Tyler Cowen on boycotts

“Sometimes boycotts are motivated by the wish to hurt other people — the target of the boycott – rather than by desires to help some oppressed group. Or punishing a group’s critics may be the best way to help that group. Then boycotts make more instrumental sense, especially if the target of your hate has a declining MC curve, as would a movie star or music star with an easily reproducible product. There is less point in boycotting someone in a relatively competitive industry, who is earning little on selling extra units of the product.”

“A boycott also might be preferable to sending money if your action has a snowball effect on the behavior of others, but that will not be the general case. In fact boycotts often give more publicity to the person or cause you are trying to oppose. “You opposing X” is not, in the eyes of the world, always a negative signal about X.“

The rest is here.

Now, it’s been a little more than a year since the last time I bought Arla-milk in the supermarket. As for the first part of the quotation, I definitely belong to this category – my intentions with initiating the boycott were simply to hurt Arla’s business as much as possible. I don’t want to trade with people like them, and I don’t want them in the marketplace.

That said; when it comes to Cowen’s post two more things to consider:

1) I’d say most people don’t really care all that much if the personal boycott on net harms the company in question or not. Fair-trade goods, with the opposite signs attached, belong to this category as well. Boycotts and similar emotional stances in the marketplace are largely driven by emotions rather than rationality. By intentions rather than consequenses. Cowen can point out all the rationality-inspired consequentialist arguments against these ‘moral stances’ he wants, I will still feel good about not buying anything from those bastards – and what do I care if some non-observed transmission mechanism neutralizes the actual intended effect of my purchasing behaviour? My decision to boycott is already invisible when you look at the big picture – if Arla’s folks look at the data, my purchasing decisions will be indistinguishable from random noise anyway. Point is, if you already have chosen, or you are about to choose to boycott something, you are not likely to change your mind because of a consequentialist argument that pushes the marginal effect of the (potential) boycott a little ‘to the left or right’. So summarizing the rational economic pros and cons is not likely to change all that much out here in the real world. You might be able to use the analysis ex post to estimate how inefficient the boycotts are, but what would you do with the results?

2) Even so, boycotts are sometimes more effective than TC would have us believe because of omitted variables in the analysis. The alternative to not buying a product from a company with a large degree of market power is not necessarily not to buy anything at all. Cowen knows this, but he should have included this fact in the blogpost. If you buy the competitor’s products this hurts the monopolist two-fold: His own revenue goes down due to lower sales, and his margin shrinks due to increased competition.
I like to think that this is what I have been doing for the last year. If not – well, a) I like to know when I’m wrong about something of course, but b) I doubt I would regret the boycott even if the consequenses were different from what I had intended them to be.