Tuesday, 21 February 2017

Politics is not rational



Hillary Clinton lost the presidential election because people are not rational. Except for racists and millionaires it would have been in the best interest of everyone to have voted for Clinton. But we are not rational, we do not always look at our best interests. Real humans are not homo economii.

That includes me. As a scientist it is my job to keep a cool head. I hope you will excuse me for thinking I do my job reasonably well. I like to see myself as rational, but naturally I am not, especially learning about the ultimatum game shocked my self-perception.

It is a very simple and pure economic game. Reducing a problem to its essence like this has the elegance my inner physicist loves. In the ultimatum game, two players must divide a sum of money. The first player has to propose a certain division. The second player can accept this division or reject it. If the offer is rejected both players do not receive any money. In its purest form, the experiment is played only once and anonymously with players that do not know each other.

Time for a short thinking pause: What would you do? How much would you offer as player one? Below which percentage would you reject the offer?


Initially, I wondered why economists would play this game. Surely player one would would offer 50/50 and player two would accept. But that was my irrational side and my missing economic eduction. A good economist would expect that player two would accept any non-zero offer: it is better to get something than nothing, and that thus player one will make the smallest possible offer. Reality is in between. Many people offer 50%, but many also do not. These offers below 50% are, however, also regularly rejected. Player two is apparently willing to hurt himself to punish unfair behavior. This game and many variations and similar games lead to the conclusion: humans are not purely selfish, but have a sense of fairness.

As a student of variability, for me the key aspect of the ultimatum game is its non-linearity. You either get something or nothing. In case of nonlinear processes, such as radiation flowing through clouds, variability is important. A smooth cloud field reflects more solar radiation than a bumpy cloud field with the same amount of water. The variability of the cloud water is important because the flow of radiation through clouds is a non-linear process.

By sometimes rejecting low offers, player two gets better offers from player one. This is especially clear when the game is played multiple times with the same players. In the beginning quite large offers are rejected to entice larger offers later in the game. How humans evolved a sense of fairness to be able to also benefit from this in one-off games is not yet understood. Fairness is surprising because a cartoon version of evolutionary theory would predict that altruism is only possible among kin. But the empirical evidence clearly shows that fairness belongs to being human. (Just like competition.)


Knowledge will come only if economics can be reoriented to the study of man as he is and the economic system as it actually exists.
Ronald Coase


Fairness is but one emotion that it not rational, not "productive". It offers some protection against unfairness, such as wages going lower and lower. Offering and accepting jobs are yes-no decisions under uncertainty for both parties. If there is one term that is often used in labor conflicts it is "unfair wages" or "unfair labor conditions". All the while economists wonder why unemployment is higher than the friction unemployment of rational actors and blame anything but their faulty assumptions.

Anger is also not productive, but fear of anger forces the haves to make better offers to the have-nots. Amok runs are not productive, mass shootings are not productive, suicide attacks are not productive. I would venture that independent of the proclaimed rationalizations, they signal a lack of justice and fairness.



The American election was also seen as unfair by many. The two parties had both selected historically unpopular candidates. Had the historically unpopular Trump not run, Clinton would have been the least popular candidate since polling started on this question. The main reason to vote was not to get other candidate.

With both candidates and parties so unpopular, with the historical unpopularity ratings of Congress and Washington the enormous partisan tribalism in America is surprising. The main pride of both tribes seems to be that they are at least not members of the other tribe. The lizard people have managed to pit the population against each other, while they loot the country and drag the world down. Do help me in the comments how "they" did this.



Many felt the election was a trap. In such a case one can expect irrational behavior. Or as Michael Moore elegantly said: Trump is the human Molotov cocktail they could throw through the window of the establishment. I am afraid the voters will find it was the window of their own house.

One mistake the Democratic establishment made in their support for Clinton was to expect rational behavior. They learned about economics and its political counterpart [[public choice theory]]. Both theories assume rational behavior. The Democrat establishment assumed that the working class had no other options than to vote for them because the Republicans would make their lives even worse.




Nic Smith, a self-described "white trash hillbilly from the holler" from coal country, on Trump voters: They are desperate to believe in something.

In a rational world the establishment would be right and player two would take the non-zero Clinton offer, in the real world people are fed up with begin treated unfairly and seeing inequality and corruption jointly grow for decades. In the real world having to choose the lesser evil, election after election, over and over again, makes it ever more likely the voters will sulk. That the Democrat establishment had just put up their middle finger to half of their party during the primaries likely also did not help putting people in a more rational mood.



Last year's presidential election was an extreme example, but a two-party system invariably mean that many people do not feel represented and are dissatisfied. [[A transferable vote]] would do a lot to fix this and gives the voters the possibility to vote for their candidate of choice without losing their vote.

A two-party system is also much more prone to corruption. A large part of the politicians will be in save districts and do not have to fear the wrath of their voters. Where the voters do have some choice, the corporations only have to convince politician D that they will also bribe politician R and both can do so with impunity.

A corrupt two-party system is not much better than a one-party system. In a representative democracy with more than two parties there would be real competition and the voters could vote for another politician.



What can we do to break this ultimatum game? The rhetoric and tribalism in America is unique. Humans are social animals and our group is important to us, but the US tribalism in beyond normal. For example, 34% of Trump voters being willing to say Trump's inauguration was the biggest ever is not normal.

Tribalism and emotions are not good for clear thinking and needs to be fought. The only thing we can change is how we act ourselves, we should try to reduce unnecessarily antagonizing people. When you have to say something bad about the corrupt Republican politicians in Washington make clear you mean them and do not use the term Republicans, which also means every single member of the group, most of whom also reject corruption.

I am only talking about who you address. Please stand your ground, there is no need to keep on moving our position in the direction of corrupt unreasonable politics. That only signals you do not believe in your ideas. If there is one thing frustrating about US politics it is weak corporate Democrats continually moving in the direction of ever more corrupt Republican politicians in the name of appeasement and in reality because they have the same donors.

Given the lack of a real choice one can also not blame the voters for every character error of their candidate and for all policies. For fashion icon Ken Bone the election was a choice between his personal benefit as coal worker and the greater good. Many Trump voters voted for Obama before. Some people say they voted Trump expecting him not to be able to execute his racist plans because they are unconstitutional. That may be a rationalization and for me Trump's overt racism would be a deal breaker, but not all of his voters are automatically bigots, even if many clearly are.


Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.
Martin Luther King, Jr


Most people simply voted the party they always voted. There are people who have their health insurance via the Affordable Care Act who voted Republican and are likely to lose coverage. They thought the Republicans would not do something as barbaric as repealing the ACA without replacement. Thousand of people will die every year when that happens, but the repeal means that billionaires will have to pay less for healthcare and they own the Republican politicians, so I am less optimistic they will not do it.

Do not go around calling every Trump voter a personalized Donald Trump, make them an offer they cannot refuse. Especially the Democratic establishment should stop blaming everyone but themselves for not voting for their inevitable candidate. Rather than scolding their voters, they should make the left an offer they cannot refuse.

That offer would be a non-corrupt candidate. That would be an offer Democrat and Republican voters alike would find it hard to refuse. It is, unfortunately, the one compromise the Democratic establishment is least willing to make. The people in power are in power because they are good at selling out to corporations.

This video gives a good overview of the corruption in America and how it impacts normal people via politics and the media. Since corruption became worse the workers no longer shared in the increases in productivity and the politicians respond to the wishes of the donor class and not the working class. Readers from the USA may think political corruption is normal because it slowly and imperceptibly grew, but in its enormity it is not normal. It was much better before the 1970s it is much better in other advanced nations.



Fortunately several initiatives have sprung up after the Trump election debacle and after Sanders showing it is possible to campaign for the presidency without taking donor money. As an offspring of the Sanders campaign Our Revolution will run a large number of candidates under one political and organizational platform. Similar, but very clear in their wish to primary and get rid of corporate Democrats, are the Justice Democrats.

The non-partisan group Brand New Congress also wants to help (Tea Party) Republicans that do not accept money into Congress. I would love to see more of this on the Republican side. In Europe conservative parties are conservative, but not corrupt and not bat shit crazy. They are people you can have an adult conversation with and negotiate. They may prioritize the environment less, but do not childishly claim climate change does not exist. Getting non-corrupt Republicans into office may even be worth the time of US liberals.

The group 314 Action (inspired by π) work to get more Science, Technology, Engineering and Math (STEM) people into politics. If you love money and power, science is the weirdest career choice you can make. Thus I would expect the scientists that run for office to be mostly clean. The climate "debate" shows that nearly all climatologists are not touched by corporate corruption, while there are strong incentives for coal and oil companies to bribe them.

Let's work to end corporate rule, get the corporation out of politics and send them back to take care of the economy.


Following The Ninth: In The Footsteps of Beethoven's Final Symphony.



Related reading

The big lesson of Trump's first 2 weeks: resistance works

The magazine Correspondent: This is how we can fight Donald Trump’s attack on democracy. Focuses on how to change the media, which has become more pressing in the Age of Trump

Chris Hedges: We Are All Deplorables. "My relatives in Maine are deplorables. I cannot write on their behalf. I can write in their defense. ... I see the Christian right as a serious threat to an open society. But I do not hate those who desperately cling to this emotional life raft"

Thomas Frank in The Guardian: How the Democrats could win again, if they wanted

CNN Money: U.S. inequality keeps getting uglier

David Roberts of Vox: Everything mattered: lessons from 2016's bizarre presidential election - WTF just happened?

Political Polarization in the American Public - How Increasing Ideological Uniformity and Partisan Antipathy Affect Politics, Compromise and Everyday Life

North Carolina is no longer classified as a democracy by Andrew Reynolds, Professor of Political Science at the University of North Carolina at Chapel Hill.

A law professor's warning: we are closer to oligopoly than at any point in 100 years. Economically. The political power of the corporations is also increasing

The first days inside Trump’s White House: Fury, tumult and a reboot. "Trump has been resentful, even furious, at what he views as the media’s failure to reflect the magnitude of his achievements, and he feels demoralized that the public’s perception of his presidency so far does not necessarily align with his own sense of accomplishment."

An important piece for poll nerds by Nate Silver: Why Polls Differ On Trump’s Popularity?

Variable Variability: The ultimatum game, a key experiment showing intrinsic fairness and altruism among strangers


* Photo at the top, Be Human, is by ModernDope and has a creative commons CC BY-SA 2.0 license.

8 comments:

William Connolley said...

> Lets work to end corporate rule

Why? Corporations are in favour of free trade and free movement of workers. Many (certainly more than pols) are in favour of carbon taxes.

Victor Venema said...

Even if I were so native to think corporations were a positive force, even Adam Smith warned about corporate rule being bad for the economy, they should keep out of politics. They abuse that power to make higher profits, which hurts honest companies focusing on providing good products and services and which has led to a shift of the tax burden from corporations to humans.

In a democracy humans should determine what the government does. Just like I would not give someone with an opinion I like double votes. Just like I abhor the voter suppression that goes on the USA. You seem to like the political preferences of the corporations; the politicians suppression voters probably also rationalize it by thinking that the remaining voters have better preferences.

Everyone has their own perspective and interests and everyone should get one vote when agreeing on what the government should do. If that leads to bad results, e.g. Trump, so be it. That is democracy.

Corporations should work on efficiently providing better services and goods. Their managers should not be distracted from their key role in our society by lobbying the government.

(Thanks for highlighting the typo. Fixed.)

William Connolley said...

> everyone should get one vote

Of course; that's democracy. I wasn't arguing against that by querying your "Lets work to end corporate rule". After all, you think we already have corporate rule in a 1-man-1-vote democracy.

> even Adam Smith warned about corporate rule being bad for the economy

I think you have nuances wrong there. AS (correctly) warned that whenever businessmen ganged up in private their talk turns inevitably to enriching themselves at the expense of the public. But he wasn't talking about corporate rule, I think. Perhaps you have a different section in mind.

> a shift of the tax burden from corporations to humans

I think you need to look up tax incidence theory; e.g.
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2010/04/corporate-tax-incidence-some-evidence.html

> Corporations should...

I'm rather keen on Darwinism. Things "should" do the thing they're built to do. Having to constantly divert things away from what they "want" to do is asking for over-regulation. Corporations "Darwinistic" purpose is to make money.

Victor Venema said...

"Corporations "Darwinistic" purpose is to make money." Exactly. And it is our role as humans to make sure these amoral machines do not do this over our backs because if they are allowed to, they will. Stopping government corruption is truly not over-regulation. A complete stop would reduce the amount of regulations a lot.

My reading of Adams is that if possible they will collude to enrich themselves without having to provide better services and products. Thus the government has a role to prevent that, a role that the corporations are trying to demolish with their political influence. If you want to reduce collusion, you need to start with breaking their political power.

Can you explain why "tax incidence theory" is important? Are you suggesting that corporations are not lobbying for tax cuts for themselves? Or that this shift in the tax burden did not happen? Or are you suggesting corporations do this although they do not get any benefits from this? The latter would conflict with your IMHO correct claim "Corporations "Darwinistic" purpose is to make money."

I love Darwinism, one of the most beautiful theories I know, but do not think we should base our morals on it.

Somewhat as an aside, but we should especially not base our morals on the primitive Smithian cartoon the social Darwinists have made of Darwin. Darwinian competition is much richer as Smithian competition.

William Connolley said...

> Can you explain why "tax incidence theory" is important?

One that one point (I'll reserve the rest and let others comment): yes, sort of, but you'll find many people better versed in economics to explain it better. I believe the ultimate theory is that only real persons pay taxes in the end. Corporate taxes are actually levied on persons; either their workers, their customers, or their owners. If you accept that, then the "shift in the tax burden" becomes a somewhat different question.

Victor Venema said...

That the taxes paid by corporations are in the end paid by people sounds like a weird argument to me. The same can be said for the taxes I pay. Maybe even more so because I will die, while corporations are immortal and can keep on accumulating capital and power eternally.

I presume libertarians made up this argument to plead for lower or no corporate taxes. You could use the same argument for high corporate taxes because apparently they would not notice it. ;-)

If you were trying to make me say that we should not just end corporate rule you are right, we should also end the class warfare against the middle class and the poor. And the world has many more problems; most of them can, however, be solved easier without running this marathon without a heavy backpack of corruption on your backs.

Corporations lobby for a lot more policies that go against the interests of most humans than just tax cuts. Recent examples of Trump regime decrees would be the deregulation of Wallstreet, which will lead to another 2008 economic crash, and that US Oil companies can now bribe poor countries to add to the corruption and less free markets all over the world.

Free markets are not in the interest of corporations.

Dave Werth said...

One reason for Clinton's unpopularity is that ever since Bill Clinton was elected President the right has waged a campaign of accusations against the Clintons. The fact that they have never been able to make any of it stick doesn't matter. Repeating the same lies over and over just works its way into people minds regardless of the lack of evidence for them.

Victor Venema said...

Completely independent of whether it is fair or not the unpopularity of Clinton should have been a warning, rather than pretending it is an advantage ("she has been tested"). Reality is what it is. The decade long vilification campaign made it even easier to run an effective negative campaign.

The Democrats should have run a candidate that can win rather than someone who "deserved it" (because she had raised so much money for her colleagues).