The Myth of Choice_ Personal Responsibility in a World of Limits - Kent Greenfield [53]
At one level, this point is mundane. Even the most ardent free marketeer would acknowledge that some limits on markets are necessary. The most uncontroversial of these limits is an insistence on disclosure and truthful information. The price mechanism does not work if market participants can lie to one another with impunity, so anti-fraud laws and disclosure laws are a common market constraint. They are justified by arguments about choice—our market decisions are not genuine unless we know what we’re buying.
But it would be a mistake to depend on disclosure and anti-fraud requirements as a cure-all. Sometimes, information can be overwhelming, so more disclosure of arcane data can hurt as much as it helps. (The best way to hide a lie is to bury it in a mass of inconsequential truths.) Sometimes, disclosure is meaningless, especially if there is nothing you can do with the information. I seem to get disclosures from my credit card companies all the time. Do I do anything about them? No. Could I if I wanted to? Maybe, but probably not. I have to have credit cards to move through this modern world of ours, so my ability to opt out of a credit card agreement is subject to my ability to find another card with better terms. And given the market power of credit card companies and the lack of market power of most credit card consumers, that’s difficult. At the very least, it’s difficult enough to see that disclosure cannot be a panacea for lack of market choice.
In any event, lack of information is not the most fundamental constraint on choice that markets bring about. Let’s talk about a few others.
2.
I only knew one of my grandfathers, and he actually wasn’t one. Albert Carroll, whom my siblings and I called Abby, was my mother’s stepdad. He married my mom’s mother, Noona, about the time my mom started college. He brought stability and a tireless work ethic to the household, but also the gruffness and severity of a man who had worked his entire adult life as a coal miner. Starting when he was seventeen, he began each work day by riding a tram, conveyor belt, or elevator deep into the earth, where he dug the black ore that fueled the nation’s furnaces and steel plants. He never had another job.
One of my earliest memories is shopping with Noona at her small town’s general store, which was owned by Abby’s employer. When it came time to pay, Noona retrieved from her purse a booklet of coupons, emblazoned with the coal company’s name and various dollar amounts. She used the coupons to pay for her groceries and sundries. I asked about the coupons, and she explained to me that they were a kind of money that she could use only at the company store.
Only later did I come to understand that those coupons were what was called scrip, a medium of exchange often used in mining communities. The mining companies would pay the miners in scrip instead of cash, and the scrip was redeemable for goods only in stores owned by the company. Because of the closed system, the company could charge a premium for its products. If a miner ran out of scrip, he could ask for an advance on his wages, which was also paid in scrip. The system often drove miners deep into debt to the company: low wages paid in scrip, scrip used to buy overpriced goods from the company, loans from the company paid in scrip. This cycle created an obligation on the part of the miner to continue working to pay off the debt.
The problem of scrip was made famous in the United States by the singer Tennessee Ernie Ford, whose “Sixteen Tons” was the Billboard number one song in the nation for six weeks in 1955. The chorus went:
You load sixteen tons, and what do ya get?
Another day older and deeper in debt.
Saint Peter don’t you call me,