pageok
pageok
pageok
Do Markets Give Us Too Many Choices?

Lately, it has become common for critics of free markets to argue that they give us too many choices, and making all those decisions is too burdensome. Barry Schwartz's book The Paradox of Choice is the best-known defense of this argument. Tyler Cowen links to a good statement of it by Megan of the From the Archives blog:

This is the other thing I don't get about small government types. You protest so vociferously that government takes choices away from you. But a whole lot of choices are BORING. If I never once think about car bumper safety standards for 25mph crashes, I will never miss it. I do not want to carefully match my car safety standards to my most likely driving patterns and save two grand in the process. I would not enjoy that process. (Perhaps you would, and you would rather have the money.) I've never been a comparison shopper or a meticulous consumer. Maybe my model of the individual is too biased by my experience. But I don't want to figure out how much coliform bacteria I can tolerate on my spinach, given my health. I don't want to do that even if it saves me money. I don't want to figure out what goes into paint in nephews' toys. I don't even want to handle my health care.....

I can hear you already: "But you are FORCING me to take that deal too.". Yes. But right now our system FORCES me to comparison shop. Either way, someone gets FORCED to do something, and I don't see a justice interest on one side or the other....

There are several flaws in this argument. First, the market does not in fact "force" anyone to do "comparison shopping." If you genuinely don't care much about the price or quality of a particular product, you can simply choose at random from the options on sale. In that scenario, you can still benefit from the comparison shopping efforts of consumers who care more than you do, since most manufacturers will cater to the preferences of the better-informed consumers at least to some substantial degree.

Second, if you do care, but simply don't want to take the time and effort to choose intelligently, the market again provides solutions for the problem. You can 1) rely on the advice of better-informed friends and acquiantances, 2) use one of the many consumer publications (e.g. - Consumer Reports) that summarize product information in an easy to use format, or 3) pay an expert to make your decisions for you. Megan herself seems to approve of this third option:

People talk about being rational health care consumers, but they are maximizing some combination of health outcomes and money. I want to maximize my utility. My utility is optimized by going outside to play while someone who is interested in health care gets paid to balance my health care and money. I'll pay a little extra to cover that person. I come out well ahead in that deal.

Of course, if I interpret Megan correctly, she means that she would like to pay government regulators to impose decisions on everyone rather than to hire a private sector expert on her own initiative; otherwise, her argument would not be a criticism of "small government types." But a key advantage of the market over government is that you get to choose when you want to rely on experts, and which ones you want to hire. This gives the experts much stronger incentives to do what you really want, and also reserves to you the vital right to reject their advice at the end of the day - points I discussed in greater detail in my post on "Power to the Experts."

Finally, Megan's argument (and Schwartz's more sophisticated version) don't adequately consider the important fact that people differ from each other on what products and product attributes they care about. Choices that she and I would consider "BORING" or unimportant are intensely interesting and significant to others. In the market, people can choose for themselves which choices they want to study in detail, which ones they are willing to make more or less randomly, and which ones they prefer to delegate to an expert. With a mandatory government solution, we will at best get the menu of choices that the majority of voters consider appropriate - a result that will be deeply unsatisfactory to many who have minority preferences. At worst, the menu will be dictated by narrow interest groups that manage to capture the regulatory process and use it for their own benefit. Even "boring" choices that I have to make myself are preferable to that.

Jack S. (mail) (www):
Megan makes a very weak argument indeed starting nearly every sentence with I (and when not only preceded by a But or If). Sounds more like whining to me rather than making a well supported and/or reasoned assertion.

Moreover her products used as examples are poor since they generally related to public safety (result from the annals of tort litigation for the most part) and not does this gizmo have 1GB or 2GB for example.

I'm sure they're may be some colorable argument for no choice (see e.g. your local telephone company's briefs to the FCC), but hard to defend in the face of reality.
9.9.2007 5:19am
TJ (mail):
Dear Megan

Your laziness does not justify restricting my freedom.

Yours etc.
9.9.2007 6:38am
Duffy Pratt (mail):
Coke, Classic Coke, Caffeine Free Coke, Coke with Vitamins, Vanilla Coke, Cherry Coke, Cherry Vanilla Coke, Diet Coke, Coke Zero, Diet Coke with Splenda, Caffeine Free Diet Coke, etc... And Pepsi has basically a mirror for all the same. For some things, a little less choice might be nice.
9.9.2007 6:40am
JB:
In defense of Schwartz, he explains the paradox of choice so readers can take advantage of it in personal and professional settings, and understand its effects, but doesn't make politically normative arguments like this.
9.9.2007 7:29am
American Psikhushka (mail) (www):
Duffy Pratt-

Coke, Classic Coke, Caffeine Free Coke, Coke with Vitamins, Vanilla Coke, Cherry Coke, Cherry Vanilla Coke, Diet Coke, Coke Zero, Diet Coke with Splenda, Caffeine Free Diet Coke, etc... And Pepsi has basically a mirror for all the same. For some things, a little less choice might be nice.

Why? If none of the variations interest you why would you want to cut down on the freedom of choice of others? Coke somehow profits from the multiple variations, otherwise it wouldn't produce them for long.
9.9.2007 7:48am
veteran:
Choice can be frustrating at times but I don't use "everything" so that, in itself, narrows the field.

I like choice. It is like "free will". "I" can succeed or fail on my own rather than at the hands of someone else.

I remember years of Ma Bell, there was no choice, no service, no customer service, etc.

I think Megan, if she reaches maturity, will see the advantage of choice.
9.9.2007 8:26am
FantasiaWHT:
This IMMEDIATLEY reminded me of a brilliant Calvin &Hobbes cartoon where Calvin's dad is in a supermarket shopping for peanut butter and goes, to use the vernacular, ape-doody at the massive number of choices facing him.

I think it's a natural reaction to be overcome in the face of too many choices, but you are right, the criticism does not bear out a more reasoned analysis.
9.9.2007 8:43am
sashal (mail):
off topic, Ilyusha.
I had a conversation with a friend of mine about surveillance , the 4th amendment and Elliot Spitzer.
My friend claims that Spitzer broke that amendment, that he subpenaed business documents without the court warrants etc, etc.
Can anybody help me out here?
Is that true?
9.9.2007 9:21am
Flash Gordon (mail):
Megan's problem is her mental laziness in all endeavors other than complaining.
9.9.2007 9:33am
h2odragon (mail) (www):
This makes me wince: "our system FORCES me to comparison shop" ...

Well, yes, it does; it forces you to take responsibility for your own choices, by failing to offer nothing but that most suited to your taste / needs / whatever.

When someone casts blame for a condition that still exists in the absence of any actor but themseleves... Is it so hard for them to see the illogic?
9.9.2007 9:40am
Bottomfish (mail):
When we do want information, most of us must rely on the media. Not too helpful. When did the media tell us that the problem of dangerous coliform bacteria on raw spinach was due to organic farming methods?
9.9.2007 9:55am
loki13 (mail):
I have two quick comments:

1. Never knew so many Volokh regulars were pro-choice. Go figure.

2. While Ilya manages to selectively quote a (somewhat) clueless proponent of the theory in order to assert superiority of the classic libertarian/free market/Clint Eastwood/U Chicago mindset, he overlooks very important things.

I think everyone can agree that *in theory* more choices is always better than fewer choices. I would also agree that if I was perfectly rational, had access to all information, and existed in a place of no transaction costs (pursuing Consumer Reports took no time), then that would be really friggin' awesome.

Of course, what many behavioral economists have shown recently is that in the real world, more choices is not always a good thing. Why? People are not perfectly (are even somewhat) rational. People do not have access to all information. Transaction costs (esp. in terms of time) are high.

Does this mean 'the gummint' should make all of our choices for us? No. Does it mean that if, as a social policy, we want to encourage saving, we should have a 'default' basket of 401Ks (that some could opt out of)? Sure. Can it inform a supermarket's jam purchaser (while letting a smaller, specialty chain cash in on the Boysenberry lovers)? Perhaps. Might it inform our health care debate? Most certainly.

Choice is good. 'Cept when it ain't. And attacking this post to make your point, Prof. Somin? That... was a choice. *grin*
9.9.2007 10:40am
J. F. Thomas (mail):
Why? If none of the variations interest you why would you want to cut down on the freedom of choice of others?

25 different flavors of Coke, or 50 different styles of Nike, are not really choice, they are the illusion of choice, as they are all produced by the same company. The real choice is between Coke and Pepsi. So it really isn't as wide as it first appears--and there is probably less true "choice" in soft drinks, on a nationwide basis, than there was fifty years ago.

As for the complaints about the bad old days of Ma Bell, we are rapidly returning to those days. But this time around we won't have government oversight of the duopoly that will be the end result of the merger craze in telecommunications.
9.9.2007 10:43am
Some Mathematician (mail):
I like to choose individual components and operating systems that go into my computer.

On the other hand, my mom wants someone else to make those choices for her. The only choice she wants to make is the color.

Luckily, she just went to www.dell.gov and the government made the boring choice for her.
9.9.2007 10:43am
Steve2:

25 different flavors of Coke, or 50 different styles of Nike, are not really choice, they are the illusion of choice, as they are all produced by the same company.


What bothers me is that they do seem like choice, but unnecessary and undeserved choice since they seem like a waste of resources: design, marketing, manufacturing, etc., to give redundant options.

Basically, if you present people with the choice of "Barefoot or Shod", then only one shoe need be designed, built, etc. for the entire world. Or, you can present them with the choice of what functional type of shoe. Then, you only need to consume resources to design one global sandal, one steel-toed workboot for the whole world, one running shoe, etc. Currently, multiple companies make multiple models of multiple types of shoe (which are then sold in multiple stores).

And what I don't understand, since noone's ever tried to explain it to me, is why so many people take it for granted that consumer choice is important enough to justify the redundancy in the current world and make it preferable to the "Only one of each type" scenario. Do I really have a right to choose between products that do the same thing, instead of just a right to having that thing done?
9.9.2007 11:25am
Dr. Weevil (mail) (www):
I don't know where J. F. Thomas lives, but here in North Carolina there are far more choices for fizzy beverages than just Coke and Pepsi products. There are plenty of local or regional or international products in every grocery store, and I've drunk at least five different companies' products just in the last month, without drinking anything made by (ugh!) Pepsico. Besides Classic Coke, my usual drink, these include:

1. Cheerwine, a local brand which tastes like a cross between Cherry Coke and Dr. Pepper. I didn't care for it, and won't be buying it again, though I did finish the 1/2 gallon bottle. Worth trying once.

2. Stewart's Key Lime soda, a favorite.

3. Jones Green Apple Soda, another favorite, still made with cane sugar. (The 6th-graders I taught last year called it "alien blood" -- very green and fizzy.)

4. Target brand imported Italian Blood Orange Soda, good over ice or in an orange float. The Lemon is even better, but apparently everyone else thinks so, too, since Target has trouble keeping it in stock and I haven't managed to get hold of any lately.

Of course, even within Coke and Pepsi, there is a great deal of real choice. As far as I'm concerned, Classic Coke is excellent, and (e.g.) Vanilla Coke is revolting.

Like most Americans, I save time and effort by thinking about things I care about (books, CDs, DVDs, liquor, most foods) and not bothering with things that make no difference. For (e.g.) toothpaste, mayonnaise, vinegar, sponges, dishwasher soap, and paper towels I buy whatever's on sale, or the house brand, whichever is cheaper. Thanks to the price-per-ounce labels on the shelves, it takes very little time to figure out which is cheapest. Doesn't everyone shop this way?

Of course, health insurance is another thing entirely, since the small print may make a huge difference in what exactly is covered, and how fully. But how often do we have to worry about which health insurance (or car, or house, or stock) to buy?
9.9.2007 11:39am
Montie (mail):

25 different flavors of Coke, or 50 different styles of Nike, are not really choice, they are the illusion of choice, as they are all produced by the same company.


Or it could be a simple demonstration economies of scope.
9.9.2007 11:45am
liberty (mail) (www):
Steve2,

Not sure if you're kidding. But, if you're not, you can move to North Korea where Their Great Leader will happily provide you one global shoe.

No redundancy, or wasteful competition or difficult choice.
9.9.2007 11:45am
Truth Seeker:
Steve2, China did the same with clothes. Everyone wore the same blue Mao uniform. Lovely society, that.
9.9.2007 12:03pm
Truth Seeker:
25 different flavors of Coke, or 50 different styles of Nike, are not really choice, they are the illusion of choice, as they are all produced by the same company. The real choice is between Coke and Pepsi.

If your whole life revolves around economic activism then you only care about if you are buying Coke or Pepsi.

But most people either want a cola or a cherry cola or a diet cola, etc. They DON'T CARE if one company makes them all or of 20 little union shops make them.
9.9.2007 12:15pm
loki13 (mail):
Our choices are either:

1. All choices.
2. No choices.

We'll call this the Vanilla Coke v. North Korea dichotomy. Unfortunately, this is a false dichotomy brought out by the poor framing of the issue in the original post.

Instead of arguing from ideology (Commies v. Friedman), let's agree that neither extreme is feasible. I don't believe that anyone would think that all decisions should be made for them. OTOH, empirical evidence has shown that we are spectacularly ill-equipped to make good choices in some situations, and that transaction costs (time and money) and information asymmetry mean that problems (yes, problems) of choice are particularly acute in some situations.

Having some regulation (a minimum safety requirement for food products) is generally considered to be a good thing, as most people don't have the time to research every single food purchase they make, and in today's distributed economy, cannot depend on community trust relationships. Complex financial transactions (retirement, health insurance) are also problematic when it comes to issues of choice, as empirical evidence has shown that most people are spectacularly ill-equipped to handle these issues.

In short, the issues and economics of choice are a little more complicated than the OP would let you believe, and there are solutions in between the nanny-state and a Darwinian free-for-all.

Perhaps there is a hostility here because Prof. Somin is against libertarian paternalism, but if that is the real target, this is a poor, um, choice.
9.9.2007 12:18pm
liberty (mail) (www):
loki13,

You have traded one false dichotomy for another. We needn't choose between having to gather and analyze all information about these choices ourselves, and having government do it for us. As many have pointed out, there are plenty of good private solutions.

You can argue that government does a better job determining what insurance is best for you (or more likely, either regulating some minimum level of insurance or offering a one-size-fits-all insurance to everybody) than you can do using the private solutions, but you must first admit that there are private solutions other than you having to read all the fine print of a hundred insurance policies yourself.
9.9.2007 12:25pm
V:
The amazing JFThomas: "25 different flavors of Coke, or 50 different styles of Nike, are not really choice, they are the illusion of choice, as they are all produced by the same company. The real choice is between Coke and Pepsi. So it really isn't as wide as it first appears--and there is probably less true "choice" in soft drinks, on a nationwide basis, than there was fifty years ago."

Absolutely. Why just last night I went to a restaurant--I guess I should say I was forced to go to that specific restaurant because of its reputaton, convenience, and low prices--and observed the 20 entrees on the menu. "No choices," I thought to myself. I'm sitting here in this monopoly restaurant without any choices!

Life is so unfair...
9.9.2007 12:30pm
frankcross (mail):
Choice of choice is also governed by the market. Different stores stock products offering different amounts of choice for customers. Those who don't like choice can go to the stores with fewer choices. Those who want lots of options can go to stores offering lots of choices.

There are transaction costs to choice. For those who think the transaction costs are too great, they can go to stores with fewer choices or simply default to a repeat product, regardless of the options available.

It is true that safety and other regulation can be an efficient alternative to choice in some circumstances. But that is a limited category where the number who would choose the unsafe product is very small and the transaction costs are high.
9.9.2007 12:31pm
Bama 1L:
The proliferation of flavored Cokes and Pepsis isn't really driven by manufacturers' great respect for consumer choice; it's the knowledge that a lot of people will try any new product once or twice. Flavored colas, wacky toaster tarts, and bizarre ice cream combinations are novelty items designed to exploit many customers' impulse to buy new non-staple food items--particularly if they combine novelty with a respected brand. The manufacturer doesn't imagine that the product will keep selling for years.

Vanilla Coke, for instance, was available in the US from 2002 to 2005, then was relaunched in 2007 as Coca-Cola with Vanilla. Coca-Cola with Lemon did not even last all of 2005, and Black Cherry Vanilla Coke came and went in 2007.
9.9.2007 1:04pm
loki13 (mail):
liberty,

Two points-

First, you are arguing from belief and theory (which is fine). The issue is that studies with empirical data conducted by behavioral economists has shown that choice is not always a good thing. This has been shown in the several contexts, including the 'famous' ones you should be familiar with (jam, 401Ks, safety devices, health plans).

Second, assuming we use filters to collect this information about other services. What are the transaction costs of these services? The subscription to Consumer Reports? The time it takes to read or search the web information available? The amount of time you take to investigate the credibility of the metasource you use (does CR have a bias for Japanese cars, for example). Does the source have relevant information (has CR done a report on this particular consumer good)... if not, how much additional time will you spend perusing additional metasources and weighing their credibility and viewing that against your own, perfectly understood rational expectations? Assuming, of course, that they have all the information available (reliability of a new item, say).

Or do you just say, screw it, I'm getting the Cherry Coke?

When you have perfect information, are completely rational (self-knowing), and have no transaction costs, more choices are always a *good* thing... since you will make the right one, it doesn't matter.

But what research has shown is that in the real world, where real people make imperfect choices, more choices can be a bad thing. The question becomes this: how can we use this information to help guide us to more sensible policy decisions? There is a middle ground between North Korea and free market utopianism.
9.9.2007 1:24pm
Randy R. (mail):
There are many issues with choice, as Loki points out. I have no problem with 25 types of Coke, but I would have a problem with varying degress of safety in a car. I would rather the gov't set minimum standards of safety and healtfulness for our consumable products so that I can be assured that the spinach I eat is free from bacteria, or the buildings I enter have safe elevators.

Having a floor does not mean you don't have choice -- you can have 25 types of Coke, but we should have the confidence that all of them are free of problems.
9.9.2007 1:34pm
TJIT (mail):
J.F. Thomas, who really is the gift that keeps on giving, says
25 different flavors of Coke, or 50 different styles of Nike, are not really choice, they are the illusion of choice, as they are all produced by the same company.
Here are two products produced by catepillar. They are produced by the same company so I guess they just provide the illusion of choice.

Catepillar 904 B wheel loader

It has 52 horsepower motor, a 22 gallon fuel tank, and a 2.75 ton bucket capacity.

Catepillar 994G wheel loader

It has a 1,577 horsepower engine, 1,013 gallon fuel tank, and a 38 ton bucket capacity.

Of course both of these products are manufactured by the same company so having these two products is just the illusion of choice. More illustrations of different products from the same company having no difference can be found here

Catepillar photos

And I'm sure those Nike golf shoes will work perfectly well on the basketball court.
9.9.2007 1:37pm
liberty (mail) (www):
loki13,

Sure, there are transactions costs. However, if its important to the consumer then there is demand for that information, and it will exist. Yes, it won't be cost-free, however: is the government solution cost-free?
9.9.2007 1:43pm
TJIT (mail):
Steve2 said
Basically, if you present people with the choice of "Barefoot or Shod", then only one shoe need be designed, built, etc. for the entire world. Or, you can present them with the choice of what functional type of shoe. Then, you only need to consume resources to design one global sandal, one steel-toed workboot for the whole world, one running shoe, etc.
Steve2 let me give an example of why the idea of just designing on global standard is doomed to failure.

Lets look at steel toe boots. If a person is working in a shop on a cement floor all day they will probably want a boot with a wedge form, crepe sole because it is well padded and comfortable on cement.

If a persons work involves going up and down ladders they will want a boot sole that has a heel on it. The heel helps keep them from slipping through the ladder rund and injuring themselves.

A person working in a muddy environment is going to want soles with some sort of cleat on the bottom to help keep them from slipping.

Those are just a few reasons why one boot style is not going to work worldwide This expands to almost every product in existence.
9.9.2007 1:53pm
TJIT (mail):
I would point out that lots of safety standards are developed by private organizations and stipulated to be used by governments. The ASME boiler codes are a good example of this.

Models like this make sense because mechanical engineers are the folks who understand boilers and therefore have the knowledge to setup safety standards.
9.9.2007 1:56pm
Randy R. (mail):
It is pretty funny seeing so many people so in favor of choice.

However, in other parts of this website, we have people who argue against choice just as adamantly. Whether the issue is abortion or gay marriage or some other hot social topic, they don't seem to like choice very much, or would allow the market to function freely. Suddenly, government prohibitions are fine with them.
9.9.2007 1:58pm
liberty (mail) (www):
let me just as to what TJIT said:

If you eliminate competition and have a centralized source that creates the universal work boot, there won't be any incentive to invent these subtypes that TJIT mentions-- there won't be innovation and creation of new anti-slip boots that are better for farming or factory work or construction. only cut throat competition drives the kinds of specialized products that we see in this excessively choice-ridden marketplace.
9.9.2007 2:04pm
Harry Eagar (mail):
'Lately'? What about K. Marx and his 848 (or whatever the exact number was) kinds of hammers?

Don't people read Marx any more?
9.9.2007 2:11pm
TJIT (mail):
Randy R. said

However, in other parts of this website, we have people who argue against choice just as adamantly. Whether the issue is abortion or gay marriage or some other hot social topic, they don't seem to like choice very much,
I have never argued on those topics.

However, it is naive at best to not recognize those topics have social / ethical / bioethical elements that make them profoundly different then the topic of this post.
9.9.2007 2:22pm
Jim at FSU (mail):
I think that the man (Schwartz) is really just an average consumer with no special demands and this causes him to gloss over the fact that many of these choices ARE important for discerning consumers and it is those consumers that are driving the marketplace.

For example, when faced with a selection of bolts in Lowes, they all seem good enough. Except when you have a particular high stress and high temperature use in mind (attaching a wastegate flange to a turbine housing, 1700F operating temperature), at which point you realize all the selections in the store are substandard and differ only in the coatings they have.

Similarly, when you go into radio shack to buy a wire connector, you can find a million different types, it almost seems like anything would be good enough... Except when you are actually doing a project that has to operate in the real world- suddenly you realize that radio shack doesn't have anything meeting your requirements in wires, connectors or switching.

The market has choices because people demand them. If you have no particular demands to make of the marketplace, just buy a camry and shut up about the other choices. Those of us who want to drive a car with an engine we built ourselves like the marketplace the way it is. Many of us wish there was more choice. In fact, on the internet, there is almost unlimited choice if you know the right keywords and are willing to be patient finding a good price.

You need expertise in a particular field for the choices to become relevant. Uninformed dabblers are going to miss out on a lot of efficiency and utility at the margins in such a market, but this hardly dooms them. Less knowledgeable people can turn to the experts when making purchasing decisions. I, who am an expert in a number of automotive performance related fields, defer to other experts when I am confronted with too many choices in an unfamiliar field- stereo components, for example. This is the beauty of the internet- it allows consumers to have near-perfect information with a minimal expenditure of effort.
9.9.2007 2:58pm
Denny F. Crane! (mail):
Bama 1L said:


The proliferation of flavored Cokes and Pepsis isn't really driven by manufacturers' great respect for consumer choice; it's the knowledge that a lot of people will try any new product once or twice.


Oh really?

Beginning in the late 19th century, and throughout most of the 20th century, drug stores and soda fountains were flavoring colas with cherry, lemon, lime, chocolate and vanilla in response to consumer demand. Unfortunately, the bottlers haven't been able to successfully recreate those flavors in pre-bottled products, but they keep trying.

Do you really believe the companies are trying to foist these new efforts on us, or can you accept the fact that they're trying to meet consumer demand?

I drink diet coke with a squeeze of fresh lemon in it. If Coke could bottle a diet cola product that replicates the taste of fresh squeezed lemon, I would buy that instead of plain diet Coke. Unfortunately, the pre-bottled stuff tastes more like chemicals than lemons. I'm an example of unrequited consumer demand, but I appreciate the fact that they keep trying.

Oh, and I love the quip above about 50 varieties of Nikes. Any other marathon runners here? There is a reason for the dozens of varieties of distance running shoes alone--and that is because no two feet or running styles or body types are identical. Every shoe is built for a specific purpose. If you run 85 miles per week in the wrong shoes, your ankles, knees, hips, back and feet are likely to fail.

Choice is good. Choice is necessary. I would not live in a society with fewer choices.
9.9.2007 3:01pm
ReaderY:
Imagine a library of a trillion books scattered at random. Would there be any functional difference, other than the additional expense without return, between such a library and no library at all, or at any rate between such a library and the x volumes closest to the door that a person is willing to search?

Novice chess players see all legal moves: expert chess players see only excellent moves and never see bad ones.

When government has a reasonably workable model of reality, we are much better off, on many issues, to use the expertise the model provides to enable us to reduce our available choices by discarding unnecessary ones.

The reality is we're all somewhere between the novice and the expert, in a game whose rules are constantly changing. There may be an optimality point -- constantly changing -- where at any moment both fewer and more choices reduce utility. It may well hurt society to require ordinary people to have sophisticate expertise and wariness to avoid pitfalls such as losing their shirts on their houses and pensions. The cost of lots of ordinary people losing their shirts is quite high. A bit of risk aversion, and some limiting of choices, may well be optimal.
9.9.2007 3:07pm
ReaderY:
Randy R.,

Do you the market on contract killing should be allowed to function freely? Do you object to government limiting people's choices? Why not leave such matters to the market, which presumably can be trusted to self-regulate so that only people who the market finds to have utility dead than alive would be recipients of its services. Doesn't the government's imposition of its own views of the value of human life represent an interferance with the market that results in net inefficiency?
9.9.2007 3:13pm
ReaderY:
Posted too early...

Do you think the market on contract killing should be allowed to function freely? Do you object to government limiting people's choices? Why not leave such matters to the market, which presumably can be trusted to self-regulate so that only people who the market finds to have more utility dead than alive would be recipients of its services. Doesn't the government's imposition of its own views of the value of human life represent an interferance with the market that results in net inefficiency?
9.9.2007 3:16pm
advisory opinion:
Randy R. too clever by half, ends up on his face.

There's nothing inconsistent about being pro-consumer choice and being anti-abortion.

Just as there is nothing inconsistent about opposing 20 modes of infanticide and being pro-consumer choice.

Your choice ends where the life of an innocent 'person' (from the perspective of the anti-abortionist) begins. You might as well say that circumscribing a serial killer's choice of victims is inconsistent with being pro-choice at the supermarket.
9.9.2007 3:27pm
Randy R. (mail):
ReaderY: "Do you the market on contract killing should be allowed to function freely? Do you object to government limiting people's choices? Why not leave such matters to the market, which presumably can be trusted to self-regulate so that only people who the market finds to have utility dead than alive would be recipients of its services. Doesn't the government's imposition of its own views of the value of human life represent an interferance with the market that results in net inefficiency?"

Ah yes. Of course. Libertarians are always in favor of free market solutions, except when they are not. And the differences often turn on very arbitrary conditions.

I have no problem with the government outlawing contract killing or other such things. My point is that either you are in favor of free choice or your are not.

"However, it is naive at best to not recognize those topics have social / ethical / bioethical elements that make them profoundly different then the topic of this post."

Exactly my point. It is naive at best to think that having 25 different Cokes doesn't entail profound social, ethical, or bioethical elements, especially when our country represents only a tiny fraction of the planet, and yet we consume 25% of its energy.

Perhaps our vast freedom of choices limits choices in other parts of the world? Doesn't that have a social, ethical or bioethical element to it? Free choice doesn't mean the choice is free.

And yet, on something such as gay marriage, which is merely expanding a freedom, we have people who are totally against it, when they can't even articulate any reasons beyond religious beliefs, or a vague sense that 'it is wrong.' Of course, many people have said that there will be dire consequences, but either they can't articulate those consequences, or they have no basis for support of them. However, that doesn't stop them from trying!

So if people can argue that gay marriage is a bad choice for our society based on nothing more than a gut feeling that it is wrong, then others can say that 25 different types of Coke is wrong as well.

Of you can just agree that you are inconsistent in your beliefs. That, at least, is an honest statement and one I can accept.
9.9.2007 3:31pm
Le Messurier (mail):
loki13


There is a middle ground between North Korea and free market utopianism.


True; that's where we are, in the middle ground. Also, why has no one mentioned the greatest benefit of choice: No choice equals one price; many choices equals many prices. Many prices means lower prices. Some people call it competition.

And, if big brother makes the choices who choses the big brother? And if I don't like the choice he's made then what do I do? Sorry, I'll take our present middle ground over Hillary's "common good"!
9.9.2007 3:34pm
advisory opinion:
A tangential question is the problem of waste. What happens when an abundance of choice results in over-abundance of produce, and therefore wastage? Supermarkets (I think) dump huge amounts of food that don't sell by day's end. If an abundance of options (over-production?) is marginally more profitable than under-production (even taking into account the cost of waste), then the firm will continue to generate waste and stock a variety of options.

Maybe I framed the question in somewhat paradoxical terms to begin with - but is this really an efficient use of scarce resources?

Can someone point me to literature on the economics of wastage?
9.9.2007 3:34pm
Jim at FSU (mail):
I don't think you guys realize how little choice there really is in the marketplace for the average consumer. Most of the "choice" is really choice of packaging and marketing. The millions of choices are an attempt to find a winning strategy by a thousand varied attempts. Kind of like a frog spawning a pond full of tadpoles to see what survives to the next generation.

Take pesticides at Home Depot or Lowes. They have a giant section with hundreds of choices. All of them are watered down stuff, carefully selected and packaged for the consumer. To get the real stuff you have to go to a catalog where pest control experts get their supplies. It comes in boring brown containers.

Mutual funds, cars and pretty much every other commodity is packaged in an idiot friendly form and an expert form that is hidden at the boundaries of the market. There is nothing stopping the discerning expert consumer from managing his own investments, building his own car, brewing his own beer, sewing his own clothing or building his own house on land that he surveys himself.

Look at Schwartz and his story of buying a camry. It is actually kind of funny that he correctly observes that most of the choices are meaningless time wasters with minimal effect on one's enjoyment of the car. What he doesn't realize is that this is because all the really dangerous choices have been carefully hidden from his view. The choices are still out there, but you have to know to ask for them. And of course, most of them will void your warranty.

Choice theory mostly annoys me because it is such a practical area of exploration but so many of the people studying it are non-economic theory wonks who drive warrantied camrys and wear clothes from eddie bauer. They're mostly unaware of the marketplace and have little appreciation of how it would work anyway, yet they feel no shame making grand theories about how it works. Tenured blind men studying elephants, indeed.
9.9.2007 3:36pm
advisory opinion:
"My point is that either you are in favor of free choice or your are not."

Hilarious.

I must be in favor of 20 modes of torture if I want a choice of salads at the buffet.
9.9.2007 3:38pm
Jim at FSU (mail):

A tangential question is the problem of waste.

Ever see those signs in supermarkets? Buy one, get one free? Save 2 dollars on this item? Buy 3, get one free? There is no waste, only supply and demand. When the item won't sell at any price, it ends up in the dumpster where dumpster divers and homeless can retrieve it and add value to it. If not, it ends up as landfill or fertilizer, which has a certain low value of its own.
9.9.2007 3:39pm
advisory opinion:
Jim, you haven't answered my question though. Saying there's no waste is like saying there's no such thing as overproduction.
9.9.2007 3:42pm
A.C.:
When there is a near consensus about what choices are desirable, it makes sense to allow the people to "hire" the government to deal with the issue. Deterring and punishing serial killers and professional hit men is certainly one such area. Only "near" consensus is needed... the fact that a few nut jobs actually want a free market in this area is irrelevant. Some health and safety rules are also in this category. Nobody wants nuclear power plants to have serious accidents, and nobody wants lead and arsenic in their cosmetics.

The trouble arises when one part of society is asking the government to restrict choices, and another part is insisting that individuals be left to decide things on their own. When there is no consensus, how do you decide whether to let the government take over? There are some criteria we might use: ethical considerations, costs to the individual of getting it wrong, costs to society if the individual gets it wrong, extent to which a single solution for everyone is actually feasible, and so on, but it's rare to find a hotly contested issue where these things lead clearly to a decision in favor of more government. Usually there are good arguments on each side, or the issue wouldn't be hotly contested.

So the question becomes, if you can't get a consensus, is your presumption in favor of allowing government to step in over serious objections from some part of society, or is your presumtion in favor of leaving things in the private sector?
9.9.2007 3:43pm
liberty (mail) (www):

Perhaps our vast freedom of choices limits choices in other parts of the world? Doesn't that have a social, ethical or bioethical element to it?


It would if it did. But it doesn't.
9.9.2007 3:45pm
Le Messurier (mail):
advisory opinion:


What happens when an abundance of choice results in over-abundance of produce, and therefore wastage?

To avoid this "waste" as you call it, someone needs to set the level of production. My question would be, who sets the level; how is he chosen, what if he is wrong and we end up with shortages? The answer to your question above is that competition will reduce production to the most efficient level and waste is therefore reduced. It's really quite simple you see. No matter what you or I or the government do, the law of supply and demand will rule. It is immutable. Anything done to change one side or the other of the equation will effect the other. And remember, one persons "wasteage" is another's food bank.
9.9.2007 3:54pm
Jim at FSU (mail):

Jim, you haven't answered my question though. Saying there's no waste is like saying there's no such thing as overproduction.


The problem is quickly self correcting because the guy who produces more than can be sold at cost is going to eat the cost of the items that had to be thrown away or sold at below cost.

Most products aren't brought to market unless a safe margin of profit can be realized. A company that can't afford to have a failed product and significantly misjudges the market will go out of business.

This is the least wasteful way of organizing the economy. A government that misjudges the market (building rail service that no one wants lol amtrak) can just continue to extract money from the taxpayer for decades before anyone shuts them down.
9.9.2007 3:54pm
Bill R:
A.C., while it's probably true that virtually "...nobody wants lead and arsenic in their cosmetics", it's not clear that the Federal government needs to get involved in this to protect the general public.

If you choose to save money by buying cosmetics that are not "certified arsenic and lead free" under a program developed by a private entity such as Underwriter's Laboratory, it doesn't affect me much. Arguably there could be some increase in lead and arsenic in shared ground water from your cesspool from using such products, but I don't think that's the usual argument for such restrictions or on the "allowable" levels. An entity such as Underwriter's Labs would have an intense interest in monitoring the production of products certified under their program because their entire business is based on them being trusted and effective and loss of this trust and failure of their business could result from a single breach. As the recent history of products containing inappropriate levels lead, melamine, and some forms of glycol from China demonstrate, there's little accountability for the Federal government's failure to ensure product safety.

The safety of a nuclear plant is a different matter. Serious safety failures can impact (and even kill) thousands of people many miles from a plant -- even if that plant was planned and built after those people purchased their homes. Thus, it seems, regulation of nuclear plants may be something appropriate for a government agency as the impacted party may not be able to make an effective personal choice (except to leave the United States) if nuclear power plants are built widely throughout the U.S.
9.9.2007 4:14pm
advisory opinion:
Thanks. But I think we're talking past each other? I'm not talking about government. I'm asking a purely economic question about the economics of waste. When I said:

"If an abundance of options (over-production?) is marginally more profitable than under-production (even taking into account the cost of waste), then the firm will continue to generate waste and stock a variety of options."

I'm really implicitly asking if there's no situation whereby it is rational for the firm to overproduce. What if there is a situation in which it IS rational for the firm to overproduce? In other words, what if overproduction (of choices) is marginally more profitable even taking waste into account? Is this an efficient use of resources?

Is there a good economic explanation for this? Is it merely a seeming instance of allocative inefficiency or for real? Or is the question framed in an entirely wrong-headed fashion to begin with?
9.9.2007 4:16pm
J. F. Thomas (mail):
A government that misjudges the market (building rail service that no one wants lol amtrak) can just continue to extract money from the taxpayer for decades before anyone shuts them down.

Well, there are certain parts of the economy (transportation is one, telecommunications, electrical grids, water systems) that have never been economical to operate on a purely competitive basis. To pick on the passenger rail system in this country, which is a tiny fraction of the government's overall transportation spending, as an example of how the government wastes money on "inefficient" projects is ridiculous. Has the FAA, the interstate highway system, or the inland waterways system ever made a profit. I don't hear you calling for that to be shut down? Although I am sure there are a bunch of crazy libertarians out there who would like to privatize them. Of course I doubt any of them would be willing to buy the interstates across Nebraska or the Dakotas.
9.9.2007 4:22pm
AnonLawStudent:
J.F. Thomas:

Actually, the current system of transportation system funding is a fantastic example of what happens when a single payer controls resource allocation - $900M boondoggle bridges to nowhere, because a politically powerful politician can force the rest of us to pay for it. If transportation funding were de-centralized to the states, local communities would be forced to make a choice - is $900M in funding for the new interstate loop/spur worth the increased taxes or funding opportunity costs. Market pressures between states would reward correct choices and punish bad choices via voting and business relocations. More generally, devolving power to the state level would set up a powerful incentive for the most efficient level of taxation and regulation: too much and business leaves, to little, and, again, business leave. We're already seeing this in a limited manner via the move of heavy industry to the cheaper, less regulated, less taxed, and union-hostile Southeast.
9.9.2007 4:58pm
frankcross (mail):
Waste is also an externality. So you can't be sure that the market will be efficient here. However, the costs of waste are largely internalized, borne primarily by the business that has to dump products that they paid for. So the market will largely produce the right amount of waste but not perfectly.

And I'm not sure more choices mean more waste, they presumably involve less waste per individual product choice.
9.9.2007 5:10pm
Duncan Frissell (mail):
Note that advocates of coercive choice limitation have to argue that their restrictions are valuable enough to justify a breach of the peace up to and including the killing of resisters. See P. J. O'Rourke's "Would you kill your mother to pave I-95" in "Parliament of Whores".
9.9.2007 5:11pm
Jim at FSU (mail):
Your examples readily disprove all the points you cite for. In this post, we reveal the peril of sleeping through econ 101.

Highways can be operated for profit. Ever hear of a toll booth? Doing so reduces the number of unnecessary highway construction projects by ensuring that only highways that could pay for themselves would be constructed. Contrast this with our current system where a combination of pork spending and sovereign immunity ensures that we will build bridges to nowhere while high traffic bridges rust until they collapse and kill motorists. Private companies can't afford hundreds of billions to build useless bridges, nor can they afford to neglect maintenance for fear of lawsuits.

The inland waterways system never made a profit, but the people who used it before it was regulated certainly endured lower costs for that use. Add in all the real estate developers whose drainage ditches now count as "navigable waterways" and government regulation of the waterways is revealed to be a collosal timesink and money waster.

As for the FAA, pilots and airplane manufacturers already have ample incentive to not crash into one another or burst into flames in midair. Are you aware of how much automotive technology is in civil aviation these days? Despite this enormous overlap and the ease with which the market can supply highly reliable parts, the FAA routinely multiplies the cost of every part by several times due to the onerous inspection and certification program. Building an unregulated private craft would cost far less than building an FAA certified one and be just as safe. You aren't paying for safety, you are paying the salaries of bureaucrats.
9.9.2007 5:12pm
Jim at FSU (mail):
And the above was directed at JF Thomas, in case it wasn't obvious.
9.9.2007 5:13pm
fishbane (mail):
Do you think the market on contract killing should be allowed to function freely?

Absolutely not. I think the government should enforce minimum quality assurance standards, perhaps via a licensing framework. Of course, to keep the market as free as possible, the framework shouldn't encourage regulatory capture, like the Bar.
9.9.2007 5:33pm
J. F. Thomas (mail):
Highways can be operated for profit. Ever hear of a toll booth?

Really? Where are all these examples of profitable highways. Tollroads are generally operated to supplement operation and maintenance costs, not generate profits. Granted there might be a few routes in the country that could turn a profit (along the eastern seaboard, Chicago to Detroit and Milwaukee and a few others) but that kind of leaves much of the rest of the country screwed.

As for the FAA, pilots and airplane manufacturers already have ample incentive to not crash into one another or burst into flames in midair.

The new air traffic control system has been in the news recently. I notice that the airlines are complaining about the government being slow in implementing it. What I haven't heard is that the airline industry being willing to pay for the upgrades themselves. That of course is not their responsibility, it is the responsibility of the government. And who pays for all the airports? Certainly not the airlines.

If private roads are such a great idea, why has road building been a government function since almost the dawn of civilization?

And to counter me you seem to envision responsibility for road building to be taken over by state and local governments (which it already is to a great extent). You apparently object to federal government involvement in it, not government involvement per se.
9.9.2007 5:50pm
J. F. Thomas (mail):
As the recent history of products containing inappropriate levels lead, melamine, and some forms of glycol from China demonstrate, there's little accountability for the Federal government's failure to ensure product safety.

But these recent examples just prove how wrong you are. In these cases "the market" failed. Mattel and the other manufacturers supposedly had quality assurance programs in place to prevent the contamination and use of lead paint. The government inspection protocols caught the defects when the company standards failed. If not for the intervention of the supposedly incompetent and inept government regulators the products would have remained on the market.
9.9.2007 5:57pm
AnonLawStudent:
J.F. Thomas:

You refer to the new air traffic control system being in the news recently, but you clearly haven't been reading what's being said. Contrary to what you state, airline passengers do indeed pay for the air traffic control system via ticket taxes. What the airlines are complaining about is free-riding via (1) general aviation, and (2) small, unprofitable airports with politically powerful representatives. (A leading example is Georgia, with a state goal of an instrument runway within 45 driving minutes of every point in the state). Guess where this free-riding comes from: political power combined with lack of choice (competition) for provision of the services.

With regard to government involvement, the debate here is about choice, not government involvement per se. Having whatever government involvement does take place happen at the state level will result in a (less than ideal) level of market-driven choice, 50 of them to be precise, and a reasonable ability to choose among them.
9.9.2007 6:03pm
David M. Nieporent (www):
If private roads are such a great idea, why has road building been a government function since almost the dawn of civilization?
Uh, because it's hard to profit unless one can restrict access, and that's rather difficult to do with pedestrian footpaths? Where it's possible to do so, private roads have existed for at least a century. (Private bridges, where such restrictions are easy, have existed for centuries.)

I have no problem with the government outlawing contract killing or other such things. My point is that either you are in favor of free choice or your are not.
Since I'm pretty sure that contract killers don't give "free choice" to contract killees, there really is no "free choice" side on that one. If our goal were to get the cheapest, most efficient contract killers, then of course we should have free choice in contract killers. But since that isn't our goal, we shouldn't. Jam, on the other hand, tends not to jump out of an alley and shoot someone.
9.9.2007 6:18pm
David M. Nieporent (www):
But these recent examples just prove how wrong you are. In these cases "the market" failed. Mattel and the other manufacturers supposedly had quality assurance programs in place to prevent the contamination and use of lead paint. The government inspection protocols caught the defects when the company standards failed. If not for the intervention of the supposedly incompetent and inept government regulators the products would have remained on the market.
Yes, that's all true except for being false. It wasn't government inspectors who discovered the lead paint.
9.9.2007 6:27pm
Elliot123 (mail):
I just came back from my weekly trip to the grocery store. I guess I didn't realize how difficult that chore is for some people. There must have been thousands of items in the store. I bought about thirty of those items. It took about twenty minutes. Can someone tell me how I was harmed by all those choices?

Now I am dreading the next trip Branes &Noble. Just think of the thusands of books on the shelves. And the local university library? Millions of choices? And god save us from the choices on the internet...
9.9.2007 6:32pm
Brian K (mail):
Uh, because it's hard to profit unless one can restrict access, and that's rather difficult to do with pedestrian footpaths?
ahh...so then its only possible to profit from roads by restricting choice. you have to prevent people from walking.
9.9.2007 6:36pm
liberty (mail) (www):
Brian K,

I don't think its so much that they have to stop people from walking. I bet you even if you had a pedestrian path from NY to LA, people would still pay to fly and/or take a car, train or bus.
9.9.2007 6:40pm
David M. Nieporent (www):
Elliot: Virginia Postrel pointed out the basic flaw in Schwartz's reasoning several years ago.
9.9.2007 6:41pm
Le Messurier (mail):
What boggles my mind is that this thread on "choices" is eerily similar to the arguments pro and con about communism and socialism vs capitalism which I heard when I was in college in the early 60's. The arguments favoring democracy and capitalism and free enterprise were unequivocably proven superior when the Berlin Wall fell. I suspect that the anti-choice people in this argument at VC aren't old enough to remember the battles between left and right that took place 30 and more years ago. Believe me, it was a frustrating time for believers in democracy. That the arguments for what is really a form of socialism should again gain currency is testimony of the truth of the perils of forgetting history, as well as to the lack of understanding of absolutely fundamental economics. Be afraid; be very afraid.
9.9.2007 6:47pm
Avatar (mail):
The advantage of an abundance of choices is the ability of those choices to spur on innovation.

Ever sit down and think how much nicer things are these days? Not in big ways, like not dying of cancer and all. Just the little things. Take garbage bags. Theoretically I don't really need a choice with garbage bags - a thirty-gallon garbage bag is just like every other thirty-gallon garbage bag, and if they were the same as they were twenty years ago, nobody would be worse off.

But that's not true. Twenty years ago I had to go hunting for twist-ties, bundle up the end of the bag, and hope that I didn't rip it getting it out of the can if there was anything more pointy inside than a potato. Nowadays I have bags with drawstrings conveniently stored in the top of the bag, made out of material that won't rip if I'm filling them with shattered cinder blocks and surplus rusty knife blades. The bags are -better-!

All sorts of things are like that. My shoes are better. My soap is better. My anti-dandruff shampoo actually stops dandruff. And don't even get me started on technology-oriented products - I have more processing power in my pockets, between my music player and my cell phone, than a university would have access to in 1980.

For technology to be a spur to progress in the quality of goods, though, there has to be that competition - if you're the only government-sanctioned vendor of an item, the only innovation you're interested in is how to make them cheaper.
9.9.2007 6:59pm
Randy R. (mail):
Advisory: "Your choice ends where the life of an innocent 'person' (from the perspective of the anti-abortionist) begins."

Well, I agree: our choices should end where the life an innocent person begins. That person can be unborn, or born, right? So if my choices result in the environmental degredation that affects another innocent person, then my choice ends, I'm sure you would agree.

I also agree that ethics should be considered on my ability to make choices.

Therefore, I'm sure you would all agree that the proper libertarian would support controls on, say, vehicles that pollute too much, on the grounds that the pollution affects people like me who have asthma.

Today, I can buy wood from around the world, but the cost is that many primeval forests are being cut down and not replaced properly, thereby degrading the environment for everyone. Therefore, you would of course support a limiting of choice of wood because it affects the lives of the innocent people.

And since gay marriage doesn't affect the lives of any other innocent person, the gov't has no right to restrict it, correct?
9.9.2007 7:03pm
Sean O'Hara (mail) (www):
If private roads are such a great idea, why has road building been a government function since almost the dawn of civilization?


So you aren't familiar with the history of turnpikes in the US? Privately maintained roads used to be quite common:

In early US history, many individual citizens would gravel nearby stretches of road and collect a fee from people who used that specific stretch. Eventually, companies were formed to build, improve, and maintain a particular section of roadway, and tolls were collected from users to finance the enterprise. The enterprise was usually named to indicate the location of its roadway, often including the name of one or both of the termini. The word turnpike came into common use in the names of these roadways and companies, and is essentially used interchangeably with toll road in current terminology.
9.9.2007 7:04pm
Brian K (mail):
I don't think its so much that they have to stop people from walking. I bet you even if you had a pedestrian path from NY to LA, people would still pay to fly and/or take a car, train or bus.

But the vast majority of car trips are local ones. very few people drive all the way from NY to LA. your example only shows that relatively few long distance interstates might be able to make money. how do the many many local streets make a profit?
9.9.2007 7:07pm
ReaderY:
Le Messurier,

The idea that rational choice is bounded in humans and that its bounds have consequences is a serious intellectual idea. Examples of government action that limits choice include having a single currency (rather than having every bank issue its own bank-notes of varying quality), a single set of standards for weights and measurements, standard railroad guage, standard side of the road to drive on, standard telephone number system, standard time zones, standard internet communications protocol, standard TV channels, standard radio frequencies, etc.

These examples -- most of which we take for granted -- are all situations where government decided that having a single standard approach was greater net social benefit than giving everyone a choice.

One could argue that a few more things should be added to the list, or a few things now on it should be taken off. But to claim that these long-standing examples of government action that limits individual is a kind of communism or a threat to democracy seems a bit off the mark.
9.9.2007 7:09pm
Randy R. (mail):
Le Messurier: "ll. I suspect that the anti-choice people in this argument at VC aren't old enough to remember the battles between left and right that took place 30 and more years ago. Believe me, it was a frustrating time for believers in democracy."

Straw man. No one is arguing that government should limit choice (except for those who want gov't to stop abortion and gay marriage, naturally). We are merely arguing whether all this choice is itself a waste.

For myself, I'm just arguing to make a few points that libertarians can be as full of hypocracy as liberals and conservatives, and just as biased in their thinking. From what I can see here, libertarians are in favor of very limited gov't, except when they don't like MY choices, and then they suddenly are all in favor of gov't intervention.

Furthermore, they don't care what costs are associated with unlimited choice, as though it were all free, and they always seem to forget the successes of gov't intervention in the economy.
9.9.2007 7:11pm
ReaderY:
Does anyone on this list really believe people would be better off if they got to choose which side of the road to drive on rather than having the government decide it for them?
9.9.2007 7:11pm
Randy R. (mail):
Anonlaw student: :" Market pressures between states would reward correct choices and punish bad choices via voting and business relocations."

This statement should get the award for most naive, hands down!
9.9.2007 7:14pm
Randy R. (mail):
Few people know their history. Railroads used to have different gauges. And there was a tremendous incentive to have different gauges, since if your competitor had the same gauge as you did, he might charge less and steal your business.

However, that drove up the overall costs of railroading, since at the end of one line, and the goods would have to be unloaded and placed on another line.

Finally, gov't stepped in and created a standard guage, which reduced the costs for all. So yes, sometimes, gov't intervention can be a good thing.

The same thing happened in the 1920s, when Herbert Hoover was a (I think) Sec'y for the Interior. He forced through many standards for industry, thereby allowing them to save costs and make our industry internationally competitive.
9.9.2007 7:19pm
veteran:
"As for the complaints about the bad old days of Ma Bell, we are rapidly returning to those days. But this time around we won't have government oversight of the duopoly that will be the end result of the merger craze in telecommunications."

I totally agree and wondered if anyone would notice.

I think Mussolini wanted it refered to as "Corporatism"


As I watch our current political and economic evolution
I am impressed. The next few elections will bring the point home. I don't pretend to know what home will look like but I think we will have to make comfy good or bad.
9.9.2007 7:20pm
Randy R. (mail):
Maybe some people here would think that it's better to have unlimited choice in the sizes for bolts and things, but history has proved otherwise. This was one of Hoover's great achievements, and it's long forgotten.
9.9.2007 7:20pm
nelziq (mail) (www):
AnonLawStudent,
If we highway funding was implemented by individual States there would be serious underinvestment in interstate highways. Perhaps you would prefer the transportation system of certain landlocked African states where half the cost of a grain shipment from Europe occurs in crossing a border checkpoint. The historical economic success of the US was predicated on an effective national market which included elimination of internal trade barriers, uniform and effective commercial law, and investment in interstate infrastructure. If the cost of industrialization and trillions of dollars of additional production generated by a more modern economy, then I think "waste" of a few billion on an interstate highway system is well worth it.
9.9.2007 7:22pm
fishbane (mail):
Does anyone on this list really believe people would be better off if they got to choose which side of the road to drive on rather than having the government decide it for them?

This has been studied, and talked about. It is an example of collective decision making that benefits all, not unlike the near universal agreement that ownership of a thing is exclusionary. That's not the question - the question is how far down the chain of such decisions is it useful for a government to go? (It should be noted that governments didn't just suddenly decide which side of the road horses, wagons and those on foot should stick to - it codified it out of convention.)

There's a big difference between saying that established practice (say, driving on the correct side in whatever country you're in, or not shooting at bird on your neighbor's roof, or other things likely to lead to negative outcomes) should be enforced, and saying that people should accept the fact that an array of options for even trivial things may be put before them. Such is life. Heck, some people even enjoy navigating the transaction costs of discovering which particular things they prefer - among other names given to those processes are "cooking" and "wine tasting".
9.9.2007 7:31pm
frankcross (mail):
There's an obvious benefit to standardized weights and measures and other rules. They provide extremely valuable network benefits, which could be considered an aspect of transaction costs.

However, that exception ranges far from the original claims about consumer choice. I would say the response is a straw man, except that the occasional nods to anarchism on this site preclude that.
9.9.2007 7:38pm
ReaderY:
Comment on the abortion issue, since I helped start it: The question of what is a "person" seems an extra-economic problem, one that economic arguments can't solve. One can make economic arguments about such things only after having previously taken a side on the key issue in dispute based on undisclosed, but definitely non-economic, grounds.
9.9.2007 7:45pm
TruePath (mail) (www):
I think this response was pretty unfair to the point made.

It is undeniable that being given choices forces you to make one. You can't both argue that the market allows one to make a choice but doesn't force one to make a choice. Now of course the market doesn't force you to make the choice without aid but it still forces you to make some choice.

I mean suppose it was the case that people were endmically irrational so that every time they bought a car they would never bring themselves to pay an extra $100 for safety no matter how good it was for them yet were capable of seeing this in the abstract and voting for safety standards. Clearly in such a situation government imposed regulation would be the way to go.

Ultimately the point of this comment is merely that whether or not people are better off without regulation is a genuine empirical matter. We can easily create possible sorts of irrationality and preferences that make it the case that government regulation is better for situation X and we can create possible sorts of behavior (e.g. perfect rationality) which makes government regulation bad in a certain area. What doesn't make any sense is to sit back in our armchair and assume that government regulation must be good/bad without looking at the evidence for that particular case.

This is why I keep saying there is no such thing as being a libertarian. Sure one can be a person who often believes that government regulation is less efficent but there isn't an in principle view one can take that allows one to short circuit the debate in any particular situation.

In fact if people are so irrational as to regularly prefer government regulation when it is more harmful than helpful it just highlights the fact that in some circumstances we might need to regulate to constrain their irrationality, e.g., their proclivities to enter into limiting contracts that serve the role of regulation.

In short if you want to claim that area X should be deregulated you have to provide an argument that in area X people tend to be better off without regulation and you can't circumvent this by being a libertarian or anything else. You really need to get out the evidence and data in each and every case.
9.9.2007 7:49pm
ReaderY:
If isn't a libertarian, one might extend this list to add some things libertarians might object to, arguing that in other areas too (maybe pensions, health care, mortgages, and other hot-button issues), having a monopoly or a small number of large competitors do things or having things done only one or a few ways lowers net costs. The arguments may be good or bad, but I don't think they can be dismissed out of hand.
9.9.2007 7:49pm
TruePath (mail) (www):
Ilya, basically you are saying that you prefer to make the decision about what experts to trust than to have it imposed on you by the government. You may very well but you can't deny that there is a logically possible utility function which rates having to even choose which experts to trust as worse than the inefficiencies imposed by the government.

Moreover, I think it is plausible that such a utility function exists.

For instance why is it that most people refuse to try heroin or crack? The risk of using them once is extremely small but they fear that they will be irrational in the future so instead of allowing themselves to make a decision each and every time they create a blanket rule 'no heroin'.

It's entirely possible that many people are deeply irrational and are aware of this. They know that each and every time they had to choose between buying say safe spinach at the supermarket and risky spinach they would buy the risky to save money even though it is irrational. The research of people like Kahnerman and Tversky has made this possibility pretty reasonable so I don't think you can just dismiss the argument that people would be better off with fewer choices so easily.

And you certainly can't dismiss the point that libertarianism really would force the original poster to make choices though whether that matters is another discussion.
9.9.2007 7:56pm
AnonLawStudent:
Randy R.:

Naive? Slow, perhaps, but demonstrable. In recent decades: automobile production has moved from the Great Lakes states to the Southeast, for the reasons noted above (cheaper cost of living, lower taxes, and hostility to unions). Likewise, the largest depot for commercial aircraft maintenance is now ex-Brookley AFB, Mobile, Alabama, for the same reasons. Electricity production: you don't see blackouts and power shortages in parts of the country that don't go apeshit over the thought of new powerplant in their backyard; instead, you see massive investment in new generation everywhere except the East and West coasts. Population is shifting to match; Atlanta and Houston don't have inner city slums ala Detroit. I can think of other examples, even in the public sector, but I guess your brilliant ipse dixit put me in my place.
9.9.2007 8:02pm
Le Messurier (mail):
RandyR

No one is arguing that government should limit choice. We are merely arguing whether all this choice is itself a waste.

I believe that this over simplifies the argument which has been going on in this thread. The argument that "too much choice" is in fact a waste presumes the solution is government control over production. How could it be otherwise? Hence, my argument. As for Libertarianism, I don't follow the esoteric arguments pro or con. I'm not an absolutist or an ideologue. Some government control over limited activities is necessary. I prefer well regulated monopolies over government control where natural monopolies exist, but most of all I believe in free enterprise. Again, the belief in free enterprise is what drives my thinking about controlling choices. What little waste there exists is quickly squeezed out by the free markets. That's the beauty of free enterprise. You can't remove the economic realities of the market from the argument about waste.
9.9.2007 8:09pm
Brian K (mail):
that exception ranges far from the original claims about consumer choice. I would say the response is a straw man

I disagree. use of a standardized weights and measure precludes me from buying gasoline by the liter or by the hogshead. it effectively precludes consumer choice. who knows maybe the cosmetic industry would benefit from increased competition if they could use whatever measurements they wanted or the tourism industry might benefit by using another countries standards for weights and measurements.

this then becomes a problem when you make the argument that all choice is good. you can't exclude certain choices and they are "different" or somehow special and you can't admit that society is better off with this choice made for us. once you do you change your argument from "all choice is good" to "all choices that i think are good are good" which effectively neuters the argument, especially if you say that not having a certain choice "provides extremely valuable network benefits". it means you can't argue in abstract theory anymore, but that you have to argue using empirical evidence which is much less clear and much less in favor for unlimited consumer choice.
9.9.2007 8:10pm
Brian Macker (mail) (www):
This topic reminded of me of this idiot who's considered brilliant over a www.ted.com. He argues we have too much choice in our society with a different and equally stupid twist. Why the hell is he on the same stage as Dawkins and Dennett I'll never know.
9.9.2007 8:12pm
seadrive:
I don't think any one is too worried about the number of choices in cola or peanut butter. Give us a break.

For purposes of simplification, suppose there are 5 basic options in health insurance (HMO, PPO, etc.) If the consumer is offered his choice of the five, he can evaluate and choose. Now suppose that there are twenty slight variants on each of the 5 options. Or a hundred slighter variants on each of the 5 options. At some point, the cost of the additional analyis exceeds the potential increased utility, especially in the presence of uncertainty.

Further, if the number of choices is too large for analysis, he no longer has confidence that he made the right decision. How can anyone have confidence, a prioi, that he bought the mutual fund?
9.9.2007 8:24pm
Randy R. (mail):
Anonlawstudent: "Naive? Slow, perhaps, but demonstrable."

Yes, naive. Your comment that market forces would bear pressure upon the voting public is naive at best. people vote for or against candidates for a variety of reasons, and choosing the 'best' candidate is often the least considered option.

I live in WAshington, and our fair city voted Marion Barry back in as Mayor after he was convicted of smoking crack, AND he ran the city into the ground.

So to think that the voting public votes its economic interests is, well, naive beyond belief.

As for market forces, industry moved out of the north and to the south for a variety of reasons, one of which was lower taxes, but also lower workforce costs, and the absence of unions and worker safety and environmental regulations. It was a race to the bottom, in some respects. Now that those same industries are moving to Mexico and China, the people in the south are screaming "unfair!" Which, of course, pure hypocracy. If you live by the sword, you shouldn't complain when others live by the sword, and that forces you to die.

And that doesn't even take into account that many companies played one state after another for tax benefits, dangling the prospects of jobs. This benefited no one except the corporations. And often, once those tax benefits ended, they moved to another state that promised more benefits.
9.9.2007 8:29pm
Le Messurier (mail):
ReaderY

... to claim that these long-standing examples of government action that limits individual is a kind of communism or a threat to democracy seems a bit off the mark.

I never made that argument. By the way, standard time zones were instituted by the railroads; not the government. I would argue that they did it because the government failed to act, but maybe not.
9.9.2007 8:41pm
liberty (mail) (www):
seadrive,

You are forgetting the other benefits of additional options in the health care industry-- sompetition drives down the costs, the price of insurance falls, there is more innovation, new medicines are created, etc. In addition, you are assuming that the consumer will have to wade through all of these new options without any additional resources. But those resources would certainly be offered to him, since there would be demand for them.
9.9.2007 8:50pm
TJIT (mail):
Randy R said,
Maybe some people here would think that it's better to have unlimited choice in the sizes for bolts and things, but history has proved otherwise. This was one of Hoover's great achievements, and it's long forgotten.
Randy have you shopped for bolts recently??? There is pretty much an unlimited choice of sizes of bolts and bolt materials on the market.
9.9.2007 9:01pm
AnonLawStudent:
Randy R:

D.C. serves as the exact case of what happens when choice isn't available. The seat of government, as a practical matter, can't move. No choice. So despite bad policies (such as the reelection of Mr. Barry), D.C. retains tax revenue and population - lawyers, lobbyists, and defense contractors don't have a choice. While I'm no fan of the tax benefits used to lure industries to a state, that is a choice made by the people of that state; obviously, they saw a benefit to their state via jobs and income. What you call a "race to the bottom" is actually finding a natural "price point," if you will, i.e. what is the appropriate level of pay and regulation. Massachusetts is trying a different tack with state-funded health care; maybe that WILL attract industry - maybe benefits are a successful strategy in the market. I would also point out that the South wasn't always hostile to unions: that was a change in attitude resulting from the implosion of the steel industry in the 1970s - people were punished for a bad choice, and changed their behavior accordingly. I haven't seen too much industry fleeing the South in recent years; Toyota in Tennessee, Mercedes in Alabama, and Honda in Mississippi are all relatively recent investors; Mississippi seems more than happy to be the location of a new nuclear reactor. When industry does offshore, the cause is more often than not nationally set policies rather than local - excessive environmental protections, employment regulations, wages, etc. That is yet another example of choice - except the competitor who captures the industry isn't another state, it's another country. Maybe West Virginia likes its coal mines, thank you very much, and doesn't want to lose them to South Africa. Those of us living in D.C. shouldn't make that decision for West Virginians.
9.9.2007 9:02pm
K Parker (mail):
J.F.,
25 different flavors of Coke, or 50 different styles of Nike, are not really choice, they are the illusion of choice, as they are all produced by the same company
Absolutely, because as everyone knows, there's absolutely no difference between caffeine and no caffeine. Yeah, right.
9.9.2007 9:06pm
TJIT (mail):
Randy R said
It is naive at best to think that having 25 different Cokes doesn't entail profound social, ethical, or bioethical elements
Personally it is has been a long time since I have seen that much concentrated ignorance packed into one compact sentence.

But I am willing to be persuaded that it was a brilliant statement if Randy R can provide me some of the bioethical elements of having different flavors of carbonated sugar water.
9.9.2007 9:22pm
TJIT (mail):
Randy R also says
especially when our country represents only a tiny fraction of the planet, and yet we consume 25% of its energy.
That energy is used to produce many useful goods and services that provide the US and many other countries a good or improving standard of living.

Randy R also says
Perhaps our vast freedom of choices limits choices in other parts of the world? Doesn't that have a social, ethical or bioethical element to it?
I assume you were not kiddingwhen you asked that question so I will give you the answers no and no.

How do you think Zimbabwe went from being the bread basket of Africa to facing famine? I'll clue you in it was not US action it was bad governance.

That is the root cause of most deprivation in the world, not the amount of resources the US consumes.

Furthermore, European and US ag subsidies have done far more damage to Africa and other third world countries then US resource consumption ever has.

Another example of bad governance, not consumer choice or US resource consumption, causing harm to third world countries.
9.9.2007 9:40pm
Kurt9 (mail):
Magan and Schwartz make a valid point. Some (most?) people are unwilling to think and make choices for themselves. This is a reality. Other people, like many of us here, are more than willing to think and make our own choices. This is also a reality. Why not accept both aspects of this reality and create parallel systems of governance? One system is for people who want to be taken care of can plug into and a separate system for those who do not need to be taken care of.

Not only do I think that this is the only positive-sum solution to this dellemma, but I think such a setup would be quite stable and would work very well. Malaysia is kind of an example. Malaysia has parallel legal systems. One for muslims and one for everyone else and it seems that it has worked out quite well for them.

I think more fruitful direction of conversation for Megan and Schwartz would be about how to create such a system.
9.9.2007 9:44pm
TJIT (mail):
Finally Randy R says
Free choice doesn't mean the choice is free.
True statement as far as it goes.

However, free choice is vastly more economical then the cost and unintended consequences of limiting choice via anything but voluntary, individual action.
9.9.2007 9:45pm
Montie (mail):

We can easily create possible sorts of irrationality and preferences that make it the case that government regulation is better for situation X and we can create possible sorts of behavior (e.g. perfect rationality) which makes government regulation bad in a certain area.


I disagree that this is a general principle. Certainly, there are people with irrationality (e.g., minors, mentally ill) or preferences (e.g., criminals) for which regulation is desirable. Moreover, there are situations in which choice is detrimental to rational people due to externalities or some game theoretic strategy. However, a broad proposition that states that people are irrationally unable to decide matters for themselves strikes me as dangerous.
9.9.2007 9:47pm
J. F. Thomas (mail):
Atlanta and Houston don't have inner city slums ala Detroit.

If you don't think Atlanta have inner city slums, well all I can say is I will drop you off in a neighborhood in either city on a Friday night and challenge you to walk out of it. I bet you change your tune (and beg me not to leave you alone).
9.9.2007 9:53pm
Steve2:
TJIT, I appreciate your answer. I don't understand how your example, though, constitutes "choice" so much as different needs. Doesn't "choice", in a products context, mean preference, as opposed to functional requirements ("vehicle that's blue" versus "vehicle that seats eight")? And moving on to liberty avatar... is competition really necessary to get products to fill needs? Wouldn't constantly trying to improve product quality be part of the hypothetical World Footwear Manufacturer or World Garbage Bag Manufacturer's duty, regardless of competition? I.E., "you've been in charge of world shoe design for twenty years and workers in muddy environments are still slipping, you're fired/going to prison/etc."? Or am I the only one who assumes noblesse oblige as an inherent part of a technocracy?

Le Messurier brought up something else I wonder. What's intrinsic about economic uniformity that makes it contrary to non-economic freedoms, i.e. contrary to democracy? What do free markets have to do with political freedom, or bodily freedom, or important liberties like that? Would it really be impossible to excise the word "property" from the Constitution without changing/weakening/gutting the protection given to everything else?
9.9.2007 10:26pm
Jim at FSU (mail):

This benefited no one except the corporations. And often, once those tax benefits ended, they moved to another state that promised more benefits.


No one except their employees and customers. What does the state do in this scenario besides extract wealth from the corporation? Why should the corporation not seek to avoid this?


If private roads are such a great idea, why has road building been a government function since almost the dawn of civilization?


Sorry, you fail again at history and economics. There have been numerous toll and bridge companies in this country. Many of them were quite profitable.

There is even some supreme court caselaw featuring nothing but bridge companies. Charles River Bridge v. Warren Bridge 36 U.S. 420 (1837). Oh look, a pair of profitably and publicly traded private companies that built and operated a bridges. Guess you didn't know what you were talking about.

You're ignoring the numerous examples of privately owned toll roads and bridges. These were widely known and publicly traded companies.

And to counter me you seem to envision responsibility for road building to be taken over by state and local governments (which it already is to a great extent).


Again, nice try, but wasn't what I said at all. I am talking about privatization.
9.9.2007 10:45pm
Jim at FSU (mail):
I hate the capricious word and tag filters on the site sometimes. I also wish I could edit posts, but I see why we dont allow this. Oh well.

There was supposed to be an extra line in the second blockquote above "if private roads..."
"Really? Where are all these examples of profitable highways."

The following line was supposed to have been deleted:
"You're ignoring the numerous examples of privately owned toll roads and bridges. These were widely known and publicly traded companies."
9.9.2007 10:49pm
Jason F:
It seems obvious to me that if we posit that there's a choice -- call it Option A -- that benefits 1% of the consumer population by $100, but imposes additional transaction costs of more than $1 on all consumers (due to the additional cost of processing the information related to Option A), then it is efficient (Kaldor-Hicks efficient) to foreclose Option A. I'm not sure why this is controversial.
9.9.2007 10:55pm
jasmindad:
It's amazing how doctrinaire the free market posters are in this thread. It is a knee-jerk response to equate the claim, "increased number of choices do not always result in increased welfare" with socialism or calls for government control. When I first learned about how markets improve welfare (Adam Smith's invisible hand on to modern information theory analysis of markets), I was thrilled. Here was beautiful theory that explained many things, and also was a guide how think about economics. Behavioral economics, including Schwartz's work that someone characterized earlier as stupid without further analysis, similarly is thrilling to me because it explains certain things that earlier theories didn't account for. It certainly surprised me at first, because it is paradoxical, but it is good to know that, as a theoretical framework, the mantra "the more choice the better" doesn't always work. This is in fact building on earlier insights about transaction costs, insights that changed some of the intuitions people had about markets.

What does one do with this? I think it would be a big mistake to think all such problems need a fix. May be people can simply be alerted to the existence of this phenomenon. For example, studies indicate that for each increase in the number of options by ten, enrollment in 403 programs in companies fell by 2%, because people kept postponing making choices since they felt they needed to spend more time understanding and analyzing them. People didn't want to make a bad choice. So they postponed. And postponed. And postponed. Given this empirical fact, companies might tell the employees, look, if you don't have time, just choose one of the five retirement options, because we have decided that for most people these provide pretty good choices, and warn people that postponing is actually worse for their retirement than making a choice of one of the five. This has nothing to do with the dreaded government restricting choice, or even the paternalistic company doing it, but simply a reaction to the empirical fact that, even smart people, because of being busy, don't often have the time to process all the alternatives. In some cases, the government may have to act. I'm by no means stupid -- I have a Ph D in computer science, but for a few years in a row, when my state deregulated electric and gas, I didn't have time to go through a complicated set of options, and ended up postponing choosing, which actually meant I ended up choosing an expensive default option. In this case, it was probably a good idea for the government to force the offerers to provide information in an easily comparable form.

This is the beauty of theoretical understanding without dogmatic preconceptions. You first understand the phenomenon -- don't substitute your dogma or ideology for how the world works. Then, decide what a particular insight implies for action. Attacking theories about the paradox of choice as some kind of proposal for communism or socialism is idiotic.
9.9.2007 11:19pm
BGates (www):
Kurt9, that's exactly right. I'll start creating the parallel system for people befuddled by choice right now:

JF Thomas, the only soda I will let you drink is caffeine-free Coke classic. You may buy it only in 2-liter bottles, unless you are at a restaurant, sporting event, or movie, in which case get a medium. Each time you violate my directive, please send me $10 as penalty.

I would be happy to make such choices for anyone else who feels the need for guidance.
9.9.2007 11:43pm
Ryan Waxx (mail):

It seems obvious to me that if we posit that there's a choice -- call it Option A -- that benefits 1% of the consumer population by $100, but imposes additional transaction costs of more than $1 on all consumers (due to the additional cost of processing the information related to Option A), then it is efficient (Kaldor-Hicks efficient) to foreclose Option A.


Government control is by far the most likely way to achieve Option A, since the interest group getting the 100$ now has the motivation to lobby to make Option A mandatory, and the great bulk of the population doesn't have nearly as large a incentive to strip the interest group's privelege.
9.9.2007 11:55pm
PDXLawyer (mail):
Steve2:

I'm a patent lawyer, and I can assure you that broad market choice is a key driver of innovation. Why? Innovators do not always have a reliable sense of what products/functions/improvements are in demand. Indeed, often no one has a good sense of this, and users discover uses for new products other than what their makers envisioned.

Most product innovations fail, just like most new restaurants fail. If an inventor had to convince a single screener (even the smartest screener in the world) *in advance* that their invention met market needs, many worthwhile inventions would be squelched. Just because I don't want a product doesn't mean my neighbor won't.

I note by the way that there are some market reactions to this "too much choice" problem. My sister shops at a coop grocery, which generally reflects her tastes and social values. Her coop decided to stop carrying foods containing trans fats, a decision which she applauds. The commercal discount chain I go to, on the other hand, carries virtually no organic produce (which is OK with me since I don't usually buy it). We have each made one larger choice (which store to shop at) which has eliminated a lot of smaller choices.

Stores selling the same basic line of goods, but with a different focus (organic vs. discount grocers for example) give us the best of both worlds - they give some market outlet to a very wide range of innovative products (thus allowing them to be market tested) and at the same time
keep the number of choices within manageable bounds.

I wonder also if part of the "choice" phenomenon may be due to increasing rates of technological innovation. For example, when automobiles were first being marketed there was, in some ways, a wider variety of choice available than there is today. Some ran on steam. Some had tillers instead of steering wheels. These features were standardized only when a market consensus developed. The more new products, the more areas in which a market consensus is emerging, so the more "choice" which appears.
9.9.2007 11:59pm
Happy-lee:
Wow, cool thread. Almost too many choices for me. lol
9.10.2007 1:16am
Elliot Reed:
Second, if you do care, but simply don't want to take the time and effort to choose intelligently, the market again provides solutions for the problem. You can 1) rely on the advice of better-informed friends and acquiantances, 2) use one of the many consumer publications (e.g. - Consumer Reports) that summarize product information in an easy to use format, or 3) pay an expert to make your decisions for you.
(2) and (3) are really just pushing the problem back a step. Now I have to investigate potential information sources, investigate which sources of information are trustworthy (are the reviews in PC World objective, or are they just promoting their advertisers' products?), etc. This sometimes simplifies the process, but for the kind of complex purchase where you're looking at reviews it tends to be the beginning, not the end. I'm looking at what Consumer Reports has to say about cars not because I can just rely on their reviews and have that be the end of the decision, but because without that information I wouldn't even know where to start looking.

So yes, the number of choices offered by the market is often overwhelming and stressful.
9.10.2007 1:17am
Ilya Somin:
Magan and Schwartz make a valid point. Some (most?) people are unwilling to think and make choices for themselves. This is a reality. Other people, like many of us here, are more than willing to think and make our own choices. This is also a reality. Why not accept both aspects of this reality and create parallel systems of governance?

I agree that that is what we should do. But, as I tried to explain in the post, the market already does this. It provides mechanisms for people who want to research their choices themselves, and also for those who prefer to rely on the advice of others, hire experts, or simply choose randomly with virtually no thought. We don't need government regulation to satisfy the needs of people who prefer to avoid certain kinds of choices.
9.10.2007 1:39am
Dr. Weevil (mail) (www):
I'm surprised no one's mentioned liquor. There are many nice things about living in North Carolina, but state liquor stores are not one of them. There are drinks I'm quite fond of -- akvavit and calvados, for two -- that are simply not sold in the state stores. At least, I've never seen them on the shelf, and I don't think they take special orders.

I'm not sure it would even be legal to bring them across the state line, or to bring them through Virginia, for that matter, since D.C. and Maryland are the nearest jurisdictions where they can be bought. Even if it is legal, it's certainly not convenient to have to drive 500 miles or so (round trip) every time I want some akvavit or calvados. Please don't recommend that I buy a 5-year supply next time in Baltimore: I'm pretty sure being caught with 20 or 30 gallons of out-of-state liquor in my trunk would be a serious crime.

Anyway, I mention this as just one example where state governments has taken it upon themselves to reduce our choice, with no advantage whatsoever that I can see to the general public, and considerable disadvantage.
9.10.2007 1:45am
Mark F. (mail):
There is a middle ground between North Korea and free market utopianism.

Which is?
9.10.2007 1:48am
Mark F. (mail):
<i>This is why I keep saying there is no such thing as being a libertarian. Sure one can be a person who often believes that government regulation is less efficent but there isn't an in principle view one can take that allows one to short circuit the debate in any particular situation. </i>

Good Lord! I'm a libertarian because I think it is immoral to initiate coercion against other people. It's not a utilitarian position.
9.10.2007 1:55am
Brian Macker (mail) (www):
Jasmindad,

One of the beauties of theoretical understanding without dogmatic preconceptions is understanding existing theory before you expound your own cockeyed hypotheticals. Schwartz fails miserably at this. Here's a comment by Alan Marshall that demolishes just one of his idiotic notions:
"Saying there are 6.5 million combinations of stereo systems that can be created at Barry's local electronics shop (so thus we must find ourselves overwhelmed with choice) is a little like saying the small grocery shop with 40 items has millions (certainly more than 6.5) of dinner combinations (so thus we must find ourselves overwhelmed with choice).

I have approximately 14 million choices when purchasing a lottery ticket (49 choose 6). I am not overwhelmed.

That's the nature of combinations.

Apparently Barry never took a math course.

It's been awhile since I watched the video but his ignorance in several fields of endeavor irked me. You'd think he'd learn a little about economics before going forward on his little project.

For one thing it's as if the idiot had never heard of brand names, which if I recall correctly he never mentions.

Also if I recall correctly he was at least hinting at government intervention or at least praising situations where government intervention had reduced choice. That's where the objections to calls for government control come in. They are essentially being made. In addition I recall it being a direct attack on capitalism.

Even more than that, I had the vague feeling that he was trying to tell me the route to happiness was a reduction in choice.

Plus Swartz made all sorts of straw man arguments about what his supposed opponents were saying. I don't know of any free market advocate who says we should optimize choice in the sense of maximizing the number of choices we have availble to make.

Holding such a ridiculous position would imply that if say an industry had standardized on a particular set of pipe sizes that the free marketeers would jump in and say "No, no, you mustn't do that. For maximum freedom you must each have different pipe sizes."

Since people who are actual advocates of free markets don't do this you'd think the idiot in question would get the hint. Which leads me to the belief that this is not a misunderstanding on his part but an intentional act of deception. Thus he is getting no respect from me.

I just replay his video and he is attacking free markets within the first two minutes in this fashion.

Almost every couple of sentences this guy spews out are filled with misunderstandings of others positions, failures to grasp basic facts of reality, pointing out problems for which there are already solutions in the market as if he was the first to notice, failure to understand economics, pineful wishes for government intervention, and on and on.

Apparently he's against the breaking up of Ma Bell, patient autonomy, lifestyle choices and reinvention of self, drug commercials, when and if you are going to have children, and so forth.

He speaks "authoritiatively" stating "there was a time in the country when the default assumption that everyone had is that you got married as soon as you could and started having kids as soon as you could. The only real choice was who. Not when and not what you did after. Now everything is up for grabs." Really? Is that the way it really was? I don't think so. I think you still had to choose whether you wanted to get married or not. The idiot actually thinks that people didn't used to wonder whether they should pursue kids first or a career first, and so forth. I guess the guy never read any Shakespeare, history books or the like. It had me wondering what he thought about the time in this country when the default position was that one should marry outside your race. After all that adds all sorts of choice.

This is your typical "Golden Age" thinking. Yeah things were so better back then. Back then I only had to decide which two sticks to rub together for fire, and which woman to club. This is not some strawman characterization either, he's actually stating this kind of stuff. He's ignoring both the reality of the choices of the past and the bad choices that had to be made.

My wifes grandmother had to choose between raising my wifes mother herself or sending her away to an orphanage. She had to choose between remarrying and staying single and working. She had to choose between an abortion and not having an abortion. So on and so forth.

What about this tidbit of idiocy. He says with sarcasm, "In the present day we are blessed with the ability to work every minute of every day". What and idiot. He seems to think that people in the past didn't have such opportunities to work all day long. The guys never been on a dairy farm apparently, and is not familiar with labor practices in the past. Not only did you have the choice to work every minute of every day of the week but you had better make that choice in many cases or you'd loose your job or fail to feed your family. Free markets have made it so those aren't the only option.

As for your complaints about having too many choices with regards to your company 401K plan. Well in the old days you had one choice and one choice only the company stock. The choices are too hard for you today. Well then do the obvious and put it in a money market. I find it rather ridiculous for you to be advocating less choice for others because you can't make up your mind. You don't have the skills to make the choice, well the markets solved that too, hire a consultant.

Take a look at your plan. I'll bet you dollars to donuts there is nothing in your plan to invest in hard monetary assets like gold and silver. I tried several years ago to get my company to provide that option and they just wouldn't do it. They said it was too hard for the regular guy to understand. Also felt it was too risky and yet several of the options were hedge funds.

Well it's one option that I really need now and can't get. So for me, someone who bother to figure things out, the options are too little not too much.

I'm really pissed too because I planned to set most of my assets directly in gold. Would have seen much better returns than I got with the current options. I doubled the money in my IRA during the same period by holding bullion.

If Barry can't make up his mind about what choice of salad dresssing he should use then I suggest he stay out of that aisle of the market, in fact he should let his wife do all his shopping for him.
9.10.2007 2:10am
Brian Macker (mail) (www):
Jasmindad,

Oh, and by the way jump to the end of the video and you will see that it's in fact Swartz who moves to socialism and government control. If you do a flyover with your mouse it's the part labeled "Income Redistribution".

Yep, that's his solution to your problem choosing between different plans in your 401K. He wants to take that money away from you and give it to the poor Africans who don't have so much money and therefore so many choices. They after all suffer from a choice deficit.

Ignorant me. With all those different tropical diseases and rainforests in Africa one would think their would be lots of choices in Africa. Heck they must spend all day alone figuring out which of the tens of thousands of beetle species not to eat because it might be poisonous.

Barry thinks that walking into a grocery store is difficult with 175 salad dressings well just imagine the problem when you are standing in the rainforest and there are hundreds of thousands of different species to choose from, not to mention the quadtrillions of combinations of choices inherent due to the math. Do I cut down a mango sapling to club a vervet, or a liana vine to wack an african porcupine to name just two combinations.

If a section titled "Income Redistribution" isn't about socialism then I don't know what is. If I sound mocking that because these ideas are so silly they cry out for mockery.
9.10.2007 2:28am
Brian Macker (mail) (www):
"I agree that that is what we should do. But, as I tried to explain in the post, the market already does this. It provides mechanisms for people who want to research their choices themselves, and also for those who prefer to rely on the advice of others, hire experts, or simply choose randomly with virtually no thought."


Yeah, or join a cult. They'll make all your choices for you.
9.10.2007 2:31am
Jim at FSU (mail):

It seems obvious to me that if we posit that there's a choice -- call it Option A -- that benefits 1% of the consumer population by $100, but imposes additional transaction costs of more than $1 on all consumers (due to the additional cost of processing the information related to Option A), then it is efficient (Kaldor-Hicks efficient) to foreclose Option A. I'm not sure why this is controversial.


Possibly because the transactional costs of the world noticing and then doing something about that extra dollar is higher than a dollar per person, on average. A lot higher than a dollar, if tax policy is any indication.

Also, the true costs and benefits of most choices are hidden. They are often hidden from the participants themselves or subject to subjective perceptions of value. Even if perfect information existed, there isn't an omniscient bureaucrat that can magically know it and then implement a regulation to perfectly fix it.

And of course, there is no guarantee that the world won't soon change and render that regulation inefficient. And of course enforcement and compliance with the regulation impose costs of their own on the participants and society at large.
9.10.2007 2:40am
Brian Macker (mail) (www):
Advisory Opinion,

"Can someone point me to literature on the economics of wastage?"

Look up the word price controls. In particular look up "price floors surplus". When the government tries to control prices it results in huge amounts of wastage. Far more that the normal unavoidable waste you remark on.

Another way the government causes waste is by trying to control interest rates, which are really just another price, the time cost of money. Setting interest rates is just another form of price control. We are experiencing such wastage right now due to the artifically low interest rates set by Greenspan ever since the beginning of the Clinton years. Can anyone say "Housing surplus" and "Mortgage default".
9.10.2007 2:45am
BGates (www):
ElliotReed-

Second, if you do care, but simply don't want to take the time and effort to choose intelligently, the market again provides solutions for the problem. You can 1) rely on the advice of better-informed friends and acquiantances, 2) use one of the many consumer publications (e.g. - Consumer Reports) that summarize product information in an easy to use format, or 3) pay an expert to make your decisions for you.

(2) and (3) are really just pushing the problem back a step.
So is (1). What you need is a government standards body to let you know which of your friends are trustworthy.
9.10.2007 2:53am
Herb Sorensen (mail):
Serious students of choice should know about "Long Tail" by Chris Anderson, Senior Editor of Wired. Anderson argues mathematically against "The Paradox of Choice," but relative to supermarkets his argument is flawed because of his lack of understanding of the economics there. For related discussion see "The Birth of Plenty" by Bernstein.
9.10.2007 3:45am
whit:
"25 different flavors of Coke, or 50 different styles of Nike, are not really choice, they are the illusion of choice,"

the same tired, anti-capitalist leftist argument

anytime you want to criticize a positive, call it "illusory"

see: "it's not REAL power. your power is illusory"
"it's not really a free press. that freedom is illusory"

god, i've heard that tired argument so many times its absurd. get a new playbook.

you want to see a real lack of choice, read some of the reports from the old USSR (PJ Orourke has some good accounts).

" as they are all produced by the same company. The real choice is between Coke and Pepsi. So it really isn't as wide as it first appears--and there is probably less true "choice" in soft drinks, on a nationwide basis, than there was fifty years ago.

utter rubbish. first of all, lets talk artificial sweeteners. that's a massive change in choice. you can get all the good chemicals :) but none of the calories.

the "real choice?" between coke and pepsi. you are forgetting Hansens, Jones Soda, etc.

you can also choose among sodas that offer various kinds of artificial sweeteners, and of course the fully sugared ones.

you can get jamaican ginger beer, caffeine free coke (unheard of 50 years ago), caffeine free diet coke (ditto) etc.

your argument is absurd, but at least you hedged yourself ... it's "probably" less. lol

no, it's not.

i'm a big defender of choice. and alternative soft drinks (my bro got me in HANS stock before it went up 500%. thanks to the consumer now having more CHOICE)

now we have : hansens naturals in all sorts of flavors (fruits, etc.) that were completely unavailable 50 years ago

the diet variations, caffeine free variations, the whole energy drink subset etc.

and then there's generics. i can buy store brand soda for under .14 a can, which is WAY WAY WAY cheaper than you could get soda (in 1957 dollars) 50 years ago.

i just can't believe anybody could enter this discussion so completely ignorant of reality, but with an opinion already formed about the "illusion" of choice. the choice is "probably" less than it was 50 yrs ago?

that's a dumbfoundingly ignorant statement.
9.10.2007 5:35am
PaulD (mail):
It seems to me that investment retirement plans provide a fairly good illustration of how choice can be managed in a free market. There are tens of thousands of stocks and other types of retirement invesments to choose from. Some like to choose from these on their own. Making intelligent choices can require a great deal of time. At the other extreme, one can hire a planner to make all the investing decisions. Another option is to purchase a mutual fund that balances the purchase of investments for various retirement dates.
The government provides its mandatory option--social security--that very few would choose if given a choice.
9.10.2007 7:09am
liberty (mail) (www):

Wouldn't constantly trying to improve product quality be part of the hypothetical World Footwear Manufacturer or World Garbage Bag Manufacturer's duty, regardless of competition?
- Steve2

Did you completely miss the 20th century? Like, were you out sick or something?
9.10.2007 9:45am
liberty (mail) (www):

Would it really be impossible to excise the word "property" from the Constitution without changing/weakening/gutting the protection given to everything else?


The 1918 Soviet constitution guaranteed freedom of speech. It also guaranteed collective ownership (i.e. specifically excluded property rights) which of course meant that The People owned the presses, which were to allow The People to express their freely held views.

No, it is not possible to retain other freedoms without property rights. The two are mutually interdependent. You cannot have a state owned free press. You cannot have any other freedoms either, if you have no freedom to make your own choices, and you cannot make your own choices when the state owns all the stuff.

Welcome to the post-communist world, these are lessons we are supposed to have learned.
9.10.2007 9:49am
Nick P.:
Jim at FSU:
don't think you guys realize how little choice there really is in the marketplace for the average consumer. (snip)

Take pesticides at Home Depot or Lowes. They have a giant section with hundreds of choices. All of them are watered down stuff, carefully selected and packaged for the consumer. To get the real stuff you have to go to a catalog where pest control experts get their supplies. It comes in boring brown containers.

Bad example. The choice of pesticides in Home Depot/Lowes is probably more useful to the average consumer than the stuff sold to professionals. If the average consumer does a little reading on pesticides, he'll find that imidacloprid is an excellent pesticide with broad applicability and low toxicity to humans and other mammals. If he goes to the places where pest control experts get their supplies, he can find imidacloprid marketed as "Marathon" or "Merit." He'll probably pay a large wad of bills to purchase more imidacloprid than he'll ever use. Then, he'll have to worry about storage and disposal. If, on the other hand, he takes his new knowledge of pesticides to Lowes and reads the labels on a few bottles, he'll find several formulations of imidacloprid, some conveniently mixed with pyrethroids, in quantities suitable for a hobby greenhouse or rose garden. He'll pay more per mg of imidacloprid, but less overall because he's only buying what he needs.

Hopefully, in the process of choosing a product, the consumer will also encounter the literature describing risks to beneficial insects, but that is another matter.
9.10.2007 9:50am
J. F. Thomas (mail):
Bad example. The choice of pesticides in Home Depot/Lowes is probably more useful to the average consumer than the stuff sold to professionals. If the average consumer does a little reading on pesticides, he'll find that imidacloprid is an excellent pesticide with broad applicability and low toxicity to humans and other mammals.

Actually, it is a bad example for you libertarians because all the information on that label (and the concentrations) are strictly regulated by the government so as to be readable and informative to the consumer. Plus, if you ask the clerk you can get a Material Safety Data Sheet for any of the pesticides Lowes sells which will provide you even more information about the toxicity and potential dangers of the product.

In the absence of government regulation the manufacturer could simply label the product "kills bugs dead and is safe as milk", tack on an additional statement that there are no implied or specific warranties on the product and he would be home free.
9.10.2007 10:28am
loki13 (mail):
Again, not sure most people here are arguing the merits of the empirical case as opposed to the ideological case.

Ideological case summarized:
I like lots of choices of soda, and investing in gold, and I hate North Korea, therefore choice is always good! Yay!

Empirical case:
Studies have shown that people are often overwhelmed with choices, and make poor choices or (when overwhelmed) no choice when their best option is to make a choice (the infamous corporate savings plan example).

The issue, then, is how do we balance the twin factors- allowing for as much choice and the beneficial and unfettered workings of the free market, while still allowing for the problems that the empirical (and common sense) studies have shown. In short, how do we make sure that people have access to 500 types of soda without drinking Vanilla Flavored Caffeine-Free Pesticide? How do we make sure people have a choice of retirement plans, while still making sure they are not disincentivized from saving for retirement?

If there is a poster here who researches (carefully) every single purchase (not the big ticket items- soda, toothpaste, to make sure they're making the 'right purchase'), reads every contract carefully (credit card, mobile phone, software), and analyzes every single retirement strategy and health care combination, as well as looking into the backgrounds of all the experts Ilya recommends that they rely upon...

...then they're lying. Modern society is too complex, and we don't know our own rational preferences well enough. But we should engage in a healthy debate over autonomy and paternalism, without resorting to tired cliches.
9.10.2007 10:53am
A.C.:
Bill R -

Your point makes sense when lead and arsenic are seen as contaminants in cosmetics, which is the case nowadays. If the quantities are minute and the associated toxicology ambiguous, then it makes sense to leave a wide range of choices open. But lead and arsenic used to be primary ingredients in cosmetics -- I believe they made skin paler and more translucent. This was the case from ancient times well into the 19th Century, and I've seen containers of the stuff turn up even now in household hazardous waste collections.

At some point, developed societies did reach a level of consensus on these traditional cosmetic ingredients and decided to ban them. This was in the 1930s, and I believe the history involved a lot of grassroots activism. Nowadays it's unthinkable to use something with arsenic in it to get clearer skin. That choice is effectively off the market, and I don't think anyone misses it. The marketplace has generated better options.

Perhaps this could have been accomplished without a ban, for example through an independent standards group (as you suggest) or a labeling requirement. I'm not sure if these would have worked at the time, or even whether people at the time understood these as options, but they are certainly within the range of possibilities today. There is such a body for the cosmetics industry... I believe it started in the 1970s.

Even so, the regulatory option remains on the table for cases where the hazard is clear, a near-consensus exists, and a one-size-fits-all solution actually is feasible. Regulation may not be necessary if an industry is responsible and polices itself, but I believe industries are more likely to do so if at least the possibility of regulation is in the air. And sometimes it really is important to follow through with actual regulation of the worst hazards. I expect these cases to be rare, however, and I certainly wouldn't expect any precedent set in such cases to carry over to ordinary, non-hazardous products like work boots and colas.

Well, unless the colas actually contain cocaine.
9.10.2007 10:53am
Montie (mail):
loki13,

Even if we accept the view that people are faced with too many choices, who decides which choices to eliminate and where does that elimination of choices end?

On the other hand, I am not a priori opposed to a system that provides a "plain vanilla" default to people who are overwhelmed by choices but also allows people the choice to break away from conformity.
9.10.2007 11:13am
loki13 (mail):
Montie,

I think we are in agreement. On this board, far too many people reach for the instinctively knee-jerk reaction without considering what should be done (the ideology v. the reality). In the example of 401Ks (to use one), perhaps a default opt-in with limited choices should be used. If a person chooses to, they could affirmatively opt-out and choose to invest all their money in, say, gold. This would be a fair balancing of autonomy and paternalism (or, in my view, the reality of 98% of time crunched people with the remaining 2%).

It gets trickier when you view issues like trans fats. Should people have the 'choice' of yummy trans-fat filled foods that the market wants to provide them? Or should the paternalistic government step in and ban/regulate them so that people cannot make that choice? Is an informed choice enough (a label saying 'trans fat')? A tax to take into account health care externalities? An opt-out (no trans fat in restaurants and mass foods, but you can always buy 'special' trans fat crisco with skull and crossbones labels)?

The Vanilla Coke Answer is to let 'em all in.
The North Korean Answer is to ban 'em all.
What's your answer?
9.10.2007 11:27am
J. F. Thomas (mail):
Perhaps this could have been accomplished without a ban, for example through an independent standards group (as you suggest) or a labeling requirement. I'm not sure if these would have worked at the time, or even whether people at the time understood these as options, but they are certainly within the range of possibilities today.

Look at lead in paint. We haven't put lead in paint in this country since the early '70s (except for very limited exceptions). It is undoubtedly a very bad thing for human health and the environment for which adequate, although slightly more expensive, substitutes exist. The only reason people produce lead paint is to save a few cents in manufacturing. Something that we have banned has now crept back into the marketplace because of inadequate regulation and monitoring in third country. There is only one explanation--greed, pure and simple.
9.10.2007 11:31am
George Smith (mail):
Actually, I wish they made Caffeine Free Coke Zero. I would choose to buy it. Somehow, I think that the ones who are for a society of limited choices see themselves as the ones doing the limiting.
9.10.2007 11:34am
J. F. Thomas (mail):
I wish they made Caffeine Free Coke Zero.

Actually, I think they do. Isn't it called "water"?
9.10.2007 11:51am
liberty (mail) (www):

Actually, I think they do. Isn't it called "water"?


No, that's just your holier-than-thou totalitarian instinct speaking. There is actually a difference: its called "flavor" I think.
9.10.2007 11:53am
TJIT (mail):
loki13 said
The issue, then, is how do we balance the twin factors- allowing for as much choice and the beneficial and unfettered workings of the free market, while still allowing for the problems that the empirical (and common sense) studies have shown.
The devil is in the details.

I have not noticed (I could have missed it) any details from you or the other folks complaining about too much choice on how they want to approach the issue.

If there were details we could have a discussion.

Until then it is hand waving and I suspect behind the handwaving is the desire for another bureaucracy.
9.10.2007 11:56am
Elliot Reed:
But water lacks the special chemicals Coke uses to give Coke Zero its uniquely excremental flavor!
9.10.2007 12:01pm
Randy R. (mail):
"That is the root cause of most deprivation in the world, not the amount of resources the US consumes. "

There are many causes of deprivation in the world, of course. Many are political, but many are economic as well.

Today, we have a many choices in buying cheap wood and lumber. But much of this lumber comes from the cutting of old growth trees in Indonesia, Burma, and parts of China. They are cutting the forests faster than they can replenish them. Which means that although the societies attached to them earn some money today (not much -- most of the money goes to the middlemen), they will certainly be improvished tomorrow when they find out they have depleted a resource. It's already happening, of course.

So our choice of all different kinds of woods, and our demand for it, leads directly to the improvishment of whole societies in parts of the world. So for any to assume that our wonderful world of choices is cost free is naive.

In addition, I said that there are ethical issues for having 25 Cokes, and someone said this was a silly argument. I don't believe it is.

In order for Coke to develope, advertise and sell those 25 kinds, they have to consume vastly more resources than just selling two or three. Now, I admit, this is terrific for the economy, all that selling and buying and consuming and what not. But it consumes a tremendous amount of resources and energy to do that. There is a cost to all that consumption, and it results in greater pollution and consumption of limited resources. That's all I'm saying, and the question is whether our planet can sustain that amount of choice.

Some have argued that our consumption of 25% of the world's energy means that we are lifting other countries out of poverty. To a certain extent that is true. However, if we were to attempt to lift the rest of the world to our level of living, in other words, allow every other person on the planet the same amount of choices, well , it simply can't be done. There is NO WAY 6 billion people can have our standard of living as there are not enough resources to sustain that.

Again, I'm not sure what the answer is. And I'm very lucky and glad to be in the US where we have such choices. But many people in the world do not have even the luxury of clean drinking water, let alone access to one bottle of Coke. I would think, given humanitarian concerns, we should work towards allowing people the choice of clean drinking water worldwide before we offer a small slice of it the possibilility of 25 Cokes.

And that, to me, in an ethical issue.
9.10.2007 12:18pm
J. F. Thomas (mail):
I have not noticed (I could have missed it) any details from you or the other folks complaining about too much choice on how they want to approach the issue.

When you talk about choice, do you really mean you want to be able to choose between interior latex paint with lead in it and without. Because if you could I bet you would choose the unleaded paint for your own house but being the good capitalist you are, you would save your self the $2 a gallon and choose the leaded variety for your rental house. After all the poor saps who rent from you aren't "real" citizens, they don't even own property. Who cares if their kids grow up to be drooling morons.

Now of course you will also have to rely on the honesty of the paint manufacturer that the paint he is selling you for two bucks a gallon more actually has Titanium Dioxide instead of Lead Dioxide in it. There is no way for you to tell, short of a factory visit, or taking each and every gallon to an idependent lab, whether he is just cutting corners and selling leaded paint as unleaded. There is no regulatory agency to watch over him and make sure he is not just selling leaded paint as unleaded. And he may belong to some voluntary organization, but if he violates their rules, so what, it's not like they can fine or send him to jail. All they can do is decertify him.
9.10.2007 12:22pm
J. F. Thomas (mail):
No, that's just your holier-than-thou totalitarian instinct speaking.

Man, you libertarians really don't have much of a sense of humor, do you?
9.10.2007 12:27pm
Elliot Reed:
A lot of commenters seem to be attributing a pretty silly view to Schwartz and his defenders—that more choices are always bad and the solution is for the government should just take them away from us. That's an easy position to attack, but it's not Schwartz's position (I took his seminar on this topic in college, so I should know). Schwartz's position is more nuanced than that: he thinks the economic model of humans as agents with time-stable, transitive preferences, etc., is highly unrealistic, satisfying people's preferences doesn't necessarily make them better off, the market frequently offers too many choices, etc. I don't think Schwartz is committed to any particular policy solution in general, and it's silly to attack him as though he were.

But I still do hold to my point about how experts, etc. just push the problem back a step. It gets even worse when you consider that producers have large incentives to lie and mislead about their product's capabilities, so that you also have to do research into the types of evasions a seller will use on you.

For example, sellers routinely define terms in unintuitive ways for the purpose of getting uninformed consumers to misinterpret them. Consider, e.g., that if you mp3 player offers "up to 20 hours of playback time," this means "much less than 20 hours of playback time," or that if your monitor as advertised as having "millions of colors", this means "thousands of colors", or that a "lifetime guarantee" is defined in terms of the product's lifetime, not yours. This isn't an accident: it's all deliberate. This doesn't mean government intervention will produce a better result, but "the number and presentation of choices offered by the market is problematic, but a government intervention would be even worse" is a far cry from "the number and presentation of choices offered by the market is excellent and government intervention just screws things up".
9.10.2007 12:28pm
A.C.:
J. F. Thomas -

You've got a pretty strong argument for regulation of lead paint there, one I won't dispute. Here's another -- having a uniform rule for everyone removes the risk and expense of random lawsuits for everyone. Plaintiffs won't have the trouble and uncertainty of suing, and landlords and paint manufacturers won't have the risk of unpredictable damage awards. Presenting arguments like this is part of how you build the consensus for a uniform solution to a problem, if it's the kind of problem that lends itself to such a solution.

But that example still doesn't get you to limiting choice of carbonated drinks. My own choices are bubbly water and beer, so I don't actually care how many colas there are or how many companies make them. But I kind of like it that other people choose to drink the flavor of the month. Their choices contribute to my welfare by giving me something to giggle at.
9.10.2007 12:39pm
Dr. Weevil (mail) (www):
So offering sugar-free and caffeine-free and both-free versions of Coke "consume[s] vastly more resources" than if we still had only Classic Coke? That can't be right. Even if it brought an increase in the clear cutting of the virgin aspartame forests of Borneo, that was surely balanced by the large decrease in the strip-mining of Saharan rock sugar and the overfishing of the endangered South Atlantic caffeine squid. Or whatever -- I forget the details.
9.10.2007 12:44pm
J. F. Thomas (mail):
But that example still doesn't get you to limiting choice of carbonated drinks.

Of course it doesn't. And I'm not objecting to all the flavors of Coke that the brainiacs in Atlanta can dream up. I was harshly criticized above for pointing out that consolidation of industries actually limits, not expands choice, which was meant to be my point about Coke and Pepsi.
9.10.2007 12:59pm
Dr. Weevil (mail) (www):
Question:
Have Coke and Pepsi actually "consolidated" their industry by buying up smaller soft-drink companies? Or have they just grown by offering products that a lot more people want to drink than (e.g.) Cheerwine, which has been around for 90 years or so but I'd never heard of until I moved to its home state?
9.10.2007 1:06pm
Shinobi (mail):
I think Megan is making a false assumption about the people who would be making choices for her. She is assuming that these individuals have her best interests in mind, and that they will make the best possible choice for her. However depending on the experts making the decisions they may have underlying motives that would cause them not to actually make a balanced or in any way optimized choice. In fact by paying someone to make the decision for her she could end up paying someone to make her worse off than before.

It is wrong to assume the government (or indeed any entity) makes decisions that benefit individuals. The government makes decisions based not on facts, but on who lobby's the best. Regulations are often tailored to benefit one group or another at the expense of the taxpayers. This is not new, they've been doing it forever. I just do not see how one could so blindly assume that the government would make the best decision.

ven if she were to outsource her healthcare choices to "The Health Consultants" a group of people whose job it is to make your healthcare both awesome and cheap, she may not end up with the best possible deal. What if 'The Health Consultants" are owned by Accenture, and as such only choose from option that accenture offers. Going even further in that vein, what if they chose, not the best option for megan, but the option that will provide the highest margin for the company Accenture.

While it may seem like a great idea to maximize your utility by making someone else do the boring stuff for you, you may end up worse off in the end if you trust the wrong people. And in this case I think it is important to remember that the right people are very few and very far between.
9.10.2007 1:20pm
AnonLawStudent:
Randy R:

So I guess you're more qualified than the people of Borneo to decide what's good for them. Kinda like all of the NGO's who represent the interests of "the developing world," except the people in these countries don't want them "representing their interests," because they don't. The people of Borneo have a product that, considering their other options, they think its best to sell. We like the choice the product offers (maybe it's better than the wood available from domestic production), and choose to buy. Everyone has a net benefit. Except that YOU find this deal immoral. Funny how the people actually involved don't have a problem with it.

Your analysis about the economic effect of development and marketing also leaves out a critical step. Reduced economic activity overall means reduced R&D (because you can only skim a certain percentage off the economy to invest in research), longer times for products to commoditize, and reduced choice because of increased time to develop. So that discovery (or commoditization of an existing technology) that reduces the cost of water purification by 90% (which you seem to care so much about)... well, maybe it'll happen eventually, but 10 years later than it would have otherwise.
9.10.2007 1:49pm
David M. Nieporent (www):
Who cares if their kids grow up to be drooling morons.
I do, because then they might vote liberal, and take away our choices.


In the absence of government regulation the manufacturer could simply label the product "kills bugs dead and is safe as milk", tack on an additional statement that there are no implied or specific warranties on the product and he would be home free.
I don't know of any libertarian who countenances fraud. If it says "safe as milk," it has to be safe as milk; you can't both claim something and disclaim it to get away with fraud. Now, if it just said "kills bugs dead" and had no warranties, that would indeed be allowed. Of course, that would create an awfully big incentive for another manufacturer to market its product as the safe alternative, and to back up that claim with warranties. Just like the way foreign car manufacturers, which used to have poor quality reputations, had the incentive to advertise that their cars were high quality and then back up those claims with much longer warranties than the other manufacturers.
9.10.2007 1:55pm
J. F. Thomas (mail):
So I guess you're more qualified than the people of Borneo to decide what's good for them. Kinda like all of the NGO's who represent the interests of "the developing world," except the people in these countries don't want them "representing their interests," because they don't. The people of Borneo have a product that, considering their other options, they think its best to sell.

You're assuming that the people of Borneo, and not some international timber company and the corrupt government officials they bribe, have a say in how their natural resources are used. The poor peasants who lived in the forests have very little to say and benefit very little when the loggers come through and leave their lands destroyed and the people impoverished.

BTW, when did you want your tour of the inner city slums of Atlanta?
9.10.2007 2:01pm
J. F. Thomas (mail):
I don't know of any libertarian who countenances fraud. If it says "safe as milk," it has to be safe as milk; you can't both claim something and disclaim it to get away with fraud.

This may be true, but it seems that libertarians are constantly crying for tort reform and lament the out of control courts. So along with curtailing government regulation, you would also like to make it harder to sue manufacturers for producing harmful products.

Not to mention that it would simply harder, without regulation, to prove causation from defective products since concealing evidence of harm would be that much easier. "Clinical trials, who needs 'em!" In Ilya's perfect world, he would have to perform his own clinical trials. Perhaps he has the time and money to perform his own double blind experiments, I certainly don't.
9.10.2007 2:18pm
Phelps (mail) (www):
Am I the only one that remembers the Good Housekeeping Seal of Approval? Why do we assume that the government is the only body competent to review products for safety and quality? Hell, why do we assume that the government is even competent to do that? As a matter of fact, it looks like GH was doing safety and quality testing for the Seal in 1900, six years before the government got into the business.

Maybe that was because... there was a market for it?
9.10.2007 2:24pm
AnonLawStudent:
JF: What a terrific ad hominem argument! As it so happens, I've traveled through all three cities. Have you? While Atlanta and Houston certainly have impoverished areas, they have nothing like the miles of gang-infested ghettos of the rust belt. I've also trudged (alone and on foot) through the slums of Cairo, Fez, and Casablanca; I seriously doubt that any area of Atlanta or Houston would even come close.
9.10.2007 2:40pm
J. F. Thomas (mail):
JF: What a terrific ad hominem argument!

Well, gee I'm glad you think Atlanta is such a prosperous city. I am sure you checked your gut and it told you it is true. The truthiness can not be denied. You wouldn't want a little thing like facts to get in the way of your dream of Atlanta as a city where the streets are paved with gold. I bet when you were in Atlanta, you never ventured south of I-20 (except to go to the airport).

And as for the policies you love so much. They certainly don't seem to create much prosperity.
9.10.2007 3:19pm
loki13 (mail):
AnonLawStudent,

Houston and Atlanta are not just bad examples.

They are terrible examples.

Sometimes it is best to move on.
9.10.2007 3:36pm
AnonLawStudent:
JF and Loki: The problem with statistics is that you have to be careful what you cite... and understand what it says. In the chart you cite to, all but three of the cities (Miami, El Paso, and Atlanta) are in the rust belt. One also has to be careful with poverty statistics: the U.S. government defines the poverty line on a nationwide basis, with the exception of Hawaii, but "prosperity" as you call it has a vastly different price in different parts of the country. Thus, a family that is nominally below the poverty line in Atlanta (low c.o.l.) has far greater economic power than a family below (or even significantly above) the poverty line in, say, San Francisco, New York, or Detroit. Even biglaw attorneys are paid far less in Atlanta and Houston than they are in other major markets. Furthermore, the same census bureau noted that Atlanta had the largest growth of any city in the U.S., with Houston the third largest. I guess they're doing something to attract both people and industry.


Your comment is actually highly illustrative of why so many libertarians want to reign in the tort system - not that it is bad on principle (it's actually quite necessary in a libertarian system), but that the current tort system is taken advantage of by people running in and citing facially impressive science (or statistics) without a clue as to what that science or statistic actually infers. See, e.g., your 2:19PM post, Bendectin litigation, silicone breast implant litigation, or more generally, "Evaluating Scientific Evidence,"
9.10.2007 3:58pm
J. F. Thomas (mail):
See, e.g., your 2:19PM post, Bendectin litigation, silicone breast implant litigation, or more generally, "Evaluating Scientific Evidence,"

Do you remain "anon", just because you don't know what the hell you are talking about? Why didn't bother to look up cost of living indices before you started pulling them out of your ass. Your first two hunches were good, San Francisco and New York are indeed very expensive cities to live in, but Detroit and Atlanta are in the same ballpark when it comes to cost of living. Comparing lawyers' salaries is not a valid metric for cost or standard of living in a city.
9.10.2007 4:39pm
Elliot123 (mail):
Can anyone here relate the personal problems they have in making consumer choices? Does anyone here become paralyzed when faced with 25 kinds of Coke, 50 Nike shoe models, five hundred styles of eyeglasses frames, or a world-wide set of vacation destinations? If so, how do you deal with the problem?
9.10.2007 4:54pm
AnonLawStudent:
JF: Good catch on Detroit, although I'm not sure that I would consider a 10% difference in c.o.l. to be "in the same ballpark" to someone living at or near the poverty line. That being said, you haven't addressed my core (and original) argument: (1) That certain states and cities, e.g. Atlanta and Houston, have adopted policies that businesses and people prefer, and that the choice of these people and businesses to move to those locations punishes jurisdictions that adopt inefficient policies (e.g. the rust belt), and (2) That regulating at the state level provides choice, and thus market information regarding different policies. As applied to our current argument, Atlanta and Houston have very high growth, relatively low taxes, relatively low regulatory burden, and low c.o.l. overall - you can decide cause and effect. As you said, "you wouldn't want a little thing like facts to get in the way" of your argument; you cited facts, but they support the argument I'm making. Invective about "truthiness" and anonymity doesn't address substance.
9.10.2007 5:14pm
J. F. Thomas (mail):
Can anyone here relate the personal problems they have in making consumer choices? Does anyone here become paralyzed when faced with 25 kinds of Coke, 50 Nike shoe models

It's one thing when something, like choice in soft drinks, is purely a matter of personal taste. But even shoes can become quite problematic. I am a skier and choosing the right ski is quite difficult indeed (not to mention the right ski, boot, binding combo). But again that is all really personal preference and usually isn't a fatal decision. But in the world Ilya and some of you envision, the government shouldn't even be involved in making potentially fatal decisions. Each one of us would have to be a mini-FDA or EPA and do drug trials and hire experts for every product we were considering buying. If companies chose to conceal the dangers or hazardous ingredients of their products, nothing would stop them. It would be up to the consumer to hire an independent lab to determine the composition or choose a product that disclosed its formula (and trust that the manufacturer was telling the truth). Only when a product actually caused harm and the consumer was able to prove it would the manufacturer be liable to damages.

Manufacturers would also be able to make all kinds of wild claims about their products without any evidence they were safe or effective (as to a great extent they can and do now with "dietary supplements).
9.10.2007 5:23pm
J. F. Thomas (mail):
That certain states and cities, e.g. Atlanta and Houston, have adopted policies that businesses and people prefer

I certainly won't argue that Atlanta and Houston (or Georgia and Texas) are "business friendly" in that they tend to have low taxes, and will throw even more tax breaks and incentives to attract businesses. Also their land use regulations are non-existent or so easy to get around as to be meaningless, they have a proud tradition of looking the other way when corners are cut, environmental regulations flaunted or businesses practices are not quite ethical and their politicians are easily and cheaply bought. Of course people follow where the jobs go.

If you consider that triumph of the market, more power to you. But in the thirty plus years of record growth and attracting all those industries, the region is still mired in the bottom of almost all of the bad statistics the nation has to offer. Highest infant mortality, worst education, worst health care, highest poverty, highest overall crime. Plus, they managed to get a lot of the cancer caused by all those chemical plants that moved south. Your so-called rust belt states still perform better by almost every measure.
9.10.2007 5:43pm
Anon Law Student:
I do indeed consider it a triumph of the market. You seem to expect radical change in the course of a decade or two; that, I will assert, is simply not the way the world works. More importantly, the degree of land-use regulation, environmental regulation, and business regulation generally are all matters of local concern. As a political matter, people in California shouldn't impose their concept of any-of-the-above on the people of Georgia any more than Georgia should impose its concept of sexual morality on the people of California. As an economic matter, there is an optimal amount of regulation for any given jurisdiction. Having 50 competitors will tend to push all of them toward the optimal.
9.10.2007 6:10pm
David M. Nieporent (www):
It would be up to the consumer to hire an independent lab to determine the composition or choose a product that disclosed its formula (and trust that the manufacturer was telling the truth).
No, it wouldn't. No matter how many times you say it. Few if any people would "hire their own lab." They would rely on existing independent laboratories, just as we do when we rely on Consumer Reports or UL or the IIHS.
9.10.2007 6:25pm
Brian Macker (mail) (www):
TruePath,

"It is undeniable that being given choices forces you to make one."


Oh really? I don't think so. So if I gave you a list of ten choices of what to do right now that would force you to make a choice, and if the list was a thousand pages long that would be even worse? That's really ridiculous.

1) Go read a book
2) Make a new friend
3) Pick a rose.
....
101) Flash a neighbor.

So you think that just because I make such a list you are forced to choose?
9.10.2007 7:29pm
ReaderY:
I agree that most social decisions cannot be made as a matter of abstract theory but require an empirical basis. I would also note that empirical facts are often hard to come by reliably and often all we have is experience, hunches, and rules of thumb.

In the context of this somewhat humble view of how much we know and how well we can reason that I believe that constituitional law, which tends to emphasize abstract general principles, provides a poor framework for making good social decisions. This discussion explains why I have often disagreed with arguments made by our own Randy Barnett and others that courts should supervise economic legislation more closely than they now do in favor of decisions being decided by the market. Because regulation is sometimes good and sometimes bad, and the question of when regulation is good or harmful often depends on specific facts and people's different opinions and valueing of those facts, I don't believe courts have any basis for arriving at decisions.
9.10.2007 9:42pm
TJIT (mail):
Randy R says
There are many causes of deprivation in the world, of course. Many are political, but many are economic as well.
If you look most economic problems have a political cause.

Randy R again
Today, we have a many choices in buying cheap wood and lumber. But much of this lumber comes from the cutting of old growth trees in Indonesia, Burma, and parts of China. They are cutting the forests faster than they can replenish them. Which means that although the societies attached to them earn some money today (not much -- most of the money goes to the middlemen), they will certainly be improvished tomorrow when they find out they have depleted a resource. It's already happening, of course.
You will find that much of that old growth is supposed to protected. But lack of enforcement(for a variety of reasons), and lack of local stakeholders (nobody owns the forests or can get economic benefits from them with anything but logging) means that the forests get cleared

In other words there is a policy and political root cause to the problem you point out.

Randy R yet again
So our choice of all different kinds of woods, and our demand for it, leads directly to the improvishment of whole societies in parts of the world. So for any to assume that our wonderful world of choices is cost free is naive.
Actually choice is not the problem Western government environmental policies are one of the big drivers of forest destruction.

What about the land?
The hype over biofuels in the U.S. and Europe has had wide-ranging effects perhaps not envisioned by the environmental advocates who promote their use. Throughout tropical countries like Indonesia, Malaysia, Brazil, and Colombia, rainforests and grasslands are being cleared for soybean and oil-palm plantations to make biodiesel, a product that is then marketed halfway across the world as a "green" fuel.
Once again the problem you are concerned about has a root cause in bad government policy, not too much choice.
9.10.2007 10:13pm
TJIT (mail):
Randy R says
In order for Coke to develope, advertise and sell those 25 kinds, they have to consume vastly more resources than just selling two or three.
Got cite or reasoning behind that because I call BS.

There is an available market for soda. It does not require a vast amount of resources to squirt a different flavor into the carbonated sugar water and then put a different label on the bottle. In fact those two things probably use less resources then anything else in the entire coke manufacturing process.
Now, I admit, this is terrific for the economy, all that selling and buying and consuming and what not. But it consumes a tremendous amount of resources and energy to do that. There is a cost to all that consumption, and it results in greater pollution and consumption of limited resources. That's all I'm saying, and the question is whether our planet can sustain that amount of choice.
Got cite??

Because all I see is a tremendous amount of hand waving and assertions regarding the production of 25 different flavors of coke and not a thin wafer of fact to back the assertions up.
9.10.2007 10:40pm
TJIT (mail):
Randy R says
In addition, I said that there are ethical issues for having 25 Cokes, and someone said this was a silly argument. I don't believe it is.
Actually you said
"It is naive at best to think that having 25 different Cokes doesn't entail profound social, ethical, or bioethical elements"
And I did not call it silly, my comment regarding your statement was

"Personally it is has been a long time since I have seen that much concentrated ignorance packed into one compact sentence."

I said and I stand by it. Let me explain why.

You are horribly concerned about the impact 25 flavors of coke has on the developing world and the people who live there.

Yet you are utterly ignorant of the one thing in coke that has a substantial negative impact on the third world.

What would that substance be?? High fructose corn syrup.

And how does corn syrup get in the coke even though on the world market corn syrup is more expensive then cane sugar?? Because the US government has tariffs on cane sugar. The tariff makes corn syrup cheaper then cane sugar.

Why was this done?? To protect a profit center for corn syrup manufacturers like ADM and to give money to corn farmers.

What was the result?? Economic deprivation of developing world cane farmers and their fellow citizens because they are kept out of the US market.

US cotton subsidies are effectively destroying cotton production in third world countries. The farmers in third world countries are good at what they do but the farm subsidies force them to compete against the US taxpayer. I assure you the US taxpayer has much deeper pockets then the third world farmer does.

Read some of Oxfam's statements on farm subsidies, it might open your eyes a bit and help you understand what is causing real harm to the developing nations.

I like a clean environment, and I would like for the third world to prosper. That is why folks with your level of understanding frustrate me to no end.

You want to do the right thing but end up flailing away and wasting your time on issues that have no real impact on either issue.

Even worse, as is seen in the case of biofuels, concerned folks often end up pursuing policies that do more harm then good.
9.10.2007 11:12pm
Brian Macker (mail) (www):
"A lot of commenters seem to be attributing a pretty silly view to Schwartz and his defenders—that more choices are always bad and the solution is for the government should just take them away from us."

No, the truth is that Swartz is attributing a very silly view to those who advocate free markets, not the reverse. Here is what he has to say.

"I want to start with what I call the official dogma. The official dogma of what. The official dogma of all western industrial societies. And the official dogma runs like this,
'If we are interested in maximizing the welfare of our citizens, the way to do that, is to maximize individual freedom. The reason for this is both that freedom is and of itself good, valuable, worthwhile, essential to being human, and because if people have freedom then each of us can act on our own to do the things that will maximize our welfare and no one has to decide on our behalf. The way to maximize freedom is to maximize choice. The more choice people have the more freedom they have and the more freedom they have the more welfare they have.' "

Free market advocates don't say the stuff in bold. That's quite silly and actually sounds more like a socialist conception of freedom. Socialists will say something like, "Providing free health care enhances freedom because it gives people more choice".

Being free is not defined by having a numerically higher number of choices. In fact, one can be freer with fewer choices. Obviously if someone were to come up to you on the street, point a gun at you and say "Give me your shoes, or your socks, or your pants, or your wallet, or your shirt" he has increased the total number of choices you are presented with. He subtracts your one original choice of walking unmolested and gives you five new ones for a total increase of four. His actions also result in other additional choices for you that he didn't even mention. Choices like, do you fight, do you run, or do you scream. When he leaves do you report it to the police or not, do you share the story with friends? So on and so forth.

So it's Swartz who is actually playing the game of attributing silly views to his opponents. Yes I said opponents because it is quite clear he is against free markets.


"That's an easy position to attack, but it's not Schwartz's position (I took his seminar on this topic in college, so I should know)."

Well, go and watch the video of Swartz advocating his position. Is it different than what he taught in class? If you watch it and continue to maintain your position then in my estimation is that you are ill qualified to speak on the subject. It's quite clear what he's advocating publicly. It's quite clear if you know the history of the arguments and the context of the words being used. The words he uses which have special meaning in the context of the fields he is addressing.

If you are trying to sell me a private knowledge game I'm not buying it. We're supposed to rely on you as our authority when public statements by Swartz completely contradict your claims. When it's quite apparent you were not even aware of Swartz's mischaracterizations of the free market position. Rather than establishing your authority it brings your character into question.


"Schwartz's position is more nuanced than that: he thinks the economic model of humans as agents with time-stable, transitive preferences, etc., is highly unrealistic, satisfying people's preferences doesn't necessarily make them better off, the market frequently offers too many choices, etc. "

Who on earth thinks preferences are either time-stable or transitive? Not the majority of economists and free market advocates. He's been feeding you baloney. I'd ask for my money back. Nor do they believe that always satisfying people's preferences makes them better off.

Of course, satisfying people's preferences doesn't necessarily make them better off. Do you imagine free market advocates so stupid they've never heard of alcoholism, or smoking induced cancer? The case for letting people make bad choices does not rest on the silly notion that their preferences will always be good. You've been suckered. How could you possibly sit in class and let that slide by. Don't you have an ounce of skepticism?

What the hell does it mean to say that the market offers too many choices? By what standard are there too many choices, Schwartz's desires? Your desires? It's quite apparent that there is no empirical standard because the laundry list Schwartz comes up with is ridiculous. It's laughable, and obviously the product of a mind that is intolerant of other peoples choices.

Free market advocates do have standards for restricting choice. One is "Don't trespass". Trespass encompasses things like murder, rape, assault, battery, endangerment, pollution, poisoning, vandalism, theft, fraud, unauthorized use of property, etc. Another is "Don't defraud", and so on.

There is no rational principle that is going to lead one to conclude that we should restrict how many different kinds of salad dressing people should be able to choose from, or how many stereo components they should be able to choose from. It's the "how many": that is the problem. "How many" is a useless metric regarding what choices should be restricted and should be obviously so. Knowing the cardinality of choice gives you no normative information.

Now, it's fine to restrict people from being able to buy salad dressing that contains lead on the issue of pollution, fraud, or poisoning. How does one accomplish that by restricting "how many"? If you tell a supermarket it may only have four kinds of salad dressing it can still stock the shelves with four brands containing lead. Restricting on the basis of cardinality accomplishes nothing, and knowing the cardinality of choice gives you no normative information.


"I don't think Schwartz is committed to any particular policy solution in general, and it's silly to attack him as though he were."

Suppose the following. Suppose Schwartz had written an entire book on how advocates for the disabled were mistaken when they argue "the disabled are not a burden" and that there are indeed costs involved with keeping them around. Then gave specific examples of how the disabled place burdens on others. Then suppose he gave some specific policy solutions to the problem like, say mandatory testing and abortions, abandonment in the wilderness, and the like.

Supposing all that would you accept a statement like yours? You think a weasel word like "committed" makes things alright? It doesn't matter whether he is committed to them or not. That he suggested them is all that matters and on the most flimsy of arguments. An argument based on incredible ignorance.

We're not attacking him because we know his level of "commitment". We are attacking him because he's making asinine policy suggestions, straw man arguments, and in general showing bigotry for his own personal tastes.


"But I still do hold to my point about how experts, etc. just push the problem back a step. It gets even worse when you consider that producers have large incentives to lie and mislead about their product's capabilities, so that you also have to do research into the types of evasions a seller will use on you. For example, … "

In general everyone has the incentive to lie. That is unless you take into account reputation. You don't think this line of reasoning hasn't been expressed before or something? It has and doesn't get any less shallow being repeated. Think a little deeper than this, or actually read the other sides opinions without using a people like Schwartz to make your decisions for you.

It's quite apparent that you want a gatekeeper on the information you are fed, and you want that gatekeeper to be the government. It's as if you missed the entire American Revolution and what it was about. You have no understanding of the issues involved and you don't because you have professors like Swartz feeding you a bunch of rubbish.

The arguments Swartz didn't inform you about are readily available. I suggest you seek them out. Don't buy all this hogwash about "dogma" that Schwartz is feeding you. He's the one feeding you dogma, his personal dogma.

There is an excellent argument on why government regulation of industry doesn't work. Are you even aware of it? Probably not. This doesn't mean that people who understand and accept the argument want "totally unregulated industry". That's just another straw man. They just think that the standards for limiting choice suffice, and that government regulations are empirically prone to the problems outlined by the argument.


"…or that a "lifetime guarantee" is defined in terms of the product's lifetime, not yours."

That's fraud, take them to court. How does limiting choice fix that?


"This isn't an accident: it's all deliberate."

Wow, all? Who said "this" was an accident? Who exactly do you believe is claiming that such claims are accidental? Is this based on something Schwartz told you in his class?

"This doesn't mean government intervention will produce a better result, but 'the number and presentation of choices offered by the market is problematic, but a government intervention would be even worse' is a far cry from 'the number and presentation of choices offered by the market is excellent and government intervention just screws things up'."
9.10.2007 11:44pm
Brian Macker (mail) (www):
TJIT,

"Personally it is has been a long time since I have seen that much concentrated ignorance packed into one compact sentence."


Hear, hear. Road the hell is paved with good intentions and this kind of blantant ignorance is the cause. It's not the sentiment that is the problem. It's the complete lack of respect for the old saying, "If you want to solve a problem you first have to understand it".

So many people want the satisifaction of solving the problem, or at least publicizing the fact that they want to solve the problem, without all the hard work of first understanding it. Makes them feel good about themselves. They should be ashamed.

Nor do they have the strength of character that it takes to stand in public and advocate what are hard positions to understand. People who do that have to take all the flack of the endless hordes of well meaning and ignorant people accusing them of greed, selfishness, and worse.
9.10.2007 11:52pm
veteran:
Coke, lumber, paint, to which analogy should I respond?

What happened to the dilemma of choice suffered by Megan and Schwartz?


I have a possible remedy for them:

By taking one of the pharmaceuticals designed to separate the heart and soul from the mind they might be able to easily and stresslessly cope with life.

Upon taking the pills they might discover that either:
1. they think about the choice but don't care.
2. they might care about the choice but are blocked from thinking about it.

Damn, they might still be required to make the initial choice of which pill, but with a doctors assistance they might get through it.

But then, if they had a reaction to it they might have to chose to return to the doctor or, better for them, to wait for ideation to occur and then be carted off for some reason.


I think there are about 25,000,000 Americans using these "assistants" now.

Scares the hell out of me to think they might be voting.
9.11.2007 9:30am
abb3w:
Brian K: I disagree. use of a standardized weights and measure precludes me from buying gasoline by the liter or by the hogshead. it effectively precludes consumer choice.

I presume this was intended to be sarcasm; however, the problem is rather worse than that. Whether you buy gasoline by gallon, liter, or hogshead, you know (or can determine) that the volume you are purchasing is going to be a volume equivalent to 109.136649, 28.8308524, or 6875.60888 times that of a cube with sides equal to the distance that light in a vacuum travels during one period of the radiation corresponding to the transition between the two hyperfine levels of the ground state of the caesium-133 atom. Instead, try imagining buying gasoline by the cubic ell.

One of the lessons of history that the computer industry has been busy re-demonstrating for the last few decades is that the most important thing about standards is not that everyone agrees on which to use, but that what they mean is clearly defined. There are additional reductions to the information processing cost of transactions to using a shared set of standards, but they are trivial compared to the benefits of common understanding the standards under which goods are being offered.

TJIT: However, free choice is vastly more economical then the cost and unintended consequences of limiting choice via anything but voluntary, individual action.

I believe the above example on measure indicates that this is not the case. I also believe market forces may generally work to provide an approximate upper bound on how much choice is needed, assuming low market entry barriers.

Much more important, however, is that Government regulation is most obviously needed to keep out goods that are not only inferior, but what I will term "defective"; that is, having negative demand at all points on the price curve, BUT of magnitude below zero no more than the cost per transaction of acquiring information to distinguish the product from a substitute good. (I do not believe this has been previously described in the literature, but I Am Not An Economist.) The presence of such goods on the market is inherently undesirable, since the need to distinguish these from normal goods, or even (especially?) inferior goods, imposes extra costs on market participants and reduces market efficiency. Defective goods are inherently undesirable, but may yet exist on the market due to imperfect information. As trivial examples, the classical-era wine sweetened with sugar of lead... or the modern example of toddler toys made with lead-based paint.

The problem, of course, is how does one determine what goods are truly "defective"? This, as a information-market problem, is non-trivial. The current government regulatory approach isn't perfect (any more than "standards" bodies are), but seem sound.
9.11.2007 3:23pm
TJIT (mail):
abb3w,

The government setting standardized units of weights and measure is a rather poor example of choice restriction.

Not many consumers need to set up manufacturing tooling or equipment to meet a certain standard or measurement.

Furthermore, I don't see how you get from the idea that supporting product choice means defective products have to be one of the available choices.
9.11.2007 3:44pm
Dr. Weevil (mail) (www):
The U.S. government may set standardized weights and measures, but it doesn't generally enforce the use of one particular set. I buy milk by the quart and liquor by the liter -- well, usually .75 or 1.75 liters, but the point holds. Even the same company may use both systems for the same product: I have 12 ounce cans and a 2 liter bottle of Classic Coke in my refrigerator right now. I've read that a British grocer was prosecuted for selling bananas by the pound instead of the legally-mandated kilo, but as far as I know it's perfectly legal for Americans in all or most states to sell bananas or other products by the pound, the kilogram, or any other non-fraudulent unit. (By non-fraudulent, I mean that it surely would be illegal to sell something by the avoirdupois ounce when it was customarily sold by the heavier troy ounce.) Many products are sold in a limited number of sizes for all brands, but these sizes are purely customary, like selling eggs by the dozen, or English muffins in packages of six.
9.11.2007 5:28pm
ReaderY:

One of the lessons of history that the computer industry has been busy re-demonstrating for the last few decades is that the most important thing about standards is not that everyone agrees on which to use, but that what they mean is clearly defined. There are additional reductions to the information processing cost of transactions to using a shared set of standards, but they are trivial compared to the benefits of common understanding the standards under which goods are being offered.


Dare I point out that one of the benefits of having societal standards for sexual relationships is also that everyone understands the meaning of those relationships -- there is a common understanding which better enables individuals to navigate them successfully. Here also, the cost of the individual transactions may be trivial compared to the network effects.
9.11.2007 9:01pm
Richer (mail) (www):
All sorts of things are like that. My shoes are better. My soap is better. My anti-dandruff shampoo actually stops dandruff. And don't even get me started on technology-oriented products - I have more processing power in my pockets, between my music player and my cell phone, than a university would have access to in 1980.
9.12.2007 4:39am