[Ed. note – “Things Fall Apart (Part 3) – Politics” is the longest note I’ve written, and it could have been a lot longer because there’s just so much to say. In this and a few more Briefs I’ll share a few ideas that were left on the cutting room floor.]
|Bobby:||What do you mean you don’t make side orders of toast? You make sandwiches, don’t you?|
|Waitress:||Would you like to talk to the manager?|
|Bobby:||You’ve got bread and a toaster of some kind?|
|Waitress:||I don’t make the rules.|
|Bobby:||Okay, I’ll make it as easy for you as I can. I’d like an omelet, plain, and a chicken salad sandwich on wheat toast, no mayonnaise, no butter, no lettuce, and a cup of coffee.|
|Waitress:||A number two, chicken salad san, hold the butter, the lettuce, and the mayonnaise, and a cup of coffee. Anything else?|
|Bobby:||Yeah. Now all you have to do is hold the chicken, bring me the toast, give me a check for the chicken salad sandwich, and you haven’t broken any rules.|
|Waitress:||You want me to hold the chicken, huh?|
|Bobby:||I want you to hold it between your knees.|
|Waitress:||You see that sign, sir? Yes, you’ll all have to leave. I’m not taking any more of your smartness and sarcasm.|
|Bobby:||You see this sign? [sweeps all the water glasses and menus off the table]|
In the iconic diner scene of “Five Easy Pieces”, Bobby just wants to get a side order of wheat toast with his breakfast. Bobby has an entire menu to choose from, and the diner makes toast for sandwiches all day long, but it is impossible – despite a smart proposal of pair trades and long/short exposures that would isolate the wheat toast factor – for Bobby to get what he wants. Bobby has encountered a Hobson’s Choice, which is part of a more general class of games that includes ultimatums and dilemmas.
A Hobson’s Choice is when you are presented with what seem to be multiple opportunities for free will and free choice, but in truth you’ve been given a single option.
Bobby can have an omelet with a roll, or he can have nothing.
As the story goes, the original Hobson was a guy who rented out horses for the carriages of Cambridge, England in the 1600s … what was called a livery stable. It was a big stable with lots of horses that were theoretically all for rent, but Thomas Hobson gave his clients a simpler choice: rent the horse in the front stall or rent no horse at all.
You would think this sort of horrible bait-and-switch customer service would be a disaster, but you’d be wrong.
Attracting clients with lots of apparent choice and then giving them no choice at all is one of the most powerful and successful business models in human history.
Any customer can have a car painted any color that he wants so long as it is black. ― Henry Ford
I’ll make him an offer he can’t refuse. ― Vito Corleone
Oligarchs and mob bosses understand Hobson’s Choices really well. So do asset managers and financial advisors.
I wrote a long note back in 2016, also called “Hobson’s Choice“, about the ways asset managers and financial advisors create a “menu” of options for you that are really no menu at all. It needs some updating now that I’m no longer in the belly of the beast of an asset manager myself, but it’s still a pretty good read.
My point today, though, is that the use of Hobson’s Choice isn’t limited to business models. It is part and parcel of the modern political model, too.
Here’s my favorite punchline from “Things Fall Apart (Part 3) – Politics“:
Want your political party to put forward better candidates?
Then stop voting for the crappy ones.