I found this video on NPR’s ‘Planet Money’ intriguing. A young woman reflects on the cost of her wedding dress, which she’s obviously worn once. She recognizes that there is enormous emotional attachment to this garment, but there is something going on in terms of how much she spent; she just can’t quite put her finger on it. She eventually finds out that she probably over-paid by about $1200.
She believes she has been ripped off.
There are a few problems with this. First, no one needs an expensive wedding dress. Yes, we ladies like to dress up and look good – no more so than on our wedding day. But need? Nope. The decision to spend a bunch of money on a white lacey dress has more to do with desire and certain cultural and personal expectations than necessity.
Second, the young lady complains about ‘asymmetric information’; that is, she went into the dress-buying experience at the mercy of those selling the dresses. They all knew far more about labor, material, cost, etc. than she did, and she was just along for the ride. If they said the dress cost $2000, so it must be.
But clearly, she wasn’t at their mercy. AFTER she bought the dress, she went to a wholesale material buyer and a tailor, and got the low-down. Why didn’t she educate herself BEFORE buying the dress?
In Money, Greed and God, author Jay W. Richards says this:
“Free exchanges, by their very nature, will be viewed as winning exchanges by all parties involved. Otherwise the free parties wouldn’t be involved in the exchange….A free market is best for distributing goods, services and information, whether they are trucks, trumpets, or trashy novels. But the system doesn’t determine what choices people will make.
In other words, in a free market, one is free to be a bad consumer and/or a bad business person. But poorly informed or unethical personal choices are not the fault of the market. As Richards points out, “We shouldn’t expect the economy, free or otherwise, to instill virtue in people.”
Did this young lady pay too much for her dress? It appears so. She certainly looked attractive at her wedding, and the photos of this day, she is sure, will be lovingly preserved for generations. But emotions can make for immoderate desires, poor financial decisions – and really expensive lessons for consumers.