Saturday, February 23, 2013

An On Demand World

If there is one noteworthy feature in our modern world, it is the tendency toward customization. Not that it is a novelty, "custom", "tailor made", "fitted" and "one of a kind" have always been synonymous with desirable. From the comparison between custom made versus off the rack clothing to the fast food ads that once touted having it "your way", we have long recognized that people want things made specifically tailored to their desires, and that they would pay a premium to receive such. However, the modern world, thanks to technological innovation, as well as a general increase in overall affluence, has finally reached the point when the mass market can receive some degree of customization. For example, we have moved from a trio of networks programming all television to dozens, then hundreds of cable channels, some aimed at fairly narrow niche markets, to the modern era of "on demand" television where a view can decide what to watch and when. Similarly, self service in everything from travel planning to stock brokerages have moved us away from the day where we handed our money to an expert and took what he suggested. We now have the ability to make many, even most, of our purchases fit our precise needs. We can buy just the songs we want rather than the entire album. We can design our own t-shirts. We can pick a pattern we like and have it printed on everything from clothing to cups to posters to bedsheets. We may not exercise full control over everything we buy, but not for a lack of trying. Every day some new entrepreneur is finding some new way to make a dollar off our desire for customizing our lives.

This is an interesting tendency, as it shows that we very clearly recognize two important economic facts. First, that individual desires differ widely*, and even seemingly universally desirable goods are desired in different ways by different individuals. Second, and most importantly, it recognizes that the economy produces the greatest satisfaction, and thus succeeds best as an economy ("Competition", "The Basics"), when we allow for that individual variation in desires, rather than trying to force individual wants in a few narrow categories.

Again, none of this is new. We have all heard the story (or at least those of us of a certain age have, it seems to have fallen out of favor of late), about how Henry Ford surrendered a truly impressive market share by sticking to the principle "you can have a Model T in any color you want, as long as it's black." Color may have seemed a frivolous issue to Ford, but it mattered enough to buyers that making cars available in various shades allowed his competitors to establish themselves in a market he seemed destined to dominate.

The reason I mention this is that there is one are in which we have a tendency to completely ignore this lesson, and instead try to impose one size fits all solutions, and that is the government. Somehow, we imagine that by forcing everyone to adopt the same economic decisions, be it their choice in wages, in insurance, in retirement, in safety precautions or what not, that we will improve everything. When, in truth,even something as supposedly objective as safety is still a question of personal values. If I would rather accept a risk than pay for some precaution, by forcing me to dot he opposite you do not improve my life, you reduce my total satisfaction. Yes, perhaps by your lights it is a sensible choice, but as we have just shown, what is and is not worth the cost is a hugely subjective choice. And so, forcing one set of values upon everyone in questions of cost and benefit is not to improve the world, but to reduce it. ("The Inherent Disappointment of Authoritarianism", "The Right Way", "Absolute Values", "The Danger Inherent in Banning "Bad Ideas"", "Why Vouchers are not the Answer")

The fact is, so long as government is limited to very simple, easily defined functions -- protecting rights of life, liberty and property -- these questions do not arise, and the state, far from being a "necessary evil", is instead a valuable tool. ("Tools", "The State of Nature and Man's Rights", "The Case for Small Government") Once we move beyond that, however, it becomes a question of choosing a single set of values, claiming it represents the objectively best choice and imposing it on everyone, and that will bring not happiness but dissatisfaction. ("Symmetry and Asymmetry in Government", "Negative and Positive Rights", "Guns and Drugs", "Hard Cases Make Bad Law", "Arbitrary Choices", "Consumer Protection", "The Most Misleading Word", "Luxury and Necessity")

What makes this so surprising is that this is a principle we recognize in things as mundane as pizza orders, burger toppings, juke boxes, college electives and television programming, and yet when it comes tot he biggest choices of our lives, such as how much to save for retirement, what approach to take to ensuring our health, contracts with our employers, the education of children or the design of our homes, we fail to apply the same reasoning and grant absolute power to elected officials. I just cannot understand how anyone can hold two such contradictory beliefs at the same time.

POSTSCRIPT

I understand that many do not hold my minimalist view of government and would have it regulate matters beyond the minimal protection of individual rights. The founders recognized something similar, seeing that reasonable people could differ on the role of government. And they came up with a brilliant solution. Rather than applying a single decision to the entire nation, let us devolve most power to the states, or even farther down, to counties, or cities, townships, communities and so on. If a decision is made on a sufficiently small scale, even while it still applies a single rule to multiple people, it gives those who are dissatisfied the chance to move to avoid the decision without fleeing the entire nation. It also gives each individual more say in such decisions, presumably preventing the worst abuses of such a system. ("Why I Am Not A Libertarian", "The Benefits of Federalism", "Consolidation and Diffusion", "Redundancy as a Protective Measure", "Minimal Reforms", "Reforms, Ideal and Real")

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