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Hullabaloo


Thursday, June 30, 2016

 

Enforcing norms of reciprocity

by Tom Sullivan

Reducing human decision-making to a binary this or that choice turns humans into Flatlanders with no other dimensions to their thinking. So the rush to explain last week's Brexit vote as simple xenophobia or stupidity is rankling. (Don't get me started on the complaint that people voted against their best interests.) A flush of articles examines the human psychology that led to it.

Time magazine quotes Drew Westen ("The Political Brain"):

“There’s a very legitimate reason to be concerned about immigration,” says psychologist Drew Westen of Emory University. “Unfortunately ISIS has given would-be fence-sitters the permission to vote out of some combination of conscious or unconscious prejudice or bias.” That hardly means that pro-Brexit Britons acted out of racism; it does mean that people who do traffic in racism had more power to influence voters than they would have had in more peaceable times.
Writing for Scientific American, Julia Shaw cautions that the Leave camp mirrored Donald Trump's appeals to fear undercut the brain's ability for rational decision-making:
When pundits argue that people don’t need experts, they are actively trying to push you from using central processing to a peripheral approach. They are asking you to turn off your logic and turn on your emotion, because they know that it is difficult to use logic once fear takes over.

This is also why politicians like Trump and the Brexiters like to say they represent "ordinary people." Of course, "ordinary people" don’t exist. Even if they did, they'd be unlikely to be a billionaire or an old-Etonian who delivers speeches in Latin. Presenters of such arguments are trying to make you feel negative emotions against an imaginary opponent (usually the ‘elites,’ who also don’t actually exist), trying to get you to disregard evidence and logic.
"Very few people are stupid in any meaningful sense, and the British aren’t either," writes Thomas Hills at Psychology Today. Simmering anger at growing inequality gets his vote for why Leave prevailed:
People who are unhappy and angry often don't attend to the long-term consequences of their actions. Crimes of passion, by definition, lack the premeditated thinking-it-through that tends to keep people out of trouble. Still, crimes and emotionally driven actions are often the outcome of a history of emotional dissatisfaction. People don't just get angry one day and stab their partner. They get angry, and then they get angry again, and then they stomp their feet for a while, and then one day they get really angry and they happen to be cutting onions.

Working-class people in places with high inequality have been angry for a long time, perhaps since the dawn of work. The referendum on Brexit in the UK just handed the working class a knife and placed a blow-up-doll of the EU nearby.
But humans seem to have evolved a sophisticated sense of fairness that a growing body of research supports. Perhaps the most satisfying response to Brexit comes from Eric Beinhocker at the Atlantic:
People are what behavioral economists call strong reciprocators and altruistic punishers. Humans are wired for reciprocal cooperation: Do unto others as you would have them do unto you, I’ll scratch your back if you scratch mine, etc.
Beinhocker recounts experiments using the Ultimatum Game,
... in which one person is given some money (say $100) and asked to offer a share of it to another person (say $20). If the second person accepts the offer, both keep the money, but if he or she rejects it, both get nothing. The rational solution is to accept any offer except $0, as even $1 is better than nothing. But experiments on thousands of subjects around the world show that offers below around 30 percent are typically rejected, thus harming both individuals.
He explains, "People will sacrifice their own self-interest and harm themselves, even severely, to enforce norms of reciprocity." So the Leave voters have done in the U.K. So might Trump voters in the U.S. this fall, Beinhocker warns. (Or the Bernie-or-Bust crowd he leaves unmentioned.) The lack of accountability for Wall Street in the wake of the 2008 financial crisis coupled with unsustainable levels of economic inequality have created a vast, untapped market for enforcing norms of reciprocity.

From the time we are in the Terrible Twos (I want to do it myself!), people exhibit a need not just for cooperation, but some autonomy and control over their fates. Working people feel the economy and capitalism itself is failing them, that they are getting a raw deal and lack control their fates. Offer them less than 30 percent and they'll offer you a middle finger.

There is a reason Donald Trump and Bernie Sanders and Elizabeth Warren excite crowds. They have given voice to the complaints of the masses and convinced their respective audiences that they have been heard, that they have an advocate. People who know Hillary Clinton tell us privately she is a good listener. This is her chance to prove it publicly.

Beinhocker concludes:
The reason the Remain camp lost was that they didn’t understand the game they were playing. They thought they were playing a rational game, appealing to people’s pocketbooks and sense of security. They fought their campaign with facts and figures and by highlighting the risks of Brexit. But the voters were playing the Ultimatum Game. Leave understood this and fought with promises to “take back control.” Like the Remain campaign, Hillary Clinton is also playing the rational game, appealing to voters’ economic and security self-interest. Donald Trump is the weapon of the altruistic punishers.
I'm not as sanguine about their altruism as Beinhocker. Clinton and the Democrats risk selling into the wrong market if they're selling rational self interest this fall. That's not what working people are buying. They want an economic system that treats them fairly.