The
New York Times Magazine has
yet another piece from some
would-be central planners behavioral economists who lament their favorite invented crisis, the woe of "too many choices" --
As behavioral scientists, we have found that the people who frame freedom in terms of choice are usually the ones who get to make a lot of choices — that is, middle- and upper-class white Americans (most of our study participants are white; we can't make any claims about other racial and ethnic groups). The education, income and upbringing of these Americans grant them choices about how to live their lives and also encourage them to express their preferences and personalities through the choices they make. Most Americans, however, are not from the college-educated middle and upper classes. Working-class Americans often have fewer resources and experience greater uncertainty and insecurity.
Of course, the fact that the United States is the one place on earth where class matters least and is least likely to endure across generations is conveniently ignored.
A few sentences down:
Social class is difficult to measure — it's a complicated amalgam of education, income and occupational prestige — but in the U.S.'s quasi meritocracy, education has arguably become its most important facet.
Um, no. "Social class is difficult to measure" in America because it doesn't exist. People are upwardly-mobile; people are downwardly-mobile. Children in this country do not automatically inherit their parents' white or blue collars. To the extent that there is any problem with American "quasi meritocracy," it's with the "quasi" part, not the "meritocracy" part.
Anyway, you can see where the authors are going with this — since choice
qua consumerism only matters, we are told, to "some" Americans (i.e., college-educated whites), public policy need not be tailored to it:
Empirical evidence suggests that we should be careful what we wish for. Americans are increasingly overwhelmed by all these choices. We feel less free now than when we had fewer choices, and we show it in our behavior.
Next step: even more highly progressive income taxation, the implementation of consumption taxation, and of course increasingly ubiquitous nanny-statism, all in the name of "saving us from too many choices."
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There is absolutely nothing new in this latest
Times Magazine fluff piece. As evidence, I (re-)submit for your consideration
this post from June 2005 entitled "Toothpaste Shock"?
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There is a group of economists and psychologists, a subset of the growing behavioral finance school, who make an astounding claim: That too many consumer choices can actually make people worse off, and perhaps downright unhappy.
These social scientists argue as follows: All economic decision-making is costly. You must expend time and mental effort evaluating competing alternatives. No one is born knowing "Coke or Pepsi," "sedan or SUV," "Leno or Letterman." You have to figure it out, and that requires an effort.
Now, as the number of additional choices increases, the
Law of Diminishing Marginal Utility may kick in at some point. Having a third choice of beer might be very useful, but is having a
one-hundredth choice of beer equally useful?
The marginal cost of evaluating a new alternative, meanwhile, probably remains constant and possibly increases. So, the theory goes, at some point adding yet another choice results in the marginal cost of evaluating that choice exceeding the marginal utility of having that additional choice and the consumer is worse off.
Every so often a layperson "discovers" this (not very new) theory and decides to write a fluff piece about it. This time it's
toothpaste:
A friend in Seattle...reports a full-scale identity crisis in the toothpaste aisle. There he stood, two coupons in hand. Was he ready to become a rejuvenating-effects, tartar-protection kind of guy, or was he wed to the fight against tobacco stains? And to think it all used to boil down to squeezing from the bottom.
The transformative power is dizzying. The pressure is on; the paralysis sets in. It's like a torture session with a demonic optometrist. If A is better than B, and 2 is better than 3, is A better than 2? How to choose among tartar-control and whitening and breath-enhancing?
...
Is there a name for what I'm experiencing? Of course there is, replies John Quelch, the Harvard Business School consumer marketing guru, who began laughing as soon as he heard the words "toothpaste aisle." He was quick to diagnose "analysis paralysis at the point of sale." Paco Underhill, perhaps our most diligent student of the science of shopping, terms it the "confusion index." And yes, it's growing. As are the fractures among us.
Okay, so that's the theory. Here's my competing theory:
People who can't pick a toothpaste are morons.
The key fallacy underlying this theory is the presumption that there are countless legions of people who suffer from this "analysis paralysis." But if it's such a common phenomenon, then why do we need fluff op-eds in the
New York Times about it? As the saying goes:
"Dog Bites Man" is not a headline;
"Man Bites Dog" is.
Of course, history is replete with central planners who believed that they knew better than Colgate exactly how many brands of toothpaste an economy should provide. Nothing new there.
But there's actually a more insidious reason to tout the "too many choices" theory. Consider this publisher's description of a major work in the "too many choices" field,
Luxury Fever, by Cornell professor Robert Frank (
FULL DISCLOSURE: Frank was my graduate adviser at Cornell):
Ordinary, functional goods are no longer acceptable. Our cars have gotten larger, heavier, and far more expensive. As the super rich set the pace, everyone else spends furiously in a competitive echo of wastefulness. The costs are enormous: we spend more time at work, leaving less time for family and friends, less time for exercise. Most of us have been forced to save less and spend and borrow much more.
Forced? By whom exactly? By our neighbors? By ourselves?
To would-be central planners like Frank, "too many choices" may be a curious quirk at the toothpaste aisle, but when it migrates up to the appliance store, the car dealership or the travel agent, this "fundamental" human incompetence becomes more serious, not only to the individual miserable schmucks who — gasp! — work hard so they can buy stuff, but also to the economy, which degrades into "a competitive echo of wastefulness."
Frank's proposed solution? The same as every other central planner: social engineering, in his case
taxing people "for their own good:"
To protect us from our greedier selves, Frank lobbies for a tax exemption for savings and a progressive consumption tax. If Americans spent less on luxury items, he writes, there would be more money available "to restore our long neglected public infrastructure and repair our tattered social safety net."
Exaggerating, or in some cases manufacturing, human defects is always an essential element of all calls for central planning: If people can't be trusted to make the "correct" decisions, then by definition the market, or the economy, also cannot be "correct." And the enlightened academics, politicians and bureaucrats — who of course never suffer from any defects of their own — call for controls, and always with themselves as the controller.
The more things change, the more they stay the same.
Related Posts (on one page):
- From the Archives: Toothpaste Shock?
- Toothpaste Shock?