Shampoo, Property Rights, and Civilization (with Anthony Gill)

Anthony Gill: Thanks. Glad to be here. And, I love shampoo. I used it this morning.

Anthony Gill: Well, the answer is obvious: It’s the government, because the government writes these rules; these rules are put into books. The books are put into the deep recesses of libraries, and everybody can go see the rules of these property rights. That’s obvious. When I ask that of my students, they automatically turn to the answer: The government defines property rights.

Anthony Gill: Yeah, yeah.

Anthony Gill: Yeah, it seems very obvious. I actually have an exercise: I have my students–I strand them on a deserted island, a very typical trope within economics–have them build a society. And, I say, ‘Who is going to determine who gets to use what?’ And, their answer is, ‘Well, it’s the government.’ And, I have to ask them, ‘Well, who is the government, and how do we decide on how the government is? How do we decide how to decide?’

And, then, I also pause and ask them, I go, ‘Well, it’s obvious that the government defines property rights. So, when was the last time that you read the rules? You went to the Federal Register here in the United States, or to our regulatory codes in the state of Washington? When was the last time you read those and knew those?’ Nobody, nobody reads these things.

Anthony Gill: No. So, that’s the wrong answer. Well, it’s not–I shouldn’t say entirely the wrong answer. The government does define property rights, and it will take time to monitor, enforce them in certain circumstances. But, for the most part, it’s not the right answer.

Anthony Gill: Yeah. Well, first of all, you should lather, rinse, and repeat because that’s what the rule says there on the bottle, right? You don’t want to be violating any kind of rules here.

So, well, this is a little puzzle that has flummoxed me for a long time, and we can maybe talk a little bit later about why this puzzle started to eat at me and why it became an issue. But, I know many people go to hotels all around the world, and if you’ve been traveling for several decades, you’ll know that a lot of hotels provide you with these small, personal-use shampoo bottles. Conditioners; sometimes in the fancy restaurants, they have mouthwash. I love those things. I absolutely love them. I love them so much that I actually have a whole bin–and this is just one bin–of these little shampoo bottles. And, for those of you listening, I just held up a rather heavy bin of these little, tiny shampoo bottles. Absolutely fascinated by them.

However, it was a few years ago–maybe five, six, seven years ago–especially when I traveled out in California, that I noticed that hotels were not doing this anymore. They put dispensers on the wall. So, it was a large bottle; sometimes it was directly connected to the wall, sometimes they just put it on the ledge, they had a large bottle there. And, this irritated me because I love collecting these little bottles and taking them home. I use them on a regular basis. I don’t think I’ll ever have to buy shampoo for the rest of my life.

And it started–I had this kind of question here.

And, I was recently at the Stephenson Institute at Wabash University. I had stayed at the Liberty Fund a few nights before, and they had a hotel, or they put me in a hotel that had a dispenser on the wall. But, when I went to Stephenson Institute, they had little bottles. And so, I’m sitting there in the hotel room thinking about this, and I said, ‘Well, wait a minute. If I’m allowed to take these little shampoo bottles home,’–and, everybody knows that. I ask people, ‘Can I take these little shampoo bottles home?’ They go, ‘Of course you can.’ Everybody knows you can.

Anthony Gill: Yeah. And, I go through many rationalizations on this, too. It’s like food, like crackers at a restaurant. It’s that once they put them on the table, they’re contaminated, and they have to throw them out anyway, so I might as well take it home and use it.

I don’t know if that’s true or not, but it certainly is a good rationalization.

And I maybe should not admit this, but it’s even more addictive for me that at conferences, I will seek out the bald people and ask them, ‘Hey, you’re not using your shampoo. Would you mind bringing them down for me?’ So, somebody would think that’s horrible.

Anthony Gill: And, that’s the reaction I got. I raised this question to–we were at a small conference at Wabash, and the next question that I raised to them I think horrified them. The first thing is that we can take these little shampoo bottles home, right? They said, ‘Oh, of course, everybody knows that, everybody knows that.’ I go, ‘Well, can I take the large dispenser bottles home with me?’ And, they were horrified. They said, ‘Well, of course you can’t. No.’

You know, there might be one reason: The bigger bottles are 16 ounces, and you can’t get through TSA [Transportation Security Administration]. I said, ‘Well, I’ll check my bag. I’ll just put it underneath the thing so I can take that bottle home.’ But, they were horrified. They said, ‘No, no, no, you can’t do that.’ I go, ‘Why not? Why can’t you do that?’ Because, what’s the difference between–this is what, three ounces or so–and the 12-ounce bottle? It’s just shampoo, right?

Anthony Gill: That is correct.

Anthony Gill: And, I do that. Because, I am so addicted to these little shampoo bottles. I love containers–any kind of containers, right? So I admit I have a problem there. I will bring empty bottles, and if I know it’s going to be a certain hotel brand that did go to the dispensers, and I will fill it up. Especially if I like the shampoo: there are some hotels that I really like the shampoo. Other ones, not so much.

And people are shocked by this. They’re like, ‘Oh, my gosh, how can you do this?’ Well, I consider this–since these hotels started introducing these small bottles some 50 years ago or so–I consider it a right that whenever I pay the price of a hotel room, I should get at least three ounces of shampoo and conditioner. So, they were horrified. Who would do that?

Now, that horror–the horror, I guess, would be bemused horror. I wasn’t ostracized, but it was this bemused horror. But, it’s going to become important a little bit later, in terms of enforcement of property rights. But, yeah, that’s a good question. What’s wrong with me taking three ounces of shampoo from the dispenser and putting it into the small bottle?

Anthony Gill: Well, I’m going to stop and plead the Fifth Amendment right there.

Anthony Gill: Right. And, it’s not only that. I probed people more on this. Because, it started to get a conversation going. This was an early morning breakfast; people were still a little bit sleepy, and I started perking up people. When I asked, ‘Can I take the 12-ounce dispenser bottle?’ there was a rather esteemed political economist there who said, ‘No, you can’t. It’s illegal.’ And, I said, ‘Well, show me the law.’

Anthony Gill: Show me the law that says, ‘Thou shalt not take the 12-ounce bottle of shampoo.’ And again, it’s interesting to note that, because the fact that this person said it’s against the law immediately told me, ‘Ah. This person defaults to the government setting property rights.’

And I entirely acknowledge: yes, stealing is wrong. In fact, you go to the Ten Commandments, ‘Thou shalt not steal.’ Okay, now there’s codes in our government rule books that said this is a robbery, this is a burglary, this is a felony offense, this is a misdemeanor, etc., etc. But, I don’t think there’s one specifically related to 16-ounce bottles of shampoo.

And again, what’s the difference between three ounces and 16 ounces? Where does that line draw? If it was a five-ounce bottle, is it okay? If it’s 10 ounces? Where does this line get drawn? And, I think that was really kind of the interesting question that got a lot of people to start thinking about: Yeah, how do we define what’s stealing, and therefore, how do we define what’s property rights? Is it really the government that does that?

Anthony Gill: Yeah, that becomes a slippery slope for me.

Anthony Gill: I love that rationalization for being able to take 16-ounce bottles of shampoo home. And even a mattress. The mattress example that I give in the article was forwarded by the person who says, ‘Well, there’s a law against stealing the hotel stuff: you can’t take a mattress.’ And, my initial response stuff was, ‘Of course I’m not going to steal the mattress. It doesn’t fit into my carry-on.’

Anthony Gill: Right? So, it’s not practical for me to do that. And the person at the front desk is going to notice when you’re carrying a very large mattress or a television set out the front door of the hotel.

So, what you just said is, ‘Oh, I’m entitled to do that.’ So, ‘Everybody else is doing it. It’s built into the price, so why don’t I just do that?’

I actually don’t go that far. So, you are learning more about me, and so far you may have been a little bit horrified–bemusedly horrified–that I take bottles and fill them up with shampoo. But I am not such a felon that I go all the way to taking mattresses, or even the full 16-ounce bottles of shampoo. So, rest assured that I don’t do that.

There’s something there that’s stopping me. Right? And, this is really, I think, interesting. It connects to a lot of things that you’re interested in, too, mainly Adam Smith’s The Theory of Moral Sentiments. Where I know I’m in the hotel room, I could take a bunch of stuff, nobody’s going to find out. But, I don’t do it anyway; there’s something there stopping me. Right? There’s a self-monitoring aspect to all of this.

And I want to give one more example in the hotel room that just really horrified individuals, because it’s actually quite important here.

Anthony Gill: We were talking about shampoos; the conversation turned to mattresses. But, I said, ‘Well, what about toilet paper?’

Anthony Gill: You’re halfway through a roll of toilet paper. And, why can’t I take that home? That fits into my carry-on suitcase. And, again, everybody was shocked. Like, ‘Who would ever think of doing that? That is the most horrifying thing.’ And, I reminded them that during the pandemic in 2020, early on, toilet paper was at a premium. So, if you were traveling out somewhere, why not take an additional half a roll? It’s basically the same cost as a small bottle. But, there was just an abject horror that anybody would ever think of doing that. So I don’t do that. I’m not going to take–yeah.

Anthony Gill: I want to point out something that you just did when you were talking about the categorical imperative. You acted very much like a good economist. You thought, ‘Well, if everybody takes a number of grapes, then the price of grapes gets too high, and we don’t want a high price of grapes.’ So, you did the whole cost-benefit calculation there, and that was wonderful. That’s the great economic answer that I have my students think about when we think about collective action problems and free riding, and the tragedy of the commons. But, is that really the thought process that you go through? Why am I not taking all these grapes, or a handful of grapes? I think the answer comes down to: Because my mother told me not to do that when I was three years old, or five years old, and it was reinforced there. So, it was something that–not that there’s a calculation that we go through–

Anthony Gill: Maybe somebody did that calculation, but it’s just you were drilled from Day One, ‘Don’t take a handful of grapes. Don’t steal. Thou shalt not steal.’

And, it comes in a lot of different forms, right? You kind of learn. It’s: Well, you don’t take three or four grapes, but you also don’t take somebody else’s toy when they’re playing with it, or something like that. And, those things are what help to monitor us, but it also creates a certain [milieux? inaudible 00:23:15] that says, ‘In our society, it is not proper to do these things, and if you want to be seen as a propitious person–somebody who is concerned about propriety–then you should not be taking these things.’

And that starts to act as this internal brake upon us. It helps us to self-monitor, with the assistance of civil society reminding us constantly, ever since we were children, that this is how a proper person behaves.

Anthony Gill: And, if you want me to answer that question, I’m going to shrug my shoulders and say, ‘I’m not really so sure about that.’

As for where they come from? Boy, those questions get really murky. Our last episode that we recorded together many years ago on tipping, the question comes up, ‘Well, who started tipping?’ And, as far as we can know, it was sometime in the 16th century in Britain, but it’s really murky. These are things that just kind of emerge.

So, we talk about how prices affect economic allocation, and you get this emergent order that Hayek always talks about. But, these things happen, too, not only with prices and the allocation of resources, but with rules.

So, rules somehow emerge from there as well, and Hayek has written some really great stuff on this in Law, Legislation, and Liberty about the evolution of norms. And, we could talk about the evolution of norms, but where they come from, oh, boy, that’s really hard to know because they just kind of evolve. How do they work–?

Anthony Gill: And that’s a really important observation here that goes to the larger picture of what I was trying to get at–is that: If we just rely upon the government to define property rights, to monitor them, and to enforce them, we have a problem because the government can’t do that all the time. There are so many different opportunities where we go unmonitored, and we could get away with everything. So we need a strong civic society–a strong sense of trust and honesty within society–to make the economy work. It’s very, very important in those kinds of things.

Again, to go back to your question: Where does this come from, and how does it evolve? It’s a very interesting and mysterious question. To think about the issue of shampoo–and you got me thinking now that I’m a norm entrepreneur by telling people to take small bottles and fill them in a dispenser. Now I feel like I’m undermining Western civilization somehow.

Anthony Gill: If nobody can get a hotel room anymore because the price went up because Gill convinced everybody to swipe the shampoo, I’m going to feel a little bit horrible about that.

I don’t think that will happen.

But, when it comes to the evolution of these things, I always ask students–and I think this is a good exercise for students to do–to think about the origin of that norm. First of all, where did these small bottles initially come from? And, I said, ‘I’m going to be on EconTalk; I’d better do some background research on this in case Russ asks me when did this shampoo bottle thing start to occur.’ As far as we can tell, it was about 1970, in London, the Four Season Hotel started providing these. Why did they do that? Who knows? Somebody thought, ‘Hey, this would be a really nice convenience for people. They don’t have to bring a big bottle in their suitcase, which spills open.’ So, some entrepreneur had that idea. And then other people must have noticed it, so it started to build upon itself.

But then, the question becomes, who decided that you could take these bottles away? Because everyone knows–and I was told everyone knows–that you can take the small bottles home. Well, who was the first one who did that? And, how did that get communicated? Well, that becomes really an interesting question of how this happens. And again, it’s just little, tiny, ‘Oh, yeah, I brought this wonderful bottle of shampoo home, it smells really great,’ and somebody else said, ‘Oh, I could do that.’ The word just gets around. And then pretty soon, everybody knows. And, that’s kind of neat. That’s how a lot of our rules about property rights evolve. And it happens in every aspect of your life; we’re just talking about shampoo here.

I will ask my students sometimes, ‘Who owns the sidewalks outside the University of Washington?’ And, the answer is really easy: ‘Well, it’s the government. The government owns it.’ Or somebody will be a little bit more sophisticated and say, ‘Well, the government is we the people, so it’s public property and domain.’ Oh, that’s true, but you make claims on the sidewalk every so often. So, you’re walking down with a group of friends, three or four people, and somebody’s coming by in the opposite direction in a wheelchair. Now, who, quote-unquote, “owns” the sidewalk for that moment in time? Typically, what will happen in, I think, a well-functioning society–or at least one that I believe is well-functioning–is that we’ll move over to the side to let the person in the wheelchair pass.

There’s a norm about property use there. So, it’s a public domain property; it’s unspecified how it could actually be used, and we need to get outside of our mentality that there’s just one thing and it has one use, and that’s the property right of it. Different types of assets, or pieces of property, or things have different uses, and how we define those things is going to be determined a lot by the social norms in terms of this.

And, it’s kind of interesting to think about this, too. I used to do an experiment in my political economy class, especially when I had smaller classes. If I had a group of 20 students, I’d be in a classroom that maybe had 30 seats. And, on the first day of class, I would get in early, and I would put warning labels on some of the chairs, and then some security tape. Usually around 15 chairs. So, now, I created artificial scarcity. There are 20 students, and there are now 15 chairs. So, who is going to get these chairs is an interesting question. And, usually–I’m really sneaky on this–I would contact one student ahead of time and say, ‘I need you to help role-play something for me. I would like you to come into class late, and I’m going to give you a pair of crutches, and I want you to come in.’

So, 20 students will be in, 15 chairs are there. The 15 chairs will usually fill up by a very common property rule called first come, first served. The four students that come in after, late, sit on the floor/ And now comes in the person on crutches. And, I just sit there wondering, ‘Okay, what’s going to happen? Is somebody going to stand up and give the seat to the person who looks like they have a sprained ankle? Or not?’ I’m implicitly trying to look at what is the property rule that’s going on here. Do students who attend the University of Washington have a certain norm that says, ‘We will defer to the person who is injured, rather than our own selfish interest here?’ And, the results were interesting. Most of the time, nobody got up and offered their seat to the person.

Anthony Gill: They don’t.

Anthony Gill: The word that you used in there that I really love is flexibility. It’s flexibility in interpreting what the norm is and in punishing the violations of the norm there. And, this is why I love civil society and social norms as a way of doing this because, again, if we had to legislate and to litigate every single rule, wow, does that take up a lot of time, and people start fighting over these definitions. And, by the way, social scientists love very clear definitions, but at the end of the day we know that definitions have a lot of gray fuzziness around them. [More to come, 39:32]