Bryan Caplan  

Would Arnold Support an RFPB?

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Education and Disruption... California: Land of the Free...
The world's competing faiths subscribe to mutually incompatible doctrines - including doctrines about how to avoid eternal suffering in the afterlife.  One of these faiths could conceivably be true.  But no more than one.  If there are X incompatible views, at least (X-1) are false. 

All of these incompatible faiths solicit money to stay in business.  So given Arnold's recent posts (here, here, and here) on consumer protection, I have to wonder: Would he support a Religious Financial Protection Bureau (RFPB) to protect the world's religious consumers from being ripped off?

Consider the three standards of consumer protection that Arnold has proposed.

1. Sophisticated firms shouldn't be allowed to take advantage of unsophisticated consumers:
This is a case of a sophisticated financial institution taking advantage of unsophisticated consumers, and I applaud the Consumer Financial Protection Board for doing something about it.
If you think of the major religions as "sophisticated," and individuals in search of salvation as "unsophisticated," it seems like Arnold should favor shutting down all or almost all major religions.  At least until they can prove their product works. 

2. Firms shouldn't be allowed to sell a product unless we "can imagine a set of preferences that would make you want to buy this product":
I think I have a test that would allow for some consumer protection without heading down a slippery slope toward paternalistic regulation. That test is, "Can you imagine a set of preferences that would make you want to buy this product?" If the answer is "no," then regulation is justified. However, if you can imagine a set of consumer preferences that would make you want the product, then regulation embodies paternalism and should be subject to libertarian opposition.
A key part of Arnold's argument seems to be that firms should only be allowed to sell a product if more than zero fully informed consumers would prefer to support it.  This suggests that we should shut down all false religions, leaving either one or none free to operate.  After all, who prefers to support a religion he knows to be false?  Even if regulators can't identify the one true religion, they would still be authorized to ban all the ones that clearly aren't true, like Pastafarianism.

Alternately, maybe Arnold means that firms should only be allowed to sell a product if any consumer with the best available information would buy it.  This might allow various competing plausible religions to remain in business.  But you could argue that the "best available information" includes two facts: (a) there are tons of mutually incompatible religions, and (b) people generally accept whatever religion they're raised in.  These two facts in turn suggest that the "best available information" is so inadequate that everyone ought to just keep their money - depriving the world's religions of virtually all financial support.

3. Firms should be allowed to sell any product as long as firms use a soft sell approach:
I would be ok with saying that people chose to spend their own money on these products if they picked them out of a catalog or brochure, or if they inquired about these products.
This does save the world's religions from outlawry.  But it effectively bans active proseletyzingNo knocking on doors.  No preaching on the street corner.  No offers to mail viewers a free copy of the Book of Mormon.

I suspect that most people will reject my analogy between financial products and religion: "Unlike financial products, no one knows what the true religion really is."  But this walks right into my trap.  Would the CFPB let consumers buy a product that no one knew to be beneficial?  I doubt it.  So if no one knows what the true religion is, why shouldn't a RFPB prevent consumers from frittering their money away on products without demonstrable merit? 

Am I saying that Arnold wants to abolish the First Amendment and start a massive government crusade against religion?  Of course not.  I'm confident that Arnold is a staunch friend of religious freedom.  But his principles of consumer protection - all three versions -  are inconsistent with religious freedom.  Anyone who believes in religious freedom has to defend people's right to spend their money foolishly - and the right of firms to cater to such people. 

I understand why Arnold is offended when firms part fools and their money.  But I don't understand why he strays from his usual policy of tolerating what offends him.  If you correctly perceive a product to be junk, don't buy it.  Tell your friends not to buy it.  Tell the world not to buy it.  But don't ask the government to ban it.



COMMENTS (32 to date)
ThomasL writes:
Anyone who believes in religious freedom has to defend people's right to spend their money foolishly - and the right of firms to cater to such people.

I think you meant economic freedom in that spot? You could make an argument from religious freedom to economic freedom without much trouble, as at the back of both is the religious concept of the essential dignity of man, but in this particular sentence it felt like a leap.

Peter H writes:

The hard sell approach used by Capital One wasn't just a hard sell, it was full-out fraud. They signed people up for the product and charged them for the product even when those people DID NOT AGREE. Perhaps not a majority, but a good portion of the sales of these products were outright fraud, which is a fully appropriate area for government regulation, including government regulation that involves handcuffs and prison cells.

If something like 20% of your sales of a product are criminally fraudulent, and you purposely design the sales system to make it impossible to tell which 20%, then it's reasonable to make you refund all of the customers for the product, and pay a hefty fine for your criminal activity.

David R. Henderson writes:

@Bryan,
One of your best, most tightly-reasoned posts ever.
@ThomasL,
No, Bryan meant what he said. He said and meant “religious freedom."

justin writes:

I think this misses two points:

1. You can practice religion without paying for it.

2. When people pay for religion, they aren't necessarily paying for truth. They may be paying for community or happiness or something else, so you can't objectively say they've been ripped off. This doesn't seem to apply to people who buy financial products.

David R. Henderson writes:

@justin,
When people pay for religion, they aren't necessarily paying for truth.
Many of them are. Because of that fact, all of Bryan’s reasoning goes through.

Matt C writes:

Purveyors of religion, at least most of them, are not deliberately scamming their customers. They actually believe in what they are selling. Your comparison is apt on a practical level, but not so much on a moral level.

What Arnold is upset about (I think) is organizations who are essentially running a scam on foolish people, with full knowledge that they're scamming, and who have just figured out a way to do it inside the bounds of the law.

I don't share his trust in regulators to fix the problem (which he did hedge somewhat, I'll note). I do agree with his concern about the targeting of the stupid being adopted institutionally and refined into a science. There may not be any good answer for this sleazy behavior, but let's at least acknowledge that it is sleazy.

Justin writes:

David,

My general point is that if you throw a utility function into the mix here, the basic problem would go away. Your utility may be high because you got what you wanted (truth) or because you obtained some other benefit (happiness, community, etc) from paying. If you want to argue it on a semantic level, you have a point. But as a utility maximization problem, it's clear the two are different. Maybe that's not what Arnold specifically said, but I would think he had something along these lines in the back of his mind.

But I still disagree that many of them are paying for truth. Christians in America could easily obtain a Bible for free (dollar wise, that is) and worship privately. Some do but most do not. Why not? I think because they're buying the other things I mentioned, whether they want to admit it or not.

Jim Glass writes:

Forget religion, start with the low-hanging fruit.

Have government ban astrology outright. Make charging for an astrology reading a federal crime.

When we finally get to religion, well, one of them *might* be right (I hate to imagine which) so our paternalism should be more modest.

Just impose a mandatory warning on all church solicitations: "Your contribution probably will be used to to promote false beliefs". Have it printed on all church contribution envelopes, have all church collection plates show a label stating the warning, require priests and ministers to state the fact when soliciting funds -- in writing for contributions above a minimal amount, etc.

There's no conflict with constitutional freedom of religion as I see it, as everyone remains free to believe any religion they want and to make any financial contribution to any religion they want -- only on the basis of being better informed! How can giving better information to consumers and the citizenry be against the Constitution?

How could Thaler & Sunstein not endorse this as top idea?

collin writes:

Bryan,

Who said that there is one true religion where all others are wrong? Isn't this system like one of the greatest Carlin jokes. Most wars are started because somebody had the wrong answer to the God question. Do you believe God? Do you believe in my God?

At one time, most Protestants and Catholics felt their version of Christianity was the blessed one and others were heretics.

CR

RRRoark writes:

The appalling ignorance of religion with which he begins casts doubts on his reasoning in the rest of the piece. Given that the roots of religion are in pantheistic animism, who is to say that a panapoly of religions isn't valid? I recall tales of jealous warring gods and I can't disprove that concept, even if it has fallen out of favour.

A good rule is when writing about YOUR subject is to avoid opining about subjects you seem to know very little about, particularly in your opening paragraph! Way to bury the lede!

Matt H writes:

I think Arnold is starting to realize that we are destroying the conditions that make our high-trust style of capitalism possible.

His argument for the government trying to ban the behavior he finds objectionable is not compelling, as Bryan and David rightly point out. I would love to see either of you take on Matt C's point "What Arnold is upset about (I think) is organizations who are essentially running a scam on foolish people, with full knowledge that they're scamming, and who have just figured out a way to do it inside the bounds of the law."

What are we to do as a society about bad actors, when their behavior shouldn't be legally sanctioned but is immoral. This becomes a bigger and bigger problem as a society gets larger and more diverse. In small community would could all shun the bad actors, but our societies extreme level of anonymity makes this impossible. (Yes we have no privacy, but there are too many people to remember that need your opprobrium for a society like ours to effectively punish them through voluntary measures.

The kind of rot is as big a problem as companies seeking government protection against their competitors, in fact its the same problem. It breeds cynicism and saps peoples drive to be entrepreneurial, instead people aspire to be con men.

Darf Ferrara writes:

I think PeterH, Justin and Matt H nail it. What religion offers is nothing like what Bryan thinks it offers, it is primarily voluntary, and Capital One committed fraud, or something very close to it.

I think that the bottom line is that if a man as cynical about government as Kling is believes that this was a worthy intervention then it probably is.

Jim Glass writes:

"What Arnold is upset about (I think) is organizations who are essentially running a scam on foolish people, with full knowledge that they're scamming, and who have just figured out a way to do it inside the bounds of the law."

Such scams and scammers should be stopped. Especially when they exploit the most vulnerable low-incomed and poorly educated. Surely we can all agree about that.

If government is good for anything it should be good for that. Let's start with the *biggest*, most obvious abuses first. Have govt stop the lotteries that collect hundreds of millions of dollars each year as a tax on the poor and uneducated.

Buy having government shut down those government-run lotteries ... ooops ... never mind. :-(

D. F. Linton writes:

It's one of the hardest things in life, to resist that feeling that "there ought to be a law". But its a slippery slope: if you conclude that your fellow men are incompetent to decide whether to spend a few dollars on what to you appears to be a worthless product, it's not too far until you wonder whether they are competent to raise their children or to vote to choose our nation's government.

Ben H. writes:

"Even if regulators can't identify the one true religion, they would still be authorized to ban all the ones that clearly aren't true, like Pastafarianism." Whoah, whoah! Pastafarianism makes no verifiably false truth claims. Unlike some religions I could mention. Pastafarianism is just as solidly based upon fact as any other religion. Indeed, that is the point of it.

Steve Sailer writes:

The German government has long tried to restrict Scientology's activities. I can't say that is too horrible.

John Fast writes:

Bryan wrote:

I understand why Arnold is offended when firms part fools and their money. But I don't understand why he strays from his usual policy of tolerating what offends him.
You also don't understand how Ben Bernanke managed to get corrupted by the system. I would bet money that the psychological basis behind one is the same as the other, and so if you figure out one you will understand the other. It's a lot easier for you to talk with Arnold than with Bernanke, so focus on that.

yet another david writes:

Arnold: "I think I have a test that would allow for some consumer protection without heading down a slippery slope toward paternalistic regulation. That test is, "Can you imagine a set of preferences that would make you want to buy this product?" If the answer is "no," then regulation is justified."

Bryan: "A key part of Arnold's argument seems to be that firms should only be allowed to sell a product if more than zero fully informed consumers would prefer to support it."

Me: No, Arnold's argument is in reality that, if he can't imagine a set of preferences that would make one want to buy this product, then regulation is justified. How can someone with less than perfect information (Arnold) presume to judge what someone with perfect info would think?

Beware the fatal conceit.

Lauren writes:

Hi, Bryan.

I don't think your argument to Arnold depends on your opening paragraph about religion. However, I strongly disagree with your opening paragraph's premise on its own merits:

The world's competing faiths subscribe to mutually incompatible doctrines - including doctrines about how to avoid eternal suffering in the afterlife. One of these faiths could conceivably be true. But no more than one. If there are X incompatible views, at least (X-1) are false.
The world's faiths--by which you seem to mean religions, organized or not--are not opposed to each other in a 0-1, true-false, one-dimensional fashion. Lots of religions can be simultaneously true without contradicting each other in any fundamental manner. Most faiths or religions, like countries, offer an array of precepts and consequences. The doctrine that defines a religion is not typically one-dimensional. Taking stances on an afterlife is not even a feature of some renowned faiths or religions, much less a single-minded or major feature on which you could contrast one religion to another.

Is there only one country that is perfectly right, offering the one and only best way? What do you say about seasteading, then? The concept of seasteading is not that there is only one way to do everything right and that that way will dominate and be the only success, but that there are possibly multiple ways to arrange societies that provide both stable and mutually commensurate arrangements for making the participants happy now and in the future. Sure, the worst arrangements will be driven out. But that doesn't mean that there is only one way that is right for everyone. The whole point is that there are alternative ways to achieve complexly multiple ends with complexly given and influenceable means.

As soon as you talk about "how to avoid eternal suffering in afterlife," you have already narrowed yourself to only those few religious faiths that consider afterlife at all, and after that you've limited yourself to those that posit suffering in afterlife as a punishment. That's already a small subset of religions. You've certainly ruled out considering my religion already, and that's not a trivial, unfamiliar religion.

Faithfully attending to the main precepts of one religion does not usually involve denying either the truth or possibilities attainable via other religions. It is not some simple matter of direct incompatibility, such as where one religion says: Either you like strawberries or you will suffer forever in the afterlife; and another religion says: Either you hate strawberries or you will suffer forever in the afterlife. How about a religion that says if you like strawberries you will attain a heaven of strawberries; and if you don't, no problem, but you will have to find a different path to the heaven of your choice?

Ken B writes:

@Lauren:
I think Bryan's point holds for the monotheistic faiths. You are right of course about there being other laxer and more tolerant forms of religion. But I think it is important to be aware of the mutual incompatibility of the major monthesitic faiths, and their common hostility to atheism. I will forego links on bombed churches, mosques, synagogues, temples, trade towers.

However Bryan's reasoning only requires that there be some such incompatible religions whose freedom Arnold would protect.
(I think you agree on this point.)

Ken B writes:

@Matt H: I like your comment very much.

This issue of how do we deal with miscreants who skirt the edges of the law actually has answer, but it is one we seem not to want to use.

The answer is being judgmental. Disapproval, openly and socially expressed, is a very effective non-coercive tool for discouraging and ending bad behaviour. We see it at work in a lot of places. But as a society we have been studiously teaching ourselves non-judgmentalism for the past few decades, in over-reaction to some of the prejudices of the past, and also as part of a (misguided) belief that we can write explicit rules to handle social interaction -- and trust them to government. We need to retreat from that a bit.

So Ken B are you saying that the path to using shame to control Cap-1 passes through the portal of politely but openly expressing disapproval of stuff like Jerry Springer guests, Scientology, and Intelligent Design? I am.

Lauren writes:

Hi, Ken B.

Well, actually, I commented because I do not think Bryan's point holds even for the major monotheistic faiths. Specifically, in Judaism--surely one of the major monotheistic faiths of which you are speaking--there is neither any concept of eternal suffering in the afterlife nor anything like punishment for disbelief or choosing other ways of belief. In addition, those who believe otherwise are explicitly recognized and respected in all regards.

To be clear, though, Bryan's point to Arnold does not depend on the religious analogy with which Bryan starts. And it's only that starting point I'm addressing.

But I think it is important to be aware of the mutual incompatibility of the major monthesitic faiths, and their common hostility to atheism. I will forego links on bombed churches, mosques, synagogues, temples, trade towers.

Are you honestly suggesting that all monotheistic faiths are equally behind bombed churches, mosques, synagogues, trade towers?

And because they share a hostility to atheism--which I'm not even sure they share?!

You can't be serious.


Ken B writes:

@Lauren: If I read you correctly you are saying that Judaism does not have eternal suffering. So Judaism disputes what Islam says about this, and the path to eternal salvation. And what Christianity says too. That in other words, these 3 religions cannot all be correct on 'doctrines about how to avoid eternal suffering in the afterlife.'

Ken B writes:

Lauren:

Are you honestly suggesting that all monotheistic faiths are equally behind bombed churches, mosques, synagogues, trade towers?

No I am not. I don't want to wander too far off topic but I think in the modern world one particular religion stands out in this regard. But it was not ever thus.

And because they share a hostility to atheism--which I'm not even sure they share?!
Of course I am not suggesting a shared dislike of atheism is at the root of mutual hostility! I think you are simply misreading me here.

But we begin to wander too far afield I think.

Lauren writes:

Hi, Ken B.

No, that's not at all what I'm saying.

I dispute only Bryan's original premise that only one faith could conceivably be true. His argument is that all faiths necessarily present incompatible doctrines, so only one faith could be true.

My argument is that Bryan has over-simplified the multiple aims of even the most familiar of religions. Most faiths and religions do not condemn to eternal suffering after death those who believe otherwise. Of those few religions that do that explicitly, versus those religions that do not do so explicitly, obviously only one could be right on that particular score. But most religions don't get that explicit.

Judaism is merely an example of a faith that does not do what Bryan suggests. I do not know about what Islam suggests. Are you knowledgeable about Islam's views on eternal suffering for those who do not do as Islam requires? I'd be delighted to hear more from you.

Ken B writes:

Lauren:
In Islam the essential requirements are: accept Allah as the one god, Muhammad as his messsenger, the Book (Koran), and the Last Day. Some Koranic passages also suggest you need to lead a virtuous life. Some hadith suggest you really only need Allah and his prophet. So while there is variance there are a couple constants. Islam condemns those who do not accept Muhammad as the final prophet. This includes Jews and Christians. 'People of the book' are granted - compared to polytheists or atheists - certain conditional protections on earth under Muslim rule, but this protection does not apply in the afterlife.

Bryan does not imply Judaism condemns non-believers to eternal torment; he implies it disagrees with other religions, some on this topic.

Ken B writes:

Lauren:
In Islam the essential requirements are: accept Allah as the one god, Muhammad as his messsenger, the Book (Koran), and the Last Day. Some Koranic passages also suggest you need to lead a virtuous life. Some hadith suggest you really only need Allah and his prophet. So while there is variance there are a couple constants. Islam condemns those who do not accept Muhammad as the final prophet. This includes Jews and Christians. 'People of the book' are granted - compared to polytheists or atheists - certain conditional protections on earth under Muslim rule, but this protection does not apply in the afterlife.

Bryan does not imply Judaism condemns non-believers to eternal torment; he implies it disagrees with other religions, some on this topic.

Lauren writes:

Hi, Ken B.

Well, what Bryan said was

The world's competing faiths subscribe to mutually incompatible doctrines - including doctrines about how to avoid eternal suffering in the afterlife. One of these faiths could conceivably be true. But no more than one. If there are X incompatible views, at least (X-1) are false.
Since he claimed that at most one of these faiths could conceivably be true, but no more than one, Bryan's the one with whom I'm arguing. Not to mention that he gets specific that his description of what defines a faith is that it includes doctrines about how to avoid suffering eternally in afterlife. So, if even one faith doesn't fit Bryan's characterization of the world's faiths, I think this particular paragraph of his argument is toast.

I appreciate your expertise on Islam.

Ken B writes:

@Lauren:
I take your point but Bryan is talking (I think) the totality of the doctrine, which comprises many claims not just one assertion about salvation. So like the Emo Philips joke about two men on a bridge, there will eventually be some elements of the doctrines that are incompatible. It need not be the 'well then you're damned' part, it could be the which-end-of-the-egg-is-it-righteous-to-eat-from part.

David R. Henderson writes:

@Ken B,
I just read all the Emo Philips jokes. They’re hilarious.

Ken B writes:

@DRH: I concur! Glad you liked them. I saw him tell the bridge joke on Carson and have been a fan ever since. They're even funnier when he tells them. [Note to younger readers. 'Carson' was a form of technology similar to Youtube that preceded the Mac.]

yet another david writes:

@ Steve Sailer:

The German government has long tried to restrict Scientology's activities. I can't say that is too horrible.

Yes, the German government interfering in religious activities - what could go wrong?

In other not unrelated news, home schooling is still illegal in Germany (after originally been made illegal by Hitler).

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