Efficient outrage

Matt Damon put yet another foot in his already quite full mouth this week. In an interview with ABC, he was invited to discuss the reckoning of sexual harassment and assault in his and other industries. He decided, for some reason, to go to bat for the idea that not enough is being made of what he perceives as a gradation of harm across different manifestations of workplace misogyny. Implicit is an attack on those who would advocate swift and severe punishment for what Damon would have us believe are minor sins.

I want to make the case that textbook economic theory will firmly reject Damon’s line of reasoning. Outrage of the type that Damon describes is more than justified, it is efficient. The market and the law don’t have the tools to reckon with the full, true cost of misogyny. This market failure makes for fertile soil for institutions that force perpetrators and enablers to internalize some of those costs. Outrage-of-the-day culture invites a lot of criticism from those looking to score a cool, contrarian take, but it is smart economics.

Sloppy accounting

The mistake made by Damon and his ilk is a myopically, comically bad accounting of the social cost of workplace harassment. Those of us who would want to account for the secondary, tertiary… endless web of effects can see that the externality effect of workplace misogyny is broadly dispersed. This is Rebecca Traister’s point that this moment is not just about sex, but also about work. The immediate effect on the victim spirals out into a chilling effect on their career, the careers of others around them, the careers of others yet to come. It infects the environment and drains attention, energy, and motivation. It leads to missed opportunities and lost ideas.

The vulgarity of those who “well, actually” racism and sexism in workplaces is plain enough. But on this reading it is also just the selfish vulgarity of a person who won’t acknowledge external costs. The right accounting in a society considers everyone and everything, not just superficial, immediate effects on the parties involved. If you would rather not look too far, one suspects that maybe it’s because you’re benefiting from the status quo and you won’t have your bubble burst.

These external costs through time and in the commons of the workplace must be reckoned with. The trouble is that these are exactly the kind of imperfectly defined, broadly dispersed externalities that are the most resistant to precise institutional responses. They aren’t less real, but prices and litigation just aren’t going to be able to properly track them down.

The outrage machine

And so we build. The outrage machine, driven ever more furiously by the mob of social media, arises to deliver what other institutions cannot. To the social inefficiency of unpriced harm, it is an Elinor Ostrom-esque community-driven response. Where formal rules and institutions have failed, the culture is incentivized to take control.

This should, in theory, be great news for market purists in economics. Outrage is the ultimate Coaseian triumph. The discrepancy between private and social cost is so great that groups of people rise up to force the issue. We build with shame, ostracism, and collective punishment a market that demands a price for the poison that misogyny releases. And you can’t just pay to clean up the spill—you have to pay for the sickness.

The market will just ‘work it out’ after all!

Except, of course, that some market purists would consider outrage far too fuzzy to qualify as a currency. They might, just might, be the same kind of folks who would cloak their apologias for structural racism and sexism in the disguise of “science” and “rationality”, somehow managing to both see only and ignore what it right under their jaundiced noses.

(Here, as ever, by the way, economics has a way of tearing me apart. On the Light side, standard economic ideas, with enough imagination, can bolster holistic arguments. On the Dark side, those ideas are enslaved to the quantifiable and pecuniary, to head off the holistic arguments at the pass. Yikes!)

Extremely online

Why now, then? Workplace harassment is no newer a problem than any of the other injustices that the outrage machine feeds on. Again, standard theory has our back. The benefits of crushing injustice are as dispersed as its costs, so action takes a lot of coordination. Not only does a boycott or pressure campaign need numbers to be effective, it also needs the momentum of public, demonstrative numbers to grow and persist. Social media makes this possible.

That’s not to deny the herd effect (itself a fascinating informational externality) in social media outrage. Online mobs are powerful. Who’s to say that the outrage machine isn’t pushed too far? That what is at first an efficient push on an unbalanced scale becomes a crushing weight that destroys the scale and everything else in its path?

In the case of #MeToo, the charge doesn’t stick. The fact that we have seen sustained, wide-ranging, thoughtful outrage should make us more and more confident that this is not some overreaction that we have to recalibrate, no matter what Matt Damon would have us think. Outrage, protests, and boycotts that have the true accounting on their side will sustain and prove themselves in their sustainability. Let’s also hope that the communities that form around these institutions also sustain. Maybe the solidarity can also be part of the mitigation that the communities form to do.


Welfare economics in general begins from the dilemma that one would like to think not just about what people prefer, but about how much they prefer it. How could you compare my intensity of feeling to yours? Pulling the voting lever or shunning a product are coarse, binary actions. Speaking out, protesting, supporting—these ramp up the stakes and show that intensity of feeling; one way to check if majority rule passes a utilitarian test is to see if the minority is in the streets.

This intensity, this gulf between consequences and justice in the case of endemic misogyny, is being revealed. Will we start to see this undeniable intensity reflected in society, revealed by the outrage machine but then breaking free from it?

It’s exhausting to be outraged. It’s exhausting to fight and call your representatives and protest and boycott. Maybe what comes next is that by some act of grace our institutions may begin to change. If there is some benevolent, empowered decision-maker out there, it grows harder and harder for them to miss the intensity of feeling and harder and harder for them to miss its implications. If one of us becomes that person, maybe we’ll remember too.

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