In the Yucatan, we stayed at several all-inclusive resorts. These resorts were a good fit for my family: When you’re travelling in a Third World country with four kids during a pandemic, you want a convenient supply of abundant and tasty food – and enough variety to please each and every picky eater. (Me included). Since portions were smallish, we routinely ordered 12-15 dinners for dinner, all at zero marginal cost. At least in Mexican resorts, tips are appreciated but not expected.
Economically speaking, there’s a straightforward win-win case for these Mexican resorts: Not only do they make the tourists happier; they make the Mexicans happier by providing them with better opportunities than they have elsewhere in the Mexican economy.
If you reconsider this verdict through the distorted lens of Social Desirability Bias, though, a radically different picture appears before your eyes. Once you forget economics, you could easily describe the resort experience in the following sordid way:
A bunch of rich foreigners show up in a poor country and take advantage of the locals’ desperate poverty. The foreigners relax in the sun and stuff themselves on fried fish and castacan (mmm… castacan) while the poor Mexicans wait on them hand and foot. The Mexicans toil long hours for low pay while the rich foreigners cavalierly order margarita after margarita, tequila after tequila. The rich foreigners don’t even bother to pick up after their fat, lazy selves: Every day, poor women of color clean their rooms and make their beds. Most of the foreigners treat the workers like inferiors, with a typical attitude somewhere between demanding and rude. Yet no matter how rude the guests may be, the impoverished workers are required to kiss up to the guests. Expressing warmest regards for foreigners who have never spent a single day in poverty is in the job description. And at the end of each meal, the workers can’t even count on a tip.
Now suppose Mexican law prohibited such resorts, and you wanted to end the ban. Just imagine how easily the defenders of the status quo could demagogue! These resorts allow rich foreigners to exploit poor Mexicans! They are an affront to decency! To dignity! Why should we let rich foreigners gorge themselves while innocent Mexican children go to bed hungry? Mexicans deserve good jobs, not this basura!
The result of this demagoguery, naturally, would be to prevent Mexicans from bettering their condition. “Bettering” – what a great concept! It captures the idea of improvement without falsely promising that the end result will be good in absolute terms.
The key economic point: Banning resorts saves no Mexican children from hunger. Banning resorts would rather cause Mexican children to be hungry, by depriving their parents of the best jobs they can get. The reason why Mexicans toil in all-inclusive resorts despite all the obvious drawbacks is that their other prospects are worse. Often much worse. Just talk to the guy desperately peddling straw hats on the beach.
At this point, it’s tempting to enthuse, “Let’s just have a dialogue about this.” The demagogues have their view; economists have theirs; let’s try to reach a consensus. To this, I once again say: “Dialogue? We don’t need no stinkin’ dialogue!” Dialogue hands Social Desirability Bias a massive home-field advantage. Far better to let observed choices prevail over mere words.
Still, how can rich foreign tourists be happy at their resorts? Truth be told, the vast majority are, like almost all human beings, selfish and oblivious. And that’s largely for the best. If the tourists’ consciences pained them, their main reaction would be to stay home, not come and tip generously. What about me? I may be just as selfish as the rest of the tourists, but since social science is my life, I can’t be oblivious to any social world around me. What keeps me feeling comfortable, honestly, is the faces of the workers. Even when they’re off-the-job, most of them seem quite content. While I wouldn’t want to have their jobs, the magic of hedonic adaptation allows even humble resort employees to feel pretty good about their lives. That’s not just psychological theory; it’s observed fact.
The broader lesson: As I tell my kids at a young age, many things in life sound bad but are good. Rich foreigners living it up in the Third World is one of those things.
And the list goes on and on and on.
READER COMMENTS
Jonathan S
Dec 28 2020 at 11:08am
“many things in life sound bad but are good.”
Well said!
Mark
Dec 28 2020 at 11:24am
It depends on how broadly you look at the issue. You and the Mexican tour workers engaged in a mutually beneficial transaction that should definitely not be banned, but the massive inequality between people in first and third world countries is a problem, particularly because that inequality is largely the result of government policy, including the policy of first world governments. I completely agree that “exploitative” tourism should be allowed, but still find it uncomfortable and would like to reduce its prevalence and increase the workers’ wages and other working conditions through increasing development in third-world countries. If you don’t instinctively find the Mexican resort described exploitative, you can substitute desperate low-wage third-world sex workers and the argument is identical. So I would teach my kids not to feel guilty about engaging in “exploitative” tourism themselves, but at the same time oppose against restrictions by our government on third world economic development and, if they have enough money as adults to be financially comfortable and independent, to donate some of the excess to support third-world development.
Alex
Dec 28 2020 at 9:04pm
“but still find it uncomfortable and would like to reduce its prevalence and increase the workers’ wages and other working conditions through increasing development in third-world countries.”
Is this an example of social desirability bias?
Laron
Dec 28 2020 at 11:33am
If you took the references to Mexico and replaced them with Hawaii you’d accurately describe the dialogue here as well.
Philo
Dec 28 2020 at 12:03pm
Of course, the poor service workers in their poor country don’t have better prospects in part because of restrictive immigration laws in rich countries.
David
Dec 28 2020 at 12:37pm
More likely the restrictive, corrupt, and ineffective institutions in their own country.
Garrett
Dec 28 2020 at 5:22pm
But if immigration laws in rich countries were less restrictive, they could escape those institutions more easily
Anonymous
Dec 30 2020 at 2:17pm
“the poor service workers in their poor country don’t have better prospects in part because of restrictive immigration laws in rich countries”
Ah, but maybe the service workers in rich countries have better prospects because of restrictive immigration laws in those rich countries. With enough immigration we might all be poor service workers (I understand you would argue against- but open borders is certainly a radical and untried experiment [and please don’t talk to me about immigration policy centuries ago before human flight]).
Fazal Majid
Dec 28 2020 at 12:50pm
I’d be more concerned about health-conscious Americans making quinoa expensive, to the detriment of Peruvians whose staple it is, or the ridiculous bioethanol fuel mandate making corn expensive in Mexico.
Eric Larson
Dec 28 2020 at 1:10pm
Higher quinoa prices helps Peruvian (and Bolivian and Ecuadorian) farmers.
Eddie
Dec 28 2020 at 12:55pm
Are poor people poor because the rich are rich? Or, perhaps they are poor because the place they live in does not protect property rights that would allow for an individual’s labor to be converted into capital accumulation?
RPLong
Dec 29 2020 at 9:51am
I’ve had the good fortune to have stayed at several all-inclusive and not-all-inclusive resorts in various countries over the years. In my view, the all-inclusive resorts actually over-charge for what the tourists get for their money. I think it’s quite probable that profit margins at all-inclusives are quite a bit higher than they are at the competing not-inclusives in the same areas.
I mention this because I think it makes Caplan’s point even stronger. All-inclusive resorts are easy to demagogue but are actually extremely beneficial for the workers connected to them, even more so than the other resorts.
My personal travel advice is: Choose an all-inclusive resort if you’re in your twenties, if you have small children, if your primary vacation objective is food + drink + swimming pool, or if you absolutely hate planning the details of your trip when you travel. Everyone else would be better off doing a bit more legwork and getting a trip that is both less expensive and more memorable.
Cobey Williamson
Dec 29 2020 at 11:20am
Having uttered such “mere words” as these, I’m really not sure how you can consider yourself an objective thinker.
There is no greater fallacy at work in the world than that of observed choices. Nothing that follows from a disadvantaged position can be considered an “observed choice”. At best, it is, as you yourself point out, a least worst option.
Observed choice is a fine way to determine what items to put on the dinner menu at an all-inclusive resort (unless your family shows up, apparently). It is a pathetic methodology for organizing a global society.
Anonymous
Dec 30 2020 at 2:21pm
I frankly don’t understand anything you have said. How are observed choices “a fallacy”? What is a “disadvantaged position” and why does “anything that follows from it” not constitute an observed choice? Why is a “least worst option” different from an observed choice? Why do you call observed choices a “methodology for organizing a global society?” I would be inclined to say that society organizes itself and when people with imperfect understanding step in, things often get worse.
Charlie
Jan 11 2021 at 11:56am
interesting article about the pyramids & reconstriction
http://everythingcozumel.com/miscellenea/archaeology/shadow-stairs-story-mass-delusion/
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