Exploring the Downsides of Market Efficiency

Reflecting on R. R. Reno’s book Return of the Strong Gods, and the Display Test described by Justin Tosi and Brandon Warmke in Grandstanding: The Use and Abuse of Moral Talk, it becomes evident that acknowledging the downsides of policies is crucial in evaluating their overall impact. While market efficiency is often lauded for driving innovation and resource optimization, it’s important to consider the potential negative consequences that may arise from this relentless pursuit of efficiency.

A prime example of market efficiency in action can be seen in the case of HarperCollins optimizing font formats and print layouts to reduce the number of pages and ink used in book production. This resulted in significant resource savings, showcasing the market’s ability to incentivize minimizing wastage. However, this same drive for efficiency can lead to detrimental outcomes, as seen in industries like animal agriculture.

One disturbing practice in the egg production industry is chick culling, where millions of male chicks are culled shortly after birth as they are deemed unprofitable for egg farming. While technologies exist to determine the sex of chicks before hatching and avoid this cruel practice, the cost implications lead producers to opt for the cheaper method of chick culling. This highlights a stark reality – if a slightly more efficient but morally questionable practice can save costs, market forces may drive its adoption.

Furthermore, the relentless pursuit of efficiency in the meat and dairy industry has led to widespread animal cruelty, as producers prioritize cost reduction over ethical considerations. Practices that inflict immense suffering on animals, such as confinement and inhumane slaughter methods, persist because they offer marginal cost savings. The market’s emphasis on maximizing output while minimizing costs can perpetuate these cruel practices, showcasing a dark side to efficiency-driven production.

As we contemplate the implications of market efficiency, it’s essential to apply the Display Test to our beliefs and policies. What policies do we support, and what negative consequences do we foresee as a result? By critically examining the trade-offs inherent in our choices, we can strive for a more ethical and sustainable approach to economic practices.

So, dear readers, I invite you to consider your own examples for the Display Test. What policies or beliefs do you hold, and what are the potential downsides that accompany them? Let’s engage in thoughtful discourse on the complexities of our societal choices and their ramifications.