Free market capitalism, almost by definition, places a value on choice over nearly anything else. And instinctively, so do I. Do I want more choices or fewer choices? More, always more! And I’m not alone in this. Accordingly, an economic system based on choice sounds beautiful, until you look more closely.
Putting “choice” on a pedestal is just one of the many failings of human psychology and, by extension, political and economic philosophy. Frankly, we’re not very good at making choices. Studies conducted by psychologist Daniel Kahneman, presented in “Thinking, Fast and Slow,” highlight the way humans, the so-called “rational animal,” are incapable of properly processing information to make “utility-maximizing” decisions, in which we get the greatest possible value from the outcome.
We are bad at logical decision-making: for example, when we choose a 90 percent risk of losing $1200 over a 100 percent chance of losing $1000, thus picking the option that will have us, on average, lose $1080 rather than $1000.
We are easily influenced by irrelevant information, as shown by the study finding that German judges chose to grant higher sentences to shoplifters after rolling high numbers on a pair of dice. We also choose to eat more food when the same amount is delivered on a bigger plate.
We are also poor at crafting our own future happiness: We focus excessively on immediate gratification, overestimate the amount of happiness particular purchases will bring, and are disproportionately influenced by current circumstances when thinking about the future.
This is all to say that economic “choice” is not all it’s cracked up to be and should not be the guiding principle when seeking a utility maximizing system. Nevertheless, the idea of “government coercion,” which is the alternative to unfettered choice, is often viewed negatively, particularly when it comes to making very personal decisions such as what to consume. Many take issue with the high tax on cigarettes, despite its public health benefit of reducing smoking, because they see it as coercive. Similarly, many were outraged at New York City‘s attempted ban on the sale of sugary drinks over 16 ounces (struck down by the New York State Court of Appeals on technical grounds), upset that if they wanted to buy 32 ounces of soda at the movies, they would have to pay extra for two 16-ounce cups rather than drinking it for a lower price out of a veritable tub.
The outrage, while understandable on a visceral level, is unfounded. The role of the state in regulation has never been based purely on a Lockean model, in which government would be responsible only for keeping citizens from infringing on each other’s fundamental rights. From the nation’s inception, “moral” legislation (such as the ban on polygamy) has been commonplace, and the staunchest proponents of an unregulated economy are often the ones who want increased regulation in other areas, such as abortion and marriage. Economic incentives are just some of the government’s many tools for its role in regulation. Positive and negative incentives abound, from taxation of cigarettes to the federal government making highway money for states contingent on their raising the drinking age to 21.
If you’re reluctant to get on board with the idea of government agenda in economic choice, then start small, with a non-economic example. Now, let’s ask the room. Does anyone have a problem with schools choosing to put healthier options closer to the front of the display in a cafeteria? Anyone?
Let’s assume that the answer is no—that we’re all decent human beings who are okay with six-year-olds seeing carrots before they see cookies, even though it’s technically manipulative. The children still have access to the cookies (whether they should at all is a separate question), but they are being gently guided toward the healthier option.
Now let’s look at the cigarette tax as an example of putting economic barriers in the way of harmful substances. In a sense, we’re all children, in that sometimes we want things that are not in our long-term interests. That’s fine. A tax on cigarettes is not a ban; it just increases the cost of purchase. The incentive simply shifts the decision-making metric. Even seatbelt laws don’t actually force anyone to wear a seatbelt—rather, they force a choice between wearing a seatbelt and risking a fine, strongly encouraging a decision that people might be too lackadaisical to make without the financial incentive. For those who oppose seatbelts, they can opt to risk the penalty. For those who want cigarettes enough to be worth the increased cost, they can choose to pay the price.
A common counterargument is that such a tax unfairly affects lower-income citizens, on whom the tax is more prohibitive. While it’s a problematic effect of income inequality that low-income people have a narrower set of choices than do those who are better off, it seems unreasonable to say that we should protect the “right” to be able to afford cigarettes with a zeal that we as a society don’t show when it comes to the surely more fundamental rights to decent housing and education.
To those skeptics who still feel strongly that people should have unfettered choice, it might be worth a reminder that very few choices have no external impact. Taxes on “socially harmful” practices such as smoking, which potentially increases the healthcare burden on society as a whole, are a way for the individuals to “internalize the externalities,” and pay a tax that covers the social healthcare cost.
Moreover, especially to reconcile this argument with the individual value I place on choice, I’ve had to take a good hard look at what it means to “make your own decisions.” Many object to government influence in the cigarette market, for example, without remembering to consider the other outside psychological influences at play: namely, the marketing efforts of the tobacco companies. The cigarette companies are doing all they can to convince us to buy their product, and it might be worth having legislatures, elected by us, on our side to protect us. Not only do we have to be on the lookout for external manipulation but, as mentioned, our internal rationality is doing us no favors either.
That is to say, O government, the price of the free market is too damn high. Shape my choices and craft my priorities. Sure, I’d love to make perfect choices all by myself. But really, who am I to decide?
Zalph is a member of the class of 2016.