Economic Tools for a Consumer

• The average consumer has a variety of tools at his disposal. Robert Kirk/Photodisc/Getty Images

  As a consumer, you have tools at your disposal to improve your well-being and wealth. Given the complexity of the modern economic system, a complete listing of these tools would be extensive. There are three main areas, however, that can be explained to give you a better picture.

Currency

• Perhaps the greatest tool that a consumer has is the basic currency that floats between his hands every day. A stable money supply is the best method that a society has of exchanging information between different and diverse individuals. The exchange of money allows consumers to express their preference of goods to suppliers, ensuring that higher-valued goods will be in greater supply. Money is also a way of receiving economic reward.

Banking System

• The banking system is something of a two-edged sword for the average consumer. It provides a necessary service in providing consumers with credit and a place to save their money. However, taking out loans from banks can be dangerous for average consumers, causing them to go into debt. Saving money is always preferable to borrowing.

Government

• If a consumer in a capitalist system is lucky enough to also live in a country with a democratic government, she has a powerful tool at her disposal. Government regulation can prevent the abuses of large firms and companies, and the private-sector services can be augmented by the public. Governments may also be influenced through the political system to adopt policies that work on behalf of consumers.