Wednesday, January 12, 2005

Column on the "danger" of too many choices

The Issue of Choice

Tibor R. Machan

Barry Schwartz, a professor of psychology at Swarthmore
College, is the author of The Paradox of Choice: Why More
Is Less (2003), has once again penned an Op Ed piece for The New York
Times, his second in so many years, reiterating his theme that too much
choice is bad for people. This time he has jumped on the bandwagon of the
opponents of any measure of Social Security privatization, in part because
he thinks people are best off with fewer choices. As Schwartz puts it,

There is now accumulating evidence that choice isn't always good. Whether
people are choosing jam in a grocery store, essay topics in a college
class, or even potential partners in an evening of "speed dating," the
more options they have, the less likely they are to make a choice. In
other words, increasing options induces people to opt out of choosing
altogether, and this comes into play when people decide how to invest
their money for retirement.

When the good professor first aired this in an Op Ed in The Times, I
contacted him to explain that the plentitude of selections do not have the
purpose of providing each person with more and more of them. Rather, they
are to serve all the variety of people who would take advantage of all the

Consider this. You go to the supermarket which is brimming with
selections. Are they all to serve you? Surely not. Many of us patronize
two or three isles or sections, hardly ever even looking at the rest. But
the store accommodates thousands of customers and the greater the
selection, the more all these customers are accommodated.

Now consider some measure of privatization of Social SecurityÂ?an idea
that is now so watered down, by the Bush Administration itself, that the
Â?choicesÂ? involved are like those given by parents to toddlers, fiercely
Â?guided,Â? we might say. There are millions and millions of people who are
coerced to be part of the Social Security Ponzi scheme (named after 1920s
financial charlatan Charles Ponzi) and the system is not far from
bankruptcy. The returns on what one must put into it are about twice as
low than what one is likely to reap from investing in the stock market.
(Schwartz complains about this point, claiming there is no guarantee the
market will pay this; but then there is no guarantee in anything,
including any government scheme.) So, with a small percentage of what is
confiscated from us now at our disposal to investÂ?but in a great variety
of ways that the multitude of us is likely to utilizeÂ?there is a chance
that some of the money will not be wasted as it is routinely now.
VoilaÂ?bankruptcy at least postponed!

The idea of choice here is that of all the people involved, some set of
options will suit some of them, some will suit others. They need not all
cope with the task of choosing from every option thatÂ?s out there, as per
SchwartzÂ?s scenario.

The professorÂ?s evidence for the harmfulness of choiceÂ?or that people get
stymied with too many selections facing themÂ?is entirely misleading.
Anytime we choose, we do so selectively, from a small fraction of all the
alternatives that exist. But the more alternatives do exist, the more
people are being well served.

The problem, of course, is the professorÂ?s failure to appreciate human
nature. People are, as human beings, individuals, with very different
needs, objectives, goals, preferences, and wants. Sure, there are some
basic needs we all have, but those tend to be very general ones and can be
satisfied in a variety of ways. We all need food and clothing and
transportation but not the same kind by any means.

We also can use putting away for our old age, at least many of us can,
but exactly how we ought to do this will vary. Some may need to start to
do so early in life, some only later. Some, whose services are widely and
steadily wanted and who are good at keeping up the work may need not worry
about this at all, not in the systematic fashion that involves insurance

Unfortunately too many people are like Professor SchwartzÂ?they do not see
just how important individual differences are and even fail to see that
similar needs can be satisfied in a great variety of ways. So they keep
insisting on the one-size-fits all approach, which tends to support
various coercive public policies, all in the name of helping us out.

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