The Unnecessary Complications of Everyday Life

Today I managed to save 900€ over the next year by switching gas contracts, which for a three minute phone call, even after twenty five minutes on hold, isn't a bad half hour's work, certainly more than my usual hourly rate¹. But I'm not happy about it - because it's something I don't think I, or anyone else, should have to do; this annual make-work to dodge artificially inflated prices to try and catch people out. Regardless of what I pay, it's the same gas coming out of the pipe.

There are many examples of administrative tasks that are unnecessarily complicated, but mandatory, and if you don't do them 'well', there's normally some pretty negative consequences. If you're lucky those negative consequences are only financial ones you can afford to pay. Broadly this comes in two forms; and many tasks contain both, with the first being used to mask the second.

First, there are products or services that are complicated, and have thousands of professionals working on them every day, making more complex and nuanced versions. Here I'm thinking of things like taxes, insurance or any kind of financial service - perhaps investment choices or deciding on a loan.

These things are complicated, often because they try to catch many kinds of edge cases and need to be legally very precise. The issue is that while many professionals have time to deal with these precise and narrow definitions, and what exactly it means; but you're an amateur, trying to make these choices between all the other things you have to do in your life, like work, look after children, cook, clean or perhaps sleep?

In many jurisdictions there are laws to protect consumers to some extent, but anyone who has ever tried to skim-read the first few paragraphs of small print on any kind of insurance will realise is: you have no idea what would actually happen if you try and use it. Plus consumer protection doesn't save you from trying figure out how to correctly fill out your overly complicated personal tax return that uses expressions you won't find anywhere else (I'm looking at you, Germany).

After the complicated and managed by professionals type, there's also the category of things that are made complicated in an effort to confuse consumers; to make it hard to understand what you're getting, and to compare choices. That certainly feels like an information asymmetry where you, as the consumer, are not in a position to make a good choice, and so you end up spending more than you need to.

Things in this category include choosing utility suppliers, phone contracts or train tickets. There's going to be some argument here about letting these services 'innovate' by coming up with new pricing structures to attract different kinds of customers, but I'm not sold on that. Mostly these 'innovate' pricing schemes just come down to making something very complicated and inflexible: off peak return, non-refundable, bought a minimum of 30 days in advance and can't be changed - that's not innovate, that's restrictive. So to get a 'good deal' you have the administrative penalty of understanding a new set of complex restrictions, doing nothing to make the service really cheaper or accessible².

So, here I am, a white guy in northern Europe, with a fixed abode, job and university degree complaining about personal administration; quit moaning!

That's a long list of advantages to have, and perhaps I'm just somehow incapable in a way that most people aren't³, but I find trying to do and understand all of these things hard, even with all those advantages.

The point is that these things, if they're effectively mandatory, shouldn't be hard for the 'average' person, the should be very easy, and they should be easy for someone who has more adverse circumstances. They should be easy for someone who works two jobs to make ends meet and doesn't have time for anything else, for someone whom the local language isn't their first language and most obviously for elderly people who aren't as sharp as they used to be - as that's something that will come for all of us if you're lucky to live long enough.

While I'm just complaining about the time and effort this takes, it also causes real harm. There are lots of examples where being poor means things are needlessly more expensive; e.g. utility bill prices are higher if you pay cash than if you have an automatic monthly debit. This is a different type of 'paying more', where not having the time, or experience, means you're punished by not choosing the best option, or maybe any option.

What would help is that for anything that's mandatory, the process has to be so simple that everyone can participate, and those with more time, or the money to pay someone else to deal with it, have a smaller advantage; e.g. if you have enough money you can pay accountants to create clever tax avoidance schemes - but if it's simple, there's no point.

With Insurance there should be some kind of 'standard policy' in each segment, that way if you understand it once, all you need to do is compare on price, and not worry about which contents insurance does or doesn't cover broken windows, bikes locked up away from the house or household appliances.

For those of a strong free-market persuasion; I think this better form of comparability would lead to much stronger competition. It would also save companies time in their own employees navigating the labyrinth of conditions - maybe you can make the product cheaper as you don't need as many people to administer it?

So that's why having to play this game of changing gas supplier every year or two, or insurer, and hunting for the check boxes in the lower options, makes me sad and angry. Anyone who doesn't have the time, or capacity, to play along with these schemes will then be worse off than those who do. Perhaps there are people who enjoy figuring out these convoluted processes, but I suspect very few, and those who do probably enjoy chasing a bargain more then they do understanding the complex details of their travel insurance. Even if the thing you'd be rather doing is playing with your children, or sleeping, I think that's a fair want, that shouldn't be costing you a lot of money.