn’t make us criminals; it would just be rather mean-spirited.

As for using the legality of an action to determine its morality, this is a most unwise habit that leads to ethically disastrous conclusions. It is true that our mistake of providing information about a promotion not yet available is ‘illegal’ according to Trading Standards legislation and probably would be classed as “bait advertising”, but as I have just demonstrated it would be absurd to class our actions in this instance as a crime because we have not harmed your person or property in any way nor engaged in implicit theft. You gained exactly what you expected to gain from our exchange.

If you truly believe that legality alone establishes morality and wish to have integrity then you cannot disagree with anyone who says that Nazism, slavery or apartheid were morally acceptable actions because all were perfectly legal systems. Legality as morality backs one into a corner from which escape is impossible without renouncing one’s position.”

Defining non-criminal actions as crimes

It is a disturbing fact of today’s increasingly authoritarian society that if this customer reports her experience with us to Trading Standards, then my employer could be forced to hand over a sum of money to a local trading standards officer as ‘punishment’ for our ‘crime’. Fines are by no means the limit of the powers of the Trading Standards officers, either. They have the legal right to enter a business’s premises at all reasonable times (refusal of entry can be considered a criminal offence), and can cease and retain goods and documents. People go to prison, too, for violating Trading Standards rules.

For example, earlier this year a man was sentenced to ten months in prison after West Yorkshire Trading Standards officers, posing as customers, bought “pirated” DVD movies from his store. No doubt they were very happy with themselves for ridding society of such a vile and dangerous criminal. Certainly their superiors at the local council were because the details of this bust (and others) were listed on its website in a most self-satisfactory manner.

Such disproportionate use of force to punish non-violent crimes at the behest of special interest groups has become a hallmark of the modern authoritarian State. At worst, and accepting for the sake of argument that making copies of someone’s property is a crime against them, the proper recourse would be for the individuals harmed to seek restitution. Imprisoning a man for ten months is monstrous, not to mention very costly to tax payers. It’s incredible to think that inhuman acts like this happen in what appears to the rest of the world to be a peaceful and enlightened society. In a stateless society, if a shopkeeper shot dead a child for stealing a packet of crisps he would almost certainly incur the wrath of the moral outrage of his community and would probably have to leave town lest he suffered the same fate. In today’s world, people politely applaud throwing someone in a prison, where he might well be raped, beaten or otherwise suffer immense psychological trauma, for copying and selling DVDs to people who wanted to buy them. When this man returns to society with what is likely to be a traumatised mind he will find himself branded a criminal, of course, and will find it much more difficult to earn a living and support what family he has. Thus rendering him more likely to return to copying and selling DVDs or even resort to actual crime.

Using disproportionate force against people for non-violent crimes is bad enough, but using force at all against people for non-criminal actions is even worse. None of the 31 banned practices under the Consumer Protection from Unfair Trading Regulations (2008) can defined as crimes according to reason or logic. Meaning they are not actions that harm or damage someone’s person or property or prevent them from using it peacefully as they wish. They are instead all varying degrees of intentionally dishonest or unintentionally misleading practices, which perhaps we would all prefer didn’t happen, but which in themselves do not result in harm to person or property and therefore are not actions that may justifiably be prevented with the use of force. In short, they are preferences.

Overall, there are only three practices of the 152 banned under Trading Standards legislation that are criminal actions proper, which it would be justified to use force to prevent or to seek restitution for. These are: not being given the prize you won in a competition you paid to enter (implicit theft); not being allowed to leave the premises without buying something (violating your property rights in your body by preventing you from using it as you wish); and a door to door salesman refusing to leave your premises (a violation of property rights).

Trading Standards legislation, from an ethical perspective, is almost exclusively the use of force to prevent and punish non-criminal actions. It is, quite simply, an unjustified use of force. But its legality makes it appear to be justified. After all, as far as most people today are concerned, what is legal is morally justified and what is illegal is immoral.

If I was to declare that anyone who points their finger at me is a criminal and therefore I am justified in using force against anyone who does so, then no one would hesitate to declare such a proposition as absurd and me as psychopathic or mad. But the act of pointing a finger is no more a ‘crime’ than all but three of the 152 behaviours banned as ‘criminal’ under Trading Standards law and legislation, and yet people think that this is perfectly sane and reasonable.

Trading Standards law lowers the quality of our interactions

The existence of Trading Standards law and legislation leads people to believe that they have certain positive rights as consumers. The TSI effectively tells people that that it’s their ‘right’ to live in a world where no one gives them incorrect or incomplete information, intentionally or otherwise, about a product or service before money has even changed hands – and therefore in a way that doesn’t result in implicit theft. You have these ‘rights’, says the TSI, and we are the knights in white shining armour who will enforce them on your behalf.

The effect of all this on everyday life, in my experience, is that customers often adopt an incongruous victim mentality because they wrongly believe that we have harmed them to a degree equivalent to that of a mugger taking their wallet by, say, not having the correct price on one of our products. This often leads to customers being less cooperative and more inclined to being hostile. They don’t stop themselves from getting angry or being rude because they feel their behaviour is justified. But it’s not, of course, and so this leads people like my colleagues and I to feel defensive and resentful – although we do our utmost not to show it. In the end what would have otherwise been a situation resolved pleasantly through negotiation, empathy and understanding is poisoned with the hostility of misplaced entitlement and feelings of victimisation.

The fundamental flaw with positive rights and what makes them undesirable for society is that the only way to ensure that your positive rights are not being violated is to violate the person and property of others (e.g. for trading standards officers to threaten businesses with fines and imprisonment). In short, it is a moral principle that necessitates immoral action. Which means it achieves the exact opposite of the intended outcome of a moral principle, and therefore leads to more violence instead of less.

The thing is, if you understand that positive rights is an irrational ethical concept and in reality leads to a less peaceful society, and understand that the vast majority of people who sell goods and services aren’t vultures or predators but value-adders and providers, then you cannot believe in the morality, necessity or social good of Trading Standards laws and legislation.

In its promotional material the Trading Standards Institute asks the reader:

 “Whose job is it to safeguard the economic well-being and health of people day in and day out?”

In other words who, besides you, has incentive to protect (in other words, not harm) your economic well-being and health? The short answer, contrary to what the TSI is implying here, is anyone and everyone who wants to do repeated business with you (which is a lot of people when you think about it). That’s whose job it is.

In a society of free market capitalism, there’s a plethora of people willing to help protect your economic well-being and health in both a professional and amateur capacity, and for free and in exchange for money. Insurance companies, doctors, solicitors, lawyers, financial advisers, personal trainers, dietitians and the countless number of people and organisations offering advice on the web. Indeed, my employer has an on-line health portal which provides for free a wealth of high quality information and expert advice on healthcare, diet and medical problems.

However, I’m not quite sure that this is really what the TSI is getting at by asking this question. I think what it is really asking is who is going to ‘protect’ you from products with incorrect or missing prices, information about products or outright lies? In other words who is going to prevent these things from happening? Well, in a society that fully respects individual liberty, no one – hopefully. Because, as previously noted, prevention would require giving a group of people legal powers to take money from businesses under threat of government force and to imprison people.

Imagine if, tomorrow, the TSI and its legal powers ceased to exist. Would my colleagues and I suddenly lose all incentive to be honest with our customers, to do our best to provide accurate information and prices, and to ensure our products are safe for use and consumption? Of course not. Would the consequences of behaving in these ways cease to happen? Impossible. We maintain these standards not because people threaten to steal money from us or imprison us if we don’t, but because our customers want us to; and the better we are at giving our customers what they want the more profit we make as a store. This fact is why our manager demands that we work to certain standards and according to procedures based on best practice. Our standards of behaviour result directly from the fact that our ongoing existence as a business depends entirely upon not harming but improving the economic well-being and health of our customers as much as we can.

Trading standards emerge spontaneously because we value them

My employer, being as old as it is, was doing honest business and selling good quality products long before any kind of government agency enforcing trading standards even existed. During that period of thirty years or so mistakes like we make today were undoubtedly made (probably many more given that they didn’t have computerised systems back then); information about a product was wrong every now and then, a price was wrong, a customer was mislead. But there was no government agency to ‘protect’ consumers from these behaviours, so how did consumers survive in this state of anarchy? How did they avoid having their economic well-being and health harmed? Well, they must have rated companies like my employer based on their own experiences and those of people they knew, generally avoiding those businesses that they had bad experiences with or which didn’t have a good reputation. In short, they judged each provider of goods and services by their own unique set of ‘trading standards’ – and as consumers acted accordingly. In order to remain profitable, every business had to adapt its behaviour to meet a general standard (expressed through each individual consuming according to his own standards) better than his rivals.

Every consumer who is happy to trade at standards lower than those set by the TSI is prevented from acquiring goods and services from the vendors they are happy to trade with; and thus is worse off. Every consumer who has higher standards than those of the TSI is also worse off because each vendor and service provider has less time and resources to direct towards meeting their standards. That lost value for customers is the unseen economic consequence of Trading Standards law and legislation. The only people who aren’t worse off are those consumers whose standards roughly align with those enforced by the TSI. But if this is the majority of consumers, then every reasonably mature business opening for trade on the high street today – from market stall holder to multinational corporation – must be meeting those standards, otherwise they wouldn’t exist because they would have become unprofitable. Ergo, Trading Standards is at best redundant and at worst harmful to consumers. Factor in the cost of paying people to enforce Trading Standards law and to prosecute and imprison people for breaking those laws, and we have one expensive redundancy; one which breeds resentment on the part of people like my colleagues and I who are fairly regularly threatened with ‘trading standards’ like it’s a blunt instrument.

It’s not that trading according to a set of standards is a bad idea per se, it’s not. It’s a very wise thing to do because doing so leads to being trusted and to having a good reputation. And those are priceless in market societies – as my employer well knows – because people do repeat business with the retailers they trust and like the most; which means the better ones stay in business and the lesser ones don’t.

The best way to achieve the state of affairs which the TSI claims to want to is for every individual, as consumer, to be free to determine themselves the standards they wish to trade to according to their own experiences, knowledge and preferences. If they are, then it follows that every producer/seller must align their actions according to those standards or face being put out of business by competitors who have done this more successfully. This process of alignment is continuous and can never cease on the part of the producer/seller. By forcibly placing itself in between sellers and buyers, the TSI impedes and distorts the signals from the latter to the former regarding the standards they are happy to trade at. Businesses become preoccupied with meeting the standards of the TSI, which may or may bear some relation to those of their actual customers, because the costs of failing to do so are potentially so high, and therefore have less time and resources to adapt their behaviour according to the standards being effectively expressed to them by their customers through profit and loss.

If the Trading Standards Institute was a governing body that businesses could voluntary sign up to be assessed and regulated by, then there could be no ethical argument against its existence. But it isn’t, and so there is. If it didn’t achieve virtually the opposite of its intended goal, then there could be no economic/social argument against it. But it does, and so there is.

Individual economic freedom

Britain was a very different place back in the late 19th century when the company I work for was founded. The State abandoned mercantilism in 1840 and free trade was allowed to flourish in a way never experienced by the masses before (and arguably since). Britain was already creating wealth at unprecedented levels as a result of the industrial revolution which began in the late 18th century and this progress continued. GDP increased by an astonishing 410% between 1830 and 1900, and wages more than doubled between 1800 and 1850. Around half of the population in the 18th century lived in poverty, but this reduced to a quarter by the end of the 19th century. Millions of people were able to lift themselves out of poverty in the 19th century in Britain as a result of capitalism. The key to this astonishing progress was the unprecedented economic freedom for individuals.

Fast forward a century and a half or so and our prosperity is becoming increasingly precarious. The economy is stagnating, poverty is increasing and the State is crushing society under the weight of its debts. All the result of the slow and steady erosion of the very thing that was the catalyst of the staggering increase in the standard of living in the 19th century, individual economic freedom, as the State in the 20th century became an increasingly appealing tool to highly educated and influencing people so filled with hubris that they believed not only that it was possible to plan society for the betterment of all, but also that it was their moral duty to.

No one wants to return to the standard of living of the 19th century (a huge improvement though it was over the previous), but a return to that level of individual economic freedom and size of government would certainly be as welcome as every one of our thousands of customers whose lives we make a little better every day; even if some of them do think they’re entitled to control our behaviour by government force.

And that’s really the point. As long as people continue to believe that they’re entitled to control other people’s behaviour through government coercion in order to enforce preferences sold to them as ‘rights’ by institutes like the TSI, the more pervasive and powerful the government must get. The bigger the government gets the less economic freedom we have. The less freedom we have the less wealth we will create.

It’s quite peculiar, when you think about it. We live in societies brimming with the most incredible technological and scientific advancements, and yet they are governed by institutions so primitively violent that they appear ridiculous. It’s like having a Ferrari, but fitting the engine of the first Ford motorcar in it because it makes us feel safe. We have awesome potential. We just need the right engine and our progress will be rapid. The engine is the absolute freedom for individuals to act peacefully in pursuit of their own goals by using all their property as they wish; the engine is liberty.

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