Mises Daily

Utopianism versus Rationality

        How rational is the rational animal? In a column entitled “Vudu Lives (Outside the Box),” David Pogue, the engaging technology reviewer for The New York Times, inquires about some apparently perplexing failings of human nature.

     We like to think of ourselves as rational creatures. But if that’s true, why do we eat stuff we know isn’t good for us, fall for people who treat us badly and text while we drive?

         And for heaven’s sake, why is the movie industry so determined not to make money? Hollywood executives seem determined not to sell what the world really wants: any movie, any time. DVDs are “any movie,” but not “any time.” Movies from the Internet are “any time,” but not “any movie,” thanks to the industry’s self-defeating system of rights and availability windows.1

           Pogue’s comments are tongue-in-cheek, tossed off as a way of easing into the real point of his article. But such sentiments are repeated often by critics of human beings or of the markets and other patterns of social order human beings create, and in a more hostile and serious way. So what do these sweeping conclusions mean? Are they reasonable?

           It is easy to agree that human beings are not “rational creatures” if being rational means always doing the most sensible thing with respect to all relevant short- and long-term considerations as integrated and judged by a mind with infallible judiciousness assessing matters from afar. This earth is not a Platonic realm of perfect ideal types, however. In our realm, to be a rational animal is to be a creature with a conceptual faculty who can exercise reason or not, mistakenly or not, from good motives or bad motives. To be a rational animal means only that human beings intelligibly employ means to achieve ends with a level of awareness and capacity to choose among alternatives not possible to lower animals; it does not mean that human beings must always choose conscientiously and well. Using our power of reason, we sometimes do pursue ends in a self-defeating way—perhaps in a way well-suited to the achievement of a particular goal, but unsuited to the achievement of another, more important goal not kept in mind as clearly at the time of decision. On the other hand, a decision that seems unreasonable to a distant armchair arbiter may in fact be the best one available to the decision-maker given his goals, resources and constraints.

           Let’s consider each of Pogue’s questions in turn, even if they were intended to be the rhetorical type that nobody is expected to answer. (Why do people ask rhetorical questions? Why?)

           1) Why do we eat stuff that we know “isn’t good for us”?

           Perhaps because we experience the not-good stuff as being good for us? If you eat a candy bar even though you know (or remember that you were told) that it’s not as good for you nutritionally as fruit salad or tofu, does that mean that the candy bar is not good for you at all? After all, it tastes good. It supplies fuel that the body can use. If you were on the verge of starvation, you would have good reason to welcome the sudden availability of a candy bar.

           Candy-bar eaters weigh the obvious immediate benefits of consumption against the small and not-so-obvious risks that the consumption will contribute to physiological malfunction at some unknown point in the future. We may infer a difference in willingness to attend to personal health between a person who eats one candy bar a day and a person who eats twenty candy bars a day despite the latter’s awareness that it is making him fat; and we may believe correctly that if he were more disciplined in pursuit of his ends, his life would be better. But we expect persons whose faculties are intact to tether means to ends in some intelligible way consistent with human nature. Would a typical snack-gobbler who prefers a candy bar to fruit salad choose a candy bar over fruit salad even if he knew that the candy bar is laced with cyanide? The irrationality of a bad-food eater would be most evident in the case of a person with no desire for suicide who elects to gobble a poisoned candy bar that he knows to be poisoned simply because he longs for the taste of chocolate. But such a case is extremely unlikely and perhaps has never occurred at all. Nor would anyone in possession of his faculties jump off the edge of a cliff solely in order to reach a bag of Doritos visible in the rocks hundreds of feet below. No one would do it even to try to disprove the assertion that no one would ever do it.

           2) Why do we fall for people who treat us badly?

           Details of particular cases are even more relevant here than when evaluating eating of bad-for-us food. Perhaps a person unlucky in love harbors a masochistic desire to be punished in a relationship. Perhaps the prospect of being treated badly isn’t what he finds appealing in another, but it ends up being part of the package and the mistreated one decides to stick it out for other reasons. Certainly a person can undercut his long-term best interests by remaining in a relationship he knows to be destructive. In The Portrait of a Lady, Henry James dramatizes the plight of a woman whose worst sin before being married seems to be naiveté; and who remains in a bad marriage for reasons having little or nothing to do with regard for her husband. Why persons fall in love even in healthy ways is something of a mystery, but the ineffableness of romantic attraction has more to do with the subtleties, complexities and uniqueness of individual human beings than with any inherent tendency to pursue ends by unsuitable means.

           3) Why do we text while we drive?

           Is the question about sending text messages from our cell phones while driving and also running a red light at a busy intersection as children are running across the street in front of our cars, which does seem a bit unhinged? Or is it about texting because voice service is unavailable as we are driving on a lonely country road with no other vehicle in sight right after having received a text message asking whether we’re going to make it to the hospital before Joe dies? Many kinds of attention-dividing conduct have been implicated in accidents. But not every incident of multi-tasking or permitting oneself to be distracted while driving helps bring about an accident. Perhaps sending a text message while driving is not obviously irresponsible or unreasoning in every case.

           4) Why do Hollywood executives “seem determined not to sell what the world really wants: any movie, any time”?

           Maybe because technology, distribution channels, contracts, partnerships, and copyright considerations do not automatically combine into a transcendent all-satisfying seamlessly coordinated unity without any time for the relevant plans, pathways, policies and innovations to develop and gel?

           Pogue also asserts that the movie industry’s “system of rights and availability windows” is “self-defeating.” But would it really be just as feasible to make expensive, hard-to-produce movies if they were also available on DVD-Internet-hotel-room-anywhere just as soon as they reach theaters? One can imagine scenarios in which this might be so, but is it necessarily “self-defeating” to fail to accomplish the transition to such a putatively optimal state of affairs faster than the current state of affairs permits?

           What economists call time preference affects how we spend our money and what we spend it on.2 All other things being equal, we prefer to enjoy a particular good in the present than in the future; otherwise we would have no motive ever to enjoy any good in the present. Our willingness to forgo the present enjoyment of a desired good in light of current circumstances and the prospects for future enjoyment of that good varies widely. A person with a “high time preference” for seeing a movie with a favorite actor that has just reached theaters might gladly spend $8.50 to watch it now rather than wait a few months to see it on DVD for $2.50. If both options were available simultaneously for a new movie, at least some prospective theater-goers would be inclined to choose the cheaper and faster option and forgo the delights of the big screen. The question for investors is whether there would be enough purchases of the cheaper option by persons who would not have gone to the theater anyway to make up for the loss of theater revenue. (The costs of now-easier piracy of new theatrical releases would also have to be factored into financial guesstimates.) The answer may vary widely from film to film. But most or all major studios currently believe that making their movies immediately available on DVD would substantially reduce the profitability of initial theater runs. If such a conclusion is not obviously deranged, it is not too hard to understand why the time that elapses theater release and general DVD/Internet release has yet to reach zero, even though it has shortened over the years in response to market forces. Studios are not confronting two different general levels of definite, guaranteed future profits and stubbornly clinging to lower profits just to thwart the voluptuous dreams of the consumer.

           In any at least somewhat free market, attempts to satisfy costumers more profitably are ongoing, and it may take only one daring and successful entrepreneurial decision to engender a sea change in how business is conducted across an industry. A striking example is Google’s introduction of the free online email service Gmail in 2004.3 The amount of free storage in a Gmail account began at one gigabyte, whereas most free email providers had until then supplied only a few megabytes (roughly speaking, the ratio of megabyte to gigabyte is a thousand to one). After Google’s introduction of Gmail, other providers of free email quickly began offering much higher storage capacities as well.

           In the market for cinema, there may be many means of better satisfying the desire for movies anytime-anywhere without impairing the profit potential of an initial run in theaters. Producers might, for example, simply charge much more for a download or DVD of a movie that is still in theaters than they do for DVDs of a movie that has left theaters. But perhaps, instead, theaters will disappear. Down the road, in 2037 perhaps, it may be that movies will only rarely be shown on the big screen any more, because it will have become possible to very cheaply emulate the theater experience at home. But the fact that a solution perfectly satisfactory to all parties has not already been achieved as technologies, understandings of risks and possibilities, and business arrangements continue to evolve and be debated is neither mysterious nor evidence of the “irrationality” of any economic actor or group of economic actors not blessed with omniscience and omnipotence.

           The coordinating effects of markets and the innovations that markets promote are wondrous, but neither magical nor instantaneous. Complex markets are the result of myriad human beings voluntarily pursuing their interests as they themselves understand these interests—not as understood by a critic assessing from afar how well the resulting bounty serves a putatively laudable general goal without regard to the exigencies of all those interconnected but individual personal contexts.

           The purpose of Pogue’s article is to review a technology that permits instant downloading of high-definition movies for viewing on your television just as soon as they become available on DVD. It sounds like rapid progress is after all being made toward the goal of enabling consumers to watch any movie any time, anywhere—even if the economic arrangements involved are not shaped by a utopianism that neglects gritty details, and even if the economic actors responsible for generating these processes are less than “rational” in some aridly rationalistic and unrealistic sense. Human beings are neither automatons nor miracle workers. But we get things done, sooner or later, if we’re free to do them.

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