Forty Two, 10th July 2014
A modern society operates on the assumption that the more we can choose, the happier we will be. Consumerism, the proponent of choice, is the product of capitalism’s basis in Western economies; a free-market means more producers, which means more products, which means consumers can walk into Asda and select from 27 varieties of baked bean. This, we’re told, is what makes us happier, and our subsequent lunch better.
At least that’s the premise challenged by Barry Schwartz in his book ‘The Paradox of Choice’. It examines – at a molecular level – exactly how and why we make the decisions we make, and how they affect our wellbeing. He assumes that the most fundamental human desire is to be happy, and shows how the addition of many more choices can make us miserable. He demonstrates how we agonise over which pair of jeans to buy, or which insurance policy to take out, when we would be happy and satisfied with a random selection.
His central thesis is the application of a model to society, to explain how we can best make our choices. Like most simplified psychological models, it is binary: it divides consumers into two categories, which he calls ‘maximisers’ and ‘satisficers’.
A maximiser, Schwartz claims, is a shopper who will look at every available option when making a choice. They would trawl through every shop in town, evaluating trade-offs of price and quality and colour and brand – looking for the best. That, you might say, was the rational way of shopping. Yet Schwartz tells us that the buyer who decides an item is simply ‘good enough’ – that it adheres to a set of pre-defined criteria rather than beating all of the other alternatives – will be happier with their choice. This, he says, is ‘satisficing’.
The analysis behind this claim lies in economic theory. Whilst the back of the book will tell you Schwartz’ argument is about ‘psychology and business’, it’s really alternative microeconomics: numbers with a human face. Economists spend their lives researching the way that we make choices and how we spend our money, but ‘Paradox’ laughs at economics’ adamance in treating humans as ‘rational actors’. Schwartz argues that whilst the jumper you buy after five hours of shopping may be better and cheaper, the primary function of shopping in contemporary society is not to find the perfect product – it is to make us happy. If the satisficer is happy paying more money for an inferior jumper, and hasn’t wasted an afternoon, Schwartz argues he will be better off.
He explores the familiar notion of ‘opportunity cost’ – the second-best option forgone when an economic decision is made. Whilst economists would tell us that the cost of a purchase is the monetary price combined with the benefit of ONLY the second choice, Schwartz argues that those presented with more choices will spend longer thinking about the potential benefits of each one – even after the economic decision is made. This, he says, makes us miserable, particularly after we have got used to the novelty of the new purchase – what he calls ‘adaptation’.
The book is polemic, well argued, and rich with analysis and detail. Chunked up into bitesize pieces of argument, Schwartz follows a logical progression from decision making comparisons in the supermarket, to the way we decide the course of our lives. Whilst I found the constant deviations into hypothetical examples of choice distracting and the overall didactic tone patronising, Schwartz has an unusual and convincing take on how we think about choice. Not only does he tell us that the assault of options and decisions are harmful, he challenges the premise that all humans are rational economic actors. He reminds us that we have emotions and we think in counterintuitive ways to protect ourselves from the omnipresent evil: regret.