The Tyranny of Choice

(via Tyler Cowen)

Mark Steckbeck chooses to respond to a thoughful (if occasionally flakey) paper exploring whether more choice really makes us happier with a flippant dismissal.

I'm certain that Schwartz did not mean that there are too many ideas from which to choose to believe in, but why not? It's overwhelming listening to political ads during campaigns or editorials and stories on major topics in newspapers. As Ronald Coase said, the reasons for regulating markets for goods is no different than the reasons for regulating markets for ideas, execpt that there's probably more reason to regulate the latter.

I wonder which ideas Schwartz recommends we eliminate from the set from which we choose.

This is exactly why I often find myself impatient with libertarians. Any suggestion that the market might not be the be-all-and-end-all is aggressivly marched down the slippery slope to totalitarianism. Since Schwartz dare acknowledge that human beings are not rational actors with perfect information, he must be out to take away our freedom.

Yes, I enjoy choice. But while choice is good, more choice is not always necessarily better. At some point, dimishing return sets in. I enjoy having a choice of laundry detergents. Liquid or powder. Plain or scented. But having my grocery shelves cluttered with Life, Tide, All, Sun, etc. etc. adds nothing to my well-being. It's a fantasy to suggest that since the market allows this 'diversity' of choice to exist, we must surely be better off because of it. Steckbeck ignore the fact that apart from economic beings, we are also biological beings, social beings, cultural beings, psychological beings. To ignore all those aspects of who we are while simultaneously endowing us us with imaginary powers (perfect knowledge! rational actors!) is the worst kind of reductionism.

And no. I'm not out to suggest that we mandate the number of laundry detergent brands or stepping on your rights to purchase a double-skinny soy mocha latte. All I want to do is acknowledge that the rational-choice theory is only a model of human behavior and that all models have limits. And it makes perfect sense to me that the closer our society tries to approximate that model, the more the limitations of that model is going to show. Our inalienable rights are "life, liberty and the pursuit of happiness." Not "life, liberty and the pursuit of market efficiency."