Legal holidays as a solution to a collective action problem

Many of my libertarian friends on Facebook are upset about the idea of possibly mandating store closures on Thanksgiving. But legal holidays are a pretty good solution to a collective action problem, and furthermore, there is no reason that they could not exist in ancapistan (although arranging them might be more difficult).

The fact is, however much we appreciate the market (and I do appreciate it, despite thinking it should not be the entirety of life), we all need breaks from the busyness of buying and selling. In particular, it is nice to have some breaks when (almost) everyone else does as well: that way, we can have things like family reunions over a nice holiday dinner. The difficulty comes in the fact that it only takes one defector from a general agreement that stores are closed on holiday X to begin putting pressure on every other store to open as well: after all, if they stay closed, they're losing sales to a competitor. Someone who buys a washing machine or a television set from my competition is unlikely to buy one from me the next day.

A solution to this collective action problem is to reach a general agreement that no one (or no one of some particular business type) will open for business on day X. This allows everyone a day devoted to family and friends.

Libertarians have many valid complaints about government action occurring in areas where it only makes things worse. But this is not one of those instances.

12 comments:

  1. Yes, you are right, but what should be done with transgressors? I would favour ritual humiliation rather than a fine.

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  2. I wouldn't call this a collective action problem because it depends upon all businesses seeing it as something to avoid.

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    1. What I mean is that I do not think a situation can be counted as a CAP if it isn't a negative thing for everyone involved. And I think the major chains (or their executives, at least) wouldn't mind being open 24/7.

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    2. Store execs care about profits. They stay open in order to increase them. But if everyone was closed on day X, there is no reason profits would fall.

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  3. I don't know, why is it necessary for all people to take a break from the market on the same days?

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    1. That is a very strange question, since the post says:

      "In particular, it is nice to have some breaks when (almost) everyone else does as well: that way, we can have things like family reunions over a nice holiday dinner"

      So it does not contend that "everyone" needs the same day off, but does explain why it's nice for many people to get the same day off.

      Did you actually read the post before asking the question?

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    2. Where did he mention anything about a "break from the market"? All he talks about is a day when stores can't be open.

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  4. I would question whether government action is really necessary to deal with this. There are many countries (including the U.S.) that do not have any legally mandated holidays. Yet we still have plenty of holidays where nearly everyone is off work. Granted there are some people who have to work even on these holidays (police officers, people working on the Macy's Parade), but inevitably you would have these exemptions even with a legally mandated holiday. And in general the sort of defection you bring up doesn't happen, as employees care more about having these days off than potential customers do about having businesses open.

    I can think of two exceptions. One is Black Friday. But I would argue that what we are really seeing there is the emergence of a new holiday, focused around the start of the Christmas shopping season (what can I say, capitalism is weird). Since shopping is essential to the holiday, stores do require people to work that day, same as you might be required to work Thanksgiving if you worked concessions at a football stadium.

    The other exception might be election day. Arguably, it would be good if people had the legal right to take this day off to go vote, which they don't now.

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  5. Is a collective action problem really a problem though if no one cares about it?

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  6. Mill gives a variation of this argument in On Liberty, Chapter IV: "Without doubt, abstinence on one day in the week, so far as the exigencies of life permit, from the usual daily occupation, though in no respect religiously binding on any except Jews, is a highly beneficial custom. And inasmuch as this custom cannot be observed without a general consent to that effect among the industrious classes, therefore, in so far as some persons by working may impose the same necessity on others, it may be allowable and right that the law should guarantee to each the observance by others of the custom, by suspending the greater operations of industry on a particular day."

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