Want to help Ukraine? Beware virtue signaling...
Why do we buy stuff? The quick answer is: because we want it. We enter into business transactions to satisfy our own needs and we tend to disregard the seller. A good part of our life- perhaps the most important part of it- is about surrounding ourselves with people we like and appreciate. With these people, we typically entertain relationships that are not akin to market transactions. But, as good ol’ Adam Smith would say, “in civilized society” we stand “at all times in need of the co-operation and assistance of great multitudes,” but our “whole life is scarce sufficient to gain the friendship of a few persons.”
Hence the need to resort to relationships regulated by monetary exchanges and predicated upon the mutual understanding that each of the parts is pursuing her own self-interest:
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages.
For this reason, I am rather suspicious of boycotts and similar forms of putting pressure on businesses. For one thing, most of the time collateral damage is not considered by those advancing such strategies. A few years ago many suggested we should boycott the local franchises of evil multinational companies, for whatever kind of objectionable business practices they engaged in developing countries. The most immediate result of such strategies, when successful, was to cause those franchises to go bankrupt, with many locals losing their jobs. You can argue that the salary of a Milanese is not more important than social justice for Nigerians, but I wonder if you were actually lowering the living standards of the first but increasing the living standards of the latter. Perhaps there were better ways to do something for them (like opening borders and allowing them to search for better jobs elsewhere).
I am also very suspicious of articles such as this by Dana Milbank. He claims that there are “33 companies (as of Wednesday afternoon) that form a “hall of shame,” defying demands that they exit Russia or reduce their activities there.” Hence, “Those who want to stop Russia’s murderous attack against Ukraine should stop investing in or buying the products of these companies.” And then comes a list, from Koch Industries to Subway (“it’s giving Ukrainians the Cold-Cock Combo by refusing to cut loose its 446 Russian franchises.”)
In a free market, to be sure, we are happily free to buy what we want where we prefer for whatever reason we favor. Yet I find the logic behind Milbank’s piece hopelessly flawed. For one thing, why does the fact that these companies are active in Russia mean that they are somehow financing Putin’s war? Among the reprobates, you can find French retailers Decathlon and Leroy Merlin. I wonder how employing Russian cashiers to sell windbreakers in St Petersburg or bricolage items in Moscow is “supporting the war”.
But what I fear the most is the slippery slope. The theme is an old one: you apply the logic of the little group, of the face-to-face society, to larger groups, in this case even to international trade. It is one thing to surround yourself with people you like, quite another to think that you should trade only with people you like and because you like them. Potentially, this is a slippery slope. What about the political preferences of my grocer? What if he is a Trumpian? Should I search for another grocery store? What about the presence of companies in countries that, though they haven’t invaded Ukraine, are equally controversial as Russia? Shall we stop buying at stores of companies that sell to Venezuelans or Iranians, because we do not like their regimes? Is it going to help Venezuelans and Iranians in any possible way?
Or is it a version of secular atonement, a kind of political Lent that we impose upon ourselves, renouncing to stuff that we would otherwise like?
The logic of market transactions is the one so beautifully outlined in those succinct lines by Adam Smith. I understand that people can be very passionate about some causes or strongly dislike some people, hence they do not want to buy stuff from them. There are authors I do not want to profit from me purchasing their books. But most of our transactions are not made of books or movies, that we can somehow neatly associate with their makers, but rather with artifacts which are in itself the result of a complex division of labor. Our market transactions depend on us liking the product and not the producer, and happily so.