Thoughts on Netflix and the supermarket cereal aisle
In his essay “In Search of a Free Market” in Comment magazine (published by Cardus, a Christian think tank), Brad Littlejohn of the Ethics and Public Policy Center proposes to answer the question, “What might it mean for a market to be free?” According to Littlejohn, the answer is not entirely straightforward because freedom, like beauty, is often in the eye of the beholder.
If the goal is to define or describe a free market, Milton Friedman, the most influential free market economist of the past century, is a good place to start. To Friedman, a defining characteristic of free markets is freedom of choice, as suggested by his famous phrase “Free to Choose,” the title of both his 1980 TV series and the book co-authored with his wife, Rose. Being free to choose has limits, however: People should not have the choice to bonk someone else on the head and take their wallet. As Friedman said, he wants the smallest, least intrusive government “consistent with the maximum freedom for each individual to follow his own ways, his own values, as long as he doesn’t interfere with anybody else who is doing the same.”
The idea of a free market that Littlejohn discusses in his essay is one in which “the most important economic freedom is that which multiplies and maximizes our choices.” Having provided this definition of a free market, he proceeds to reject it. While allowing that economic progress since the Industrial Revolution has given even those considered poor in modern economies “access to a range of goods and services formerly beyond the imagination of even emperors,” he argues:
However, beyond a certain point, more and more does not necessarily mean better and better. Ever-expanding choices may not enhance our freedom, since the mind can only meaningfully distinguish between a limited number of options.
Consider, for instance, Netflix, or the cereal aisle at a modern supermarket. At first glance, both of these epitomize a glorious realization of the modern idea of freedom. Here we find ourselves, more than any previous generation, or indeed any previous year, “free to choose,” as Friedman put it. The possibilities before us are nearly endless. But therein lies the problem. All of us are probably familiar with the experience of paralysis that can take hold in these situations and myriad others like them—a listless, restless, aimless browsing that becomes less satisfied the longer it looks and in the end picks a movie to watch, or a high-fructose-corn-syrup concoction to eat, almost at random. But, of course, randomness is the opposite of purposefulness, the opposite of free action.
Not at all. The consumer in a free market is not forced to pick his movies and cereal at random. Nor do most people at the supermarket buy their cereal at random or “almost at random.”
Importantly, even a consumer who picks a random cereal does not pick randomly when it comes to more important decisions — what car to buy, whom to marry, or which heart specialist to see. This suggests that the random cereal decision is not made mindlessly but deliberately: The consumer decides the cost of acquiring more information about each cereal is higher than the cost of choosing the wrong cereal. The decision to choose cereal randomly can be and often is a purposely made and free action.
Of course, faced with more than one choice, people often choose badly. Friedman’s view was that he has every right to persuade someone who is choosing badly to change his mind, “but if I can’t persuade him, do I have the right to force him?” His answer is, “No.”
And here we might imagine Friedman’s follow-up point: If the problem with being free to choose among more than one Netflix movie and more than one type of cereal is that people might choose randomly or badly, what is the alternative? To have the government decide what movies we watch and what cereal we eat? Or some activist somewhere?
In the case of movies, Littlejohn notes, consumers are pushed by “the almighty algorithm” to what Netflix thinks they might enjoy or to what Netflix wants them to enjoy. But again, people freely decide to subscribe to Netflix and to watch the algorithm-recommended movies. If they do not like the algorithm-recommended movies, they are not forced to watch them, and it would hurt Netflix’s bottom line because bad recommendations make unhappy customers. In a free market, it is in Netflix’s interest to build an algorithm that makes customers happy.
While Littlejohn applauds the improved products generated by the market economy — “I for one have no desire to go back to the days when indoor plumbing was a rare luxury,” he writes — he denounces “the most effective products” which “are those that create even more desires.” His examples include alcohol, nicotine, and social media, but the problem with his argument is that the widespread adoption of indoor plumbing was the result of a new desire being created. If nobody ever developed a desire for indoor plumbing, it wouldn’t exist at all, and if the masses of ordinary people never developed a desire for it, it would remain rare.
At bottom, Littlejohn’s attack on Friedman’s free market as “the false freedom of consumerism” is misguided and mischaracterizes Friedman’s philosophy. Milton Friedman idolized freedom, not consumption or even economic growth. In the fifth Free to Choose TV episode, grilled by an intellectual opponent on balancing efficiency, equality, freedom, egalitarianism, and other social objectives, Friedman replied that “my objective, my god if you want, is freedom. The freedom of human beings, of individuals, to pursue their own values.”
If we are searching for a free market, we have found it in Friedman’s definition, and that some people’s values might lead them to sometimes choose cereal boxes at random is not a strike against Friedman’s vision.