Reality & Representation

Schwartz also constantly mixes up objective opportunity and the representation of such: “. . . choice has negative features, and the negative features escalate as the number of choices increases.” No, the negative features escalate as the number of choices entertained, or represented to the self, increases.

It is very important for Schwartz that whatever negative consequences there may be here aren't a simple function of the number of choices, but are rather a function of the individual's psychology, otherwise all the advice he gives us (choose when to choose; satisfice more, maximize less; don't dwell on foregone alternatives; be grateful; anticipate adaptation; be wary of social comparison; etc.) would be moot.

But if he lays too much weight on the point that whether or not there are negative consequences to more choice depends on how individuals psychologically manage their representation of the choices, their procedures for making them, and their attitudes toward choices already made, then it becomes fairly clear that the market, per se, isn't harming anyone, or causing dissatisfaction by causing choices to proliferate. But Schwartz wouldn't want that to be clear.

Like Layard's argument that upward moves in the income distribution impose a negative externality on people beneath, Schwartz is more or less arguing that a high number of alternatives amounts to a negative externality of markets. But in both cases, the authors provide very useful and likely effective techniques of individual psychological management to immunize oneself against the negative effects of dimished comparative position or a vast array of choices. But this self-help advice directly implies that the market is not the causal origin of the imagined harm.

  • Bill

    Even an extreme liberal like myself, in favor of progressive taxation, less inequality, and strong regulation of markets, finds it weird here in Denmark. The levels of all of these, in Denmark, go beyond what even I would want to see in the U.S.. It makes life pretty nice here, though. The “ghettos” of Denmark, where immigrants are concentrated, are some pretty nice housing complexes – quite up to the level of the average middle-income apartment complexes in the U.S. The lack of crime is amazing, though drunken vandalism does leave a lot of broken bottles about.

  • Matthew

    The 63,5% highest rate of income tax, which in 2009 was reduced down to around 58% I believe, is not marginal. It is an average rate. That is, 58 cents in every dollar earned goes out in tax,
    So mortgage interest is tax deductible — not an especially attractive compensation.