Paul Stiles: Is the American Dream Killing You?
This is another book that Your Humble Blogger obtained, pre-publication, through HarperCollins nifty FirstLook program. It’s a shame this one is so bad. I feel bad. It was free, and all. But it stinks on ice, and it made me cranky, and that’s too high a price. So, what else should I do but go on about it at great length?
[Ten thousand words and five weeks later: great length indeed. Here’s the thing: I started writing this up as I was reading it, and before I realized where the book was heading. My plan was to make notes for the eventual report I would give both to you, Gentle Reader, and to HarperCollins. Soon, though, I discovered that I had written four thousand words, and was only halfway through the book. I’m like that, as you know by now. The question, then, was what to do. I decided to (a) make a series of entries for this Tohu Bohu, and (b) wait to begin posting them until I had finished writing them all. This was a mistake. Still, I stuck to my mistake (it’s a thing I do), and now I have finished the damned thing. It turns out that the book wasn’t worth finishing, much less writing about in such detail. Still, I have written about it, and I think (saying so m’self) that some of what Mr. Stiles has inspired me to say is interesting in the context of our greater national conversation, not just in the context of one terrible book. So, you know, bear with me. And, please, comment. Most of all, I’m curious whether the author is just crazy, or if he is speaking for a largish section of America, whether these ideas can be dismissed, or whether we need to take them into account in our national rhetoric. And, of course, I’d like to think this isn’t all wasted pixels.]
See, the really annoying thing is that on the whole, I agree with Mr. Stiles. The American Dream is killing me. It is actually shortening my life, in part by opening up choices that encourage a lazy-ass blogger like myself to do things that fuck up my chemistry, and in part by eliminated some choices that would, on the whole, be healthier than the choices that remain. I agree that we have, as a society, handed over moral agency to The Market, and that we then pretend that there is no moral cost to sticking with the choices that The Market provides us, and we have allowed ourselves to become so complacent that we hardly notice or complain about the secondary and tertiary messages with which we disagree. I agree that there are better choices, and that not only do we not make them, but we are in some cases prevented from making them. So, yes, I agree with Mr. Stiles. The problem is that Mr. Stiles argues a fundamentally conservative case for all that, a case that dishonestly pretends that things Once Were Better, and that fails to take into account either the possibility for progress (rather than regress) or the fundamental fact of the universe: that it is more complex than we think it is. Mr. Stiles wants us to think that there is something new under the sun, and there is, there always is, but neither is it ever entirely new. It’s ... more complicated than that.
chazak, chazak, v’nitchazek,
-Vardibidian.
A note on The Market
Prologue and Introduction
Burnout
Meltdown
The Bubble
Flatland
Jolts Per Minute
Borrowed Time
The Ozone Hole
The Modern Gd
The Modern Gd (part the second)
The Market Curve
The Market Cross
This is totally the web-journal equivalent of inviting in the vampire, you know.
I’m very interested in what you’re going to write about this book. Unfortunately for you, I think I’m going to be (as usual) ignoring the main questions of your posts and instead pulling at some thread that you probably would have tucked in and hidden, were you writing a print artcile rather than a blog post. (If this gets annoying to anyone, feel free to rummage up some garlic and banish me.)
For example:
It’s broadly true that in most games, the more choices of action you have available, the better off you are. It’s certainly the case in the formal construction of market games, both for individual players — the more choices you have for where to purchase or where to sell, the better opportunity for getting a marginally better deal — and for the forward propagation of The Market itself as a player in the metagame of economic systems.
The problem is, the “more choice = better result” inequality doesn’t strictly hold for people. After a certain threshhold, having more choices tends to make people less happy and less efficient in decision-making.[*] The former effect, while nothing The Market cares about, puts market goals explicitly at odds with human well-being; the latter is a problem for the whole notion of efficient markets. Creating a market role for help in making decisions is only a partial dodge: sure, you can buy a mutual fund instead of individual stocks, but which fund?
If there’s anything new under the sun, it may be that a conservative theorist is noticing a tension between people’s and The Market’s well-being.
[*]Schwartz, Barry. “The Tyranny of Choice.” Scientific American April 2004. The full article isn’t online, but (more choices) there’s An overview of two posts written in response to it elsewhere on the web. Or you can Google “The Tyranny of Choice” “Scientific American” and pick from about 326 references. The interesting thing to me in that article was that people tend to divide pretty distinctly into Maximizers (who try to pick the best of the available choices) and Satisficers (who go for the first choice that is at least minimally acceptable. In very large choice situations, Satisficers trade a small chance of finding the best choice for their time and happiness compared to Maximizers.
I took a class from Mr. Schwartz, and I can’t say that I’m overly impressed by the Tyranny of Choice argument, although I haven’t read the entire thing (there is a book called The Paradox of Choice as well). One issue is that, like the bald man who has some hair, it’s difficult to tell when one more choice makes the difference. Plus the way The Market is supposed to work is that the bad mousetraps will go off the market, so that you will be choosing between, say, four good ones, rather than between 16 good bad and indifferent ones. Of course, there’s no evidence The Market does work like that, but there it is. Adding a good choice should drive out a bad one.
My main reservation about Mr. Schwartz’s work (and the work of Amos Tversky, which I think Mr. Schwartz bases a lot of his work on) is that it relies far too much on people’s perception of their own happiness. That is, a Satisficer may say she is happier than a Maximizer will report, but that may well be because the Satisficer was brought up to be, well, easily satisfied, and to express that satisfaction as happiness, whilst a Maximizer was brought up to, er, Maximize, and to express satisfaction as complacency, and reserve happiness for something more like triumph. Arguments about happiness would be easier if we had happiness gauges, preferably with a nice download capability into statistical analysis software (or even just comma-separated form).
Thanks,
-V.
Sure, I’m resting a lot of the above on Schwartz, so if you’re not impressed with him, I don’t expect a free pass to impress you myself, either. I’m also making the somewhat unsupported claim that markets “want” more options with which to crowd out the bad mousetraps and generally increase efficiency — am I kicking at a straw man?
I think the argument can hold even when you factor out Schwartz: the market relies on consumers in aggregate to make better-than-random evaluations of the offers they encounter. Doing so is not without cost — it takes time, and, in the case of products that can’t really be evaluated without trying them, money. As the market grows in number of distinct offers, it requires more of these evaluations, and as the worst options are driven off the market, the return to the consumer for making a good choice decreases. If a market grows faster than the population of consumers, the health of that market as a whole is directly in opposition to the interests of individual consumers.
Does that hold water?
That argument is plausible (and, I might add, particularly persuasive when applied to a health care ‘market’ where having the wrong doctor, or insurance, or medication is more directly injurious) but I’m not convinced that plausible is in fact what’s going on. The evaluations are not on whether a product is better or worse on some simple linear scale, but whether the product suits the moment’s needs. This evaluation is often done in the least stressful way, by choosing the fast food place on the right side of the road, for example, or the library book on the eye-level shelf. Humans are, in general, quite good at simplifying choices like that.
For instance: there are thirteen breakfast cereals, of which I like two. When I go into the store, I see a fourteenth kind. If I’m a satisficer, I ignore the fourteenth; after all, I already know of two perfectly good breakfast cereals. If I’m a maximizer, I get all excited: there’s a new breakfast cereal, let’s try it! Perhaps it’s awful, in which case the maximizer gets satisfaction from knowing that he has tried it and it stinks. That’s how the maximizer gets his kicks. Of course, it’ll cost the maximizer the cost of a package of breakfast cereal, but the return in hedons is pretty high—not from the tasty breakfast experience, but from the achievement of Trying Something New.
The time that a plethora of choices is really intimidating (I think) is in a really new area, your first car, or your first computer, or your first baby carriage; something where the cost of choosing badly is high, and you haven’t yet ruled out all the bad options. Of course, the market provides (for an added transaction) magazines, agents, and databases to help you make that choice.
To tie this back to Mr. Stiles… what he is trying to point out is that the Market doesn’t give a shit if you are happy or not. It’s possible, of course, that you will be happy with the range of choices, and it’s possible you won’t be. The Market doesn’t care. The Market just wants you to buy something. In fact (Mr. Stiles says) if you are dissatisfied with that purchase, so much the better, as you will go out and buy something else.
If the only way to take your money is to make you happy, then fine, the Market will make you happy. If there’s more profit in making you stressed (and there often is), then the Market will apply stress.
Thanks,
-V.
Sometimes I get a better handle on things if I look at them upside down:
To tie this back to Mr. Stiles… what he is trying to point out is that the Market doesn’t give a shit if you are happy or not. It’s possible, of course, that you will be happy with the range of choices, and it’s possible you won’t be. The Market doesn’t care. The Market just wants you to buy something.
I don’t think I’m saying anything different. Am I? Are you? I think in this particular instance we’re finding different ways to agree, which is, after all, what you said the theme of this series was going to be.
Except: I don’t think The Market even cares whether you’re buying or selling — it just wants value to keep moving around. The problem (and the reason why “buy something” is what it seems to say to most of us) is that when you keep moving things randomly from one pile to another, you trend towards fewer, larger piles. When you add in the potential for a large pile to leverage its size into larger movements, the situation only gets worse.
And this, I think, is where I boggle at Stiles (or your description of his arguments): that in his screed against The Market, he doesn’t seem to have produced any real criticism of markets.
Of course, the market provides (for an added transaction) magazines, agents, and databases to help you make that choice.
Like the mutual funds, this is still just a partial dodge. I can choose trust my own experiences at zero cost, and that of my friends for pretty much the same, but choosing to trust any of these agents itself involves time and money. Someone has to make these evaluations, too, and they expect to be compensated for making a better quality decision than the average customer. Aggregated over all customers of opinion agents, the cost of making a non-random decision hasn’t been eliminated, it’s just been spread out and monetized. Efficiently, yes, if the market for opinions is itself an efficient one, but not eliminated.
If I’m a satisficer, I ignore the fourteenth; after all, I already know of two perfectly good breakfast cereals. If I’m a maximizer, I get all excited: there’s a new breakfast cereal, let’s try it!
Which is great for (either of) you. But The Market hates those kinds of transactions, because they are random. The Market especially hates you-the-satisficer in this instance, because what if the new cereal really is a more efficient value? You-the-maximizer is acceptable provided that you keep buying ceral and you take the results of your experience into account. If it’s a rare purchase (plumber, computer, car, casket), you’ve fed randomness into the system without compensating for it. What’s good for you, for big items, is bad for The Market.
I don’t think The Market even cares whether you’re buying or selling — it just wants value to keep moving around.
That’s very much the case, and an important part of the whole thing. In fact, the Market doesn’t care if you are carving out a new transaction without buying or selling anything; the Market is happy if money is changing hands. So the Market is happy if the market for any product is confusing enough to create a secondary market in advice, thus creating more transactions… and presumably more stress.
I’m also unconvinced that the Market likes efficiency, as such. Inefficiencies provide opportunities for profit, often enough, which leads me to think that there are sufficient forces for inefficiency that they create a wash. Or perhaps it’s that people are so married to inefficiency that they can’t give it up, even in profit-seeking. At any rate, I find it more plausible that the Market aims to maximize transactions than that it aims to ruthlessly make things efficient.
Thanks,
-V.
At any rate, I find it more plausible that the Market aims to maximize transactions than that it aims to ruthlessly make things efficient.
I think it depends on how efficiency is constructed. A market certainly doesn’t care whether the system is trending towards more or less efficiency for individual consumers and their needs. I’d say that for The Market, efficiency involves maximizing the amount of energy that is freely moving around in transactions, in which case maximizing the number of transactions is one of the best means to that end.