One of the criticisms being leveled at our capitalist system these days is that it gives people too much choice, and too much choice is making us all too unhappy. Faced with too many choices, we're paralyzed with indecision. Like the allegorical donkey standing exactly between two equally appetizing haystacks, we are in danger of starving to death amidst plenty.
While people faced with more choices were more worried about making the wrong choice, here's an interesting twist:
People handed a choice not their own were less satisfied than those who made their own choices.
Subjects who ate a chocolate selected by the experimenter, rather than the one they'd picked, were much less satisfied than either group. Too much choice may cause regret, but no choice is worse.
How to keep from being overwhelmed by choices? One bit of advice is to set a bar, and pick the first choice that meets your criteria, but don't fixate on trying to pick the very best available. Or, as investment counselors advise, sell a stock while it's still going up – "leave some for the next person".
Author and social critic Barry Schwartz opposes private Social Security accounts – fewer choices are better, and no choice must be best of all – and advocates a 90% tax rate. I guess if you don't have any money to spend, you'll never have to make any of those irritating choices.
However, these positions aren't well supported by his book, The Paradox of Choice, and seem to derive from a leftward political point of view.
The fundamental problem with Schwartz's critique, however, isn't the author's leftist preferences. It's the difference between understanding the human mind and understanding market institutions. Psychology experiments often screen out the adjustments real people use to cope with choices, from brand loyalty to expert guidance. Markets, by contrast, produce not only more choice but also more ways to choose effectively.
Too many choices may be a problem for some, but for others, they're an opportunity.
Read the whole thing.
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