Anger Over VW Is Visceral — And An Anomaly

Since news of Volkswagen’s “cheat device” scandal broke, I’ve been following the reaction of the other drivers of the now-maligned TDI vehicles. I’m not sure what I’m looking for — solidarity? Absolution? As a TDI owner and University at Buffalo researcher who studies corporate responsibility, I, too, have been feeling the visceral anger and disbelief that’s been expressed in so many tweets and op-eds.

But I think the real lesson here is why consumer anger didn’t coalesce in the same way following any number of other recent examples of corporate wrongdoing.

Over a decade ago now, the editors at The Economist magazine claimed, “it is consumers that dictate to companies and ultimately decide their fate, rather than the other way round,” arguing that “Arrogance, greed and hypocrisy are swiftly punished.”

This market populism (to borrow Thomas Frank’s term) would seem to fit the current case. With VW’s stock price plummeting, executives falling and duped consumers out for blood, it’s clear that VW will pay, at least in the short term.

Moreover, observers such as Michael Shrage, writing in the Harvard Business Review this week, argue that the VW case may signal the end of “large-scale corporate deception.” He writes:

As social media, disposable sensors, smarter phones, machine learning platforms, savvy consumer activists, self-quantification and the ‘internet of things’ accelerate into the economic mainstream, betting billions on the stupidity of one’s customers becomes a fool’s errand.

Yet I would argue that the VW case represents the exception rather than the rule. It is the perfect storm: deliberate, direct deception by a company marketing a product based on its eco-credentials — a product which many consumers see as a visible extension of their identity.

By contrast, it is often all too easy to distance ourselves —> Read More