No One Makes You Shop at Wal-Mart
By Tom Slee
Between the Lines, 2006; 240 pp.; $24.95

In 1776, moral philosopher and political economist Adam Smith in his tome, An Inquiry into the Nature and Causes of the Wealth of Nations, came up with the famous concept of the invisible hand of the market. For anyone who was sleeping through Economics 100, what he meant was that through the pursuit of self-interest within a market framework, individuals inadvertently promote the general welfare of the society they occupy. This of course is a simplistic account of Adam Smith’s 18th century metaphor. Smith presented a far more complicated theory of markets that many of his present-day supporters are willing to admit, and yet mainstream economists and neoconservatives everywhere continue to preach a shallow faith in the market. It is this simplistic faith that Tom Slee’s book No One Makes You Shop At Wal-Mart, primarily criticizes.

For Slee, the proponents of mainstream economic thought argue that the choices individual consumers make in a market context automatically lead to the best outcomes. Referring to the neoconservative faith in markets and individual choice as “MarketThink, ” Slee writes, “In the world according to MarketThink, the combination of choice and the market is a mechanism for solving problems and improving outcomes…” Certainly, most people would be hard-pressed to argue in favour of limited choice and the inherently anti-democratic values that that implies. And at no point does Slee say that choice and markets are necessarily bad things; neither does his book read like an anti-capitalist rant. But what No One Makes You Shop At Wal-Mart effectively shows, is that in spite of the rationalizing of the neocons and their toady economists, individual choice operating within a market framework very often results in poor outcomes.

How could this be true? How could the market fail us?

Using game theory, Slee presents theoretical situations where “players” are given a set of choices designed to result in the best possible outcome for each player. Naturally, the players are expected to make the choices that will improve their situations. But as the Prisoner’s Dilemma, the most commonly used game in Slee’s book shows, “each player’s outcome depends on the choices of all participants.” That is, the choices of each player necessarily affect, negatively or positively, the outcomes for the other players. But the rationale of each player to play for what he or she thinks is the best outcome necessarily leads to all players being worse off had they not entered the game in the first place. The choices offered by the game, and by extension choice in the marketplace, are, in essence, false.

Even though the scenarios presented in the games are massively simplified versions of reality, Slee makes the inescapable point that in the games, as in reality, peoples’ choices affect other people. When choices affect other people, externalities emerge. For the purposes of Slee’s book, externalities are measurable costs created through the actions of others that aren’t immediately paid for. For Slee, this is a situation that MarketThink irresponsibly ignores. Indeed, the MarketThink worldview wants to believe that people are isolated economic actors whose choices only lead to outcomes that affect them exclusively. Remember when arch neocon Margaret Thatcher brazenly declared that there was no such thing as society, rather only individuals and families? If it were only that simple.

The problem of externalities shows that choices are rarely, if at all, made in a vacuum. Take the example of an individual consumer “choosing” to buy an SUV. Let’s say that for this theoretical consumer, buying an SUV is the best possible choice he can make: it’s cool; it appears safe; it’s got a powerful engine. For this consumer, these are all measurable benefits. At the same time however, the choice to buy this SUV has measurable costs on other people: it takes up more space on the road; it consumes more gasoline; it contributes to a greater degree to air pollution. All of these costs are external to the initial purchase, and yet are very real and, moreover, not immediately borne by our theoretical consumer.

Perhaps SUV’s are an easy target, but it is clear that the coincidence of markets and choice are not providing a positive outcome here. MarketThink would have us believe that we are automatically better off given an array of choices within a market framework. But as Slee writes, such an assumption is both unrealistic and totally misleading:

MarketThink is a simplified picture of the world in which choices are independent of each other, and in which the link between choice and outcome is simple. But once we acknowledge that tangled choices are ubiquitous, then it follows that we must use a picture that includes externalities if we are to avoid being misled.

Slee’s reliance on game theory may come across as sterile and superfluous to some readers – he writes at length in dry technical prose on the artificial scenarios he has created. Readers may be left puzzled why he does this when there are dozens of examples from the real world that demonstrate the fallibility of the market. However, in his use of game theory, Slee seems to be adopting the discourse of the proponents of MarketThink. By wielding the same set of rational principles, that is, by referring to the cold logic of numbers, Slee undermines the basic assumptions supporting market forces and shows them to be at best simplistic and not a true accounting of the world at all.

Adam Smith would be impressed.