Consumer sovereignty

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In economics, consumer sovereignty is the assertion that consumer preferences determine the production of goods and services. The term was coined by William Harold Hutt in his book Economists and the Public (1936).[1]


In a market economy, purchases of goods and services are evidence that demand for those items exists among those with liquid wealth. If potential sellers infer from these transactions that such demand will persist, then they may be motivated to provide the same goods in the future and to compete for future sales by attempting to offer such goods at competitive prices.[2][3]

Some economists believe that consumer sovereignty rarely occurs, because these conditions[clarification needed] are rarely met. Rarely do consumers get what they want; consumers get what they are offered.[4] On the other hand, some economists believe that consumer sovereignty would be realized in a free market economy without interference from government or other non-market institutions.[5]

See also[edit]


  1. ^ Hutt, William H. (March 1940). "The Concept of Consumers' Sovereignty". The Economic Journal (Wiley) 50 (197): 66–77. doi:10.2307/2225739. Retrieved 4 April 2013. 
  2. ^ Scitovsky, Tibor (1962). "On the Principle of Consumers' Sovereignty". American Economic Review 52 (2). Retrieved 11 February 2013. 
  3. ^ Lerner, Abba (1972). "The Economics and Politics of Consumer Sovereignty". American Economic Review 62 (Mar. 1, 1972): 258–266. Retrieved 11 February 2013. 
  4. ^ Commoner, Barry (1991). Anthony B. Wolbarst, ed. The Illusion of Consumer Sovereignty. Smithsonian Institution Press. 
  5. ^ Gonce, Richard A.; Richard A Walker, editor (1988). L. E. von Mises on Consumer Sovereignty. Edward Elgar Publishing Company. pp. 136–146. 

Further reading[edit]