Choices

Choice might not always be right. By voting down a proposal that seemed to have logic, compassion and the cultural consensus in favour of choice on its side, the House of Lords decided that it would not accept the right of the terminally ill to choose to die early.

PM and Brown sued for peace over the Turner pension plan that will enroll every British worker in a national pensions saving plan. You will have to opt out rather than opt in, which changes the nature of the choice.

Choice is becoming more contested and the ideologists are on the prowl. Economic libertarians see this as soft paternalism threatening fundamental liberties. Turner's crime is that he is setting up his preferred choice against the choice of individuals.
His proposal is a paternalist's sleight of hand and raise concerns. As every insurance salesman knows, once sold a saving plan we don't leave. When practised on a national scale by the state, it is a cunning extension of state power. In rational times the argument would have been that the right action for the state is to let people suffer the pain of their choices alongside the rewards of their pleasures.

But, suddenly, the argument has less resonance today. Turner is winning in a way impossible even five years ago. There is a growing awareness that we are myopic in the way we make choices and that the abundance of choice that affluence brings is making us unhappy. Wanting easy and fast have spoiled our sense of wise selection. People appear incapable of making choices for their own best interests as economist presume and wealth makes the consequences worse. The prevalence is more choices with less effort.

In The Challenge of Affluence, Offer argues that economists are wrong in the way they think about choice. The Oxford economic historian marshals an extraordinary array of evidence to demonstrate that the instinct of human beings is to want instant gratification: whether from physical activities, food, gambling or spending rather than saving, the human animal consistently underestimates the future costs of what he or she is doing in the here and now.

This is hardly news, except to economists who believe human beings rationally calibrate the costs and benefits of any action over time. The question for all societies is how to solve this individual tendency to self-destruct, preventing irrational, easy and more readily accessible choices and the answer has generally been to create incentives for self-control. Some are social, such as the stigma that used to be associated with deserting your family; some are regulatory, like controls on gambling. Society needs to encourage rational choices and educate individuals to limit bad choices.

What makes Offer's thesis original is that he argues that affluence makes self-control even harder and the capacity for individual self-destruction even greater.
In vain, economists try to explain this crisis as the result of a collectively rational choice. It is obvious to all but the most obtuse that it is the result of collective myopia; moreover, affluence is making the crisis worse. There is however a ray of hope. Smokers were in the same situation as today's over-eaters but have willingly submitted to greater and greater regulations. Other rational choices can also be publicized in the same fashion.

Markets have been offered products that are labeled more clearly so that consumers can make better-informed choices over what they buy. To go further, we may need some of what is called 'soft paternalism'. One of Offer's findings is that women may be better at self-control than men and more aware of the consequences of their actions. Any parent comparing their son's approach to studying for GCSEs against a daughter's will know what Offer means. Many more women than men are now going on to higher education; like obesity, this is threatening to become an epidemic.

For the past 20 years, the story has been that nothing must obstruct choice. We still want to choose, but we need safeguards against our own blindness and mistakes, even when the case seems irrefutable. Human qualities such as will power and self control have been appraised. We need many more wise choices. Our culture is now subtly changing.


Source: The Guardian, May 14