The Self-Deceptive Psychology of People and Institutions – Part 3

Deceptive conversations, between institutions and the people.

Continuing this essay series on the psychology of institutions, using Robin Hanson’s book The Elephant in the Brain: Hidden Motives in Everyday Life, this essay explores the psychology of self-deception among people, charities, and politicians.

As Hanson writes:

As we dig into our conversational motives, it pays to keep in mind that our ancestors were animals locked in the competitive struggle to survive and reproduce. Whatever they were doing with language had to help them achieve biologically relevant goals in their world, and to do so more effectively than their peers. If exchanging information were the be-all and end-all of conversation, then we would expect people to be greedy listeners and stingy speakers. Instead, we typically find ourselves with the opposite attitude: eager to speak at every opportunity. In fact, we often compete to have our voices heard, for example, by interrupting other speakers or raising our voices to talk over them. Even while we’re supposed to be listening, we’re frequently giving it a halfhearted effort while our brains scramble feverishly thinking of what to say next. We’re so eager to speak, in fact, that we have to curb our impulses via the norms of conversational etiquette. If speaking were an act of giving, we would consider it polite for people to “selflessly” monopolize conversations. But in fact, it’s just the opposite. To speak too much or “hog the mic” is considered rude, while the opposite behavior—inviting someone else to take the floor, or asking a dinner guest about one of her hobbies—is considered the epitome of good manners … [S]peaking functions in part as an act of showing off. Speakers strive to impress their audience by consistently delivering impressive remarks. This explains how speakers foot the bill for the costs of speaking we discussed earlier: they’re compensated not in-kind, by receiving information reciprocally, but rather by raising their social value in the eyes (and ears) of their listeners.

Often, our own self-interest and that of the tribe we belong to are one and the same.  As Hanson explains:

[V]oters tend to show little interest in the kinds of information most useful for voting, including details about specific policies, the arguments for and against them, and the positions each politician has taken on each policy. Instead, voters seem to treat elections more like horse races, rooting for or against different candidates rather than spending much effort to figure out who should win … We also show surprisingly little interest in the accuracy of our news sources. While prices in financial and betting markets can plausibly give very timely, accurate, and unbiased information, we continue to let legal obstacles hinder such information on most topics outside of business. One of us (Robin) was told by a reliable source a few years ago that a major media firm based in Washington, D.C., had several people working for several months on a project to score prominent pundits on the accuracy of their predictions. The project was canceled, however, soon after results came back showing how depressingly inaccurate most pundits actually are. If consumers truly cared about pundit accuracy, there might well be more “exposés” like this—the better for us to find and pay attention to those rare pundits whose predictions tend to come true. Instead, we seem content with just the veneer of confidence and expertise, as long as our pundits are engaging, articulate, connected to us, and have respected pedigrees.

Institutions, just like people, compete for various things, including money, and self-interested motives in that context are front and center, however hidden:

Researchers at universities, think tanks, and corporate labs are not shy about explaining why their work deserves funding: Research increases the world’s insight and understanding on important topics, leading to more innovation and economic growth. And it’s true that research does often help the world in these ways. But such benefits are probably overstated, and we have reasons to doubt whether these are in fact the main motivations that drive academia. Like news and personal conversations, academic “conversations” are full of people showing off to impress others. Even if they sometimes claim otherwise, researchers seem overwhelmingly motivated to win academic prestige. They do this by working with prestigious mentors, getting degrees from prestigious institutions, publishing articles in prestigious journals, getting proposals funded by prestigious sponsors, and then using all of these to get and keep jobs with prestigious institutions … College students, for example, are willing to pay more to attend schools where the professors are famous for their research (and as alumni they donate more money to such schools), even though few students actually read or engage with their professors’ work. (Even fewer students study the quality of research at colleges when deciding where to go.) And of course the prestige of a professor has little to do with teaching ability.

Self-stylized “do-gooders” are case studies in self-deception.  Which brings Hanson to the subject of charities, and politics:

To appreciate the contrast between our ideals and our actual behavior, it helps to portray what ideal charitable behavior looks like. Luckily, others have done this job for us. In 2006, Holden Karnofsky and Elie Hassenfeld were working as hedge fund analysts in Connecticut. After making a comfortable living for a few years, they decided to donate a good portion of their earnings to charity. But they wanted to make sure their donations would be used effectively, so they began researching charities the same way they’d been trained to research investment opportunities, namely, by asking for data. Along with a few friends, Karnofsky and Hassenfeld drafted up a list of promising charities and began reaching out for information. For each charity, they wanted to know how their donations would be spent, and more importantly, how the outcomes would be measured. They wanted to gauge how efficient the whole process was, in order to get the best bang for their charity buck. In financial terms, they were looking to maximize their return on investment (ROI)—or in this case, return on donation (ROD)—and were simply doing due diligence. The response from the charities they contacted was disheartening. Some simply sent glossy brochures with photos of smiling children and a few pat assurances that good work was being done. Other charities were hostile. One accused Karnofsky and Hassenfeld of attempting to steal confidential information on behalf of a competitor. (Take a moment to consider why a philanthropist might want to keep a “trade secret.”) Almost none of the charities responded with the kind of hard, outcome-oriented data that would satisfy a financial analyst. Eventually they realized that they weren’t getting the information they wanted “because the charities themselves didn’t have it.” But still Karnofsky and Hassenfeld thought the data was important, and they thought other donors would want it too. So in 2007, they decided to leave their jobs and start GiveWell, an organization dedicated to doing (and publicizing) quantitative research on different charities in order to determine which are the most effective, that is, have the highest ROD … This is a hard-nosed, data-driven approach that looks above all for results. In deciding how to give, effective altruists follow their heads, not their hearts … [B]y taking a rigorously results-oriented approach, effective altruism highlights how traditional charities have not been taking this kind of approach. If we’re going to give money to charity, don’t we want our donations to be as useful as possible? Isn’t that the whole point? Unfortunately, when we start to look at real-world altruism, helping people efficiently doesn’t seem to be our top priority … Taken at face value, Americans are a fairly generous people. Nine out of 10 of us donate to charity every year. In 2014, these donations amounted to more than $359 billion—roughly 2 percent of the country’s GDP. Some of this comes from corporations or charitable foundations, but more than 70 percent is donated by individuals—men and women who tithe at church, sponsor public radio, support children’s hospitals, and give back to their alma maters … [W]e also show puzzling behavior when making individual choices [about charities]. For example, one recent survey found that the majority of Americans (85 percent) say that they care about nonprofit performance, but only 35 percent do research on any charitable gift in the course of a calendar year; of those that research, most (63 percent) do so to validate the nonprofit they’re seeking to give to. Only 3 percent of donors do comparative research to find the best nonprofit to give to … [S]ome charities are vastly more effective than others. Giving $3,500 to the Against Malaria Foundation will save a whole human life, while the same amount divided across 100 different charities might go entirely to waste, hardly covering the administrative overhead necessary to collect and process all those separate donations.

People also want to be recognized when they do good things, which is the sort of social “signaling” we evolved as a species to engage in.  As Hanson writes:

[P]eople [also] prefer not to give when their contributions won’t be recognized. Anonymous donation, for example, is extremely rare. Only around 1 percent of donations to public charities are anonymous. Similarly, in lab experiments, people who donate seldom choose to remain anonymous. And even when people donate “anonymously” to public charities, we should be skeptical that their identities are kept completely hidden. “A London socialite once remarked to me that she knew many anonymous donors,” writes Miller. “They were well known within their social circle ... even though their names may not have been splashed across the newspapers.” At the very least, most “anonymous” donors discuss their donations with their spouses and close friends. Often charities bracket donations into tiers and advertise only which tier a given donor falls into (rather than an exact dollar amount). For example, someone who gives between $500 and $999 might be called a “friend” or “silver sponsor,” while someone who gives between $1,000 and $1,999 might be called a “patron” or “gold sponsor.” If you donate $900, then, you’ll earn the same label as someone who donates only $500. Not surprisingly, the vast majority of donations to such campaigns fall exactly at the lower end of each tier.30 Put another way: very few people give more than they’ll be recognized for … People seldom initiate donations on their own; up to 95 percent of all donations are given in response to a solicitation. In-person solicitations, like when someone comes to your door or passes the collection plate at church, work better than impersonal solicitations like direct mail or TV advertisements. People are especially likely to donate when the solicitor is a close associate … In 2011, Americans donated $298 billion to charity, of which only an estimated 13 percent ($39 billion) went to help foreigners. This is hardly the profile of effective charity, since even the neediest Americans are typically better off than many people in developing countries. To be fair, parochialism is an inescapable part of human nature, and it’s written all over our behavior. We treat close family better than friends, and friends better than strangers—so it’s no surprise that we often privilege our fellow citizens over people in foreign countries.

As just as people crave being recognized when they do good things, they tend to want to know that the people they’re helping know that it was they who did the good thing:

[O]ne of the most well-confirmed findings in behavioral studies of altruism is that we’re much more likely to help someone we can identify—a specific individual with a name, a face, and a story. First investigated by Thomas Schelling in 1968, this phenomenon has since come to be known as the identifiable victim effect. The corresponding downside, of course, is that we’re less likely to help victims who aren’t identifiable. As Joseph Stalin is reported to have said, “A single death is a tragedy; a million deaths is a statistic.” Charities that raise a lot of money understand this, which is why they engage in so much storytelling. “Meet Liz Cintron,” the United Way website proudly proclaims, “a senior at Georgetown University and a shining example of how helping one person realize their dreams is a victory for all of us.” Liz’s story, perched beneath her bright, beaming smile, is chock-full of personal details. As the charity that raises more money each year than any other charity, United Way clearly knows what it’s doing.  Contrast this with the Against Malaria Foundation. Although it saves hundreds of lives every year, it can’t offer names or faces of the people it helps, because it saves only statistical lives. Since it takes roughly 500 mosquito nets to save one life (on average), there’s no single individual a donor can point to and say, “I saved this man’s life.” This kind of statistical approach to lifesaving may be effective, but it doesn’t tug as strongly at our heartstrings … Many observers have noticed that people crave recognition for their good deeds. “A millionaire does not really care whether his money does good or not,” said George Bernard Shaw, “provided he finds his conscience eased and his social status improved by giving it away.” “Take egotism out,” said Ralph Waldo Emerson, “and you would castrate the benefactors.” … [W]e respond to individual faces and stories more than we respond to dry statistics, however staggering the numbers … For the psychologist Paul Bloom, this is a huge downside. Empathy, he argues, focuses our attention on single individuals, leading us to become both parochial and insensitive to scale. As Bertrand Russell is often reported to have said, “The mark of a civilized man is the capacity to read a column of numbers and weep,” but few of us are capable of truly feeling statistics in this way. If only we could be moved more by our heads than our hearts, we could do a lot more good.

Hanson also describes how difficult it is for people to have significant concern about the unseen people of the future:

We have many motives for donating to charity. We want to help others, but we also want to be seen as helpful. We therefore use charity, in part, as a means to advertise some of our good qualities, in particular our wealth, prosocial orientation, and compassion. This view helps explain why some activities that help others aren’t celebrated as acts of charity. One such unsung activity is giving to people in the far future. Instead of donating money now, we might put it in a trust and let the magic of compound interest work for 50 or 500 years, stipulating how it should be put to use after it’s grown to a much larger size. These have been called “Methuselah trusts,” the most famous of which were set up by Benjamin Franklin. On his death, he gave two gifts of ₤1,000 each to the cities of Boston and Philadelphia, and he instructed the funds to be invested for 100 years before being used to sponsor apprenticeships for local children.

A related issue is the subject of popular support for price controls for useful drugs now for the current generation, at the expense of the development of useful drugs in the future that will help future generations.  As economist Tyler Cowen has written:

What is the gravest outright mistake out there? I am not referring to disagreements, I mean outright mistakes held by smart, intelligent people.  Let me turn over the microphone to Ariel Pakes, who may someday win a Nobel Prize: “Our calculations indicate that currently proposed U.S. policies to reduce pharmaceutical prices, though particularly beneficial for low-income and elderly populations, could dramatically reduce firms’ investment in highly welfare-improving R&D. The U.S. subsidizes the worldwide pharmaceutical market. One reason is U.S. prices are higher than elsewhere.” … I do not believe we should cancel those who want to regulate down prices on pharmaceuticals, even though likely they will kill millions over time, at least to the extent they succeed … But if we can like them, tolerate them, indeed welcome them into the intellectual community, we should be nice to others as well.  Because the faults of the others probably are less bad than those who wish to regulate down the prices of U.S. pharmaceuticals.

And as Cowen writes on the same topic:

[Tomas Philipson writes in the Wall Street Journal:] “The law’s price controls will also deter companies from developing new medicines. A study I co-authored estimated that 135 fewer drugs will come to market through 2039 because of the Inflation Reduction Act. Research firm Vital Transformation’s forecast is even bleaker, predicting that the U.S. could lose 139 drugs within the next decade. Dozens of life-sciences companies have announced cuts to their research and development pipelines because of the 2022 law. These announcements have come in earnings calls and filings with the Securities and Exchange Commission—where deliberate misstatements would expose executives to civil and criminal penalties—so they can’t be chalked up to political posturing.” … It is worth noting this kind of academic research has not been effectively rebutted, rather what you usually hear in response is a bunch of snarky comments about Big Pharma and the like. And to repeat myself yet again: if you are ever tempted to cancel somebody, ask yourself “do I cancel those who favor tougher price controls on pharma?  After all, they may be inducing millions of premature deaths.”  If you don’t cancel those people — and you shouldn’t — that should broaden your circle of tolerance more generally.

Other researchers have found that forced price reductions in medical device payments led to reductions in innovation:

We investigate the effects of substantial Medicare price reductions in the medical device industry, which amounted to a 61% decrease over 10 years for certain device types. Analyzing over 20 years of administrative and proprietary data, we find these price cuts led to a 25% decline in new product introductions and a 75% decrease in patent filings, indicating significant reductions in innovation activity. Manufacturers decreased market entry and increased outsourcing to foreign producers, associated with higher rates of product defects. Our calculations suggest the value of lost innovation may fully offset the direct cost savings from the price cuts … These findings underscore the need to balance cost containment with incentives for innovation and quality in policy design.

The problem of people failing to act to help the people of the future, absent special circumstances, was explored in a previous essay series regarding the concept of “Skin in the Game” and the problem of the rapidly mounting federal debt, which will be left to future generations to pay in the form of oppressively large taxes.  Which brings Hanson to his discussion of politics:

[T]he word “politics” is often used with an entirely different connotation. In some prestigious walks of life, such as art, literature, and philosophy, many people aren’t at all embarrassed to be “political”; in fact, they often talk as if it were their highest aspiration. Far from the grubby, low-stakes game of office politics, this is the politics of citizenship, activism, and statecraft: helping steer a nation in pursuit of the common good. But does the grand political arena really bring out our moral virtue? To help illuminate our political motives, let’s consider an archetype for the ideal politically engaged citizen: the conscientious, civic-minded Do-Right. True to their name, Do-Rights are engaged with politics for all the “right” reasons. They’re not after their own selfish ends; they simply want to make a difference for others, to improve society for current and future citizens. They’re not starry-eyed idealists, but rather hard-nosed pragmatists who are willing to make hard choices and compromise when necessary to achieve the best outcomes. There’s nothing at all performative about their actions in the political sphere; they’re not angling for credit or personal glory. Instead, they’re earnestly, single-mindedly focused on doing what’s best for their country. For one thing, the literature on voting makes it clear that people mostly don’t vote for their material self-interest, that is, for the candidates and policies that would make them personally better off. Jonathan Haidt provides some examples in The Righteous Mind: Parents of children in public school are not more supportive of government aid to schools than other citizens; young men subject to the draft are not more opposed to military escalation than men too old to be drafted; and people who lack health insurance are not more likely to support government-issued health insurance than people covered by insurance.

In the end, one always has to watch what politicians do, not what they say:

It’s easy to say we’re acting like Do-Rights, but our actions often betray other, less visible motives … As voters, Do-Rights should care deeply about being informed. If they don’t understand the issues, they might as well flip a coin or abstain from voting altogether. Real voters, however, show more interest in the status, personalities, and election drama of politicians than in their track records or policy positions … Even in meaningful elections, however, voters act more like sports fans rooting for their favored team than like analysts trying to figure out which team ought to win. When it comes to specific political issues, voters are notoriously ignorant … As long as our politicians talk a good game, we don’t seem to care whether they’re skilled at crafting bills and shepherding them through the system. Across the board, we seem to prefer high-minded rhetoric over humble pragmatism … Do-Rights should happily abstain from a vote if they judge themselves significantly less informed than the average voter. On such issues, they might even consider it their patriotic duty to stay out of the country’s political business and to encourage other uninformed voters to do likewise. Suffice it to say, however, that this attitude is uncommon among real citizens, many of whom shake their heads in disdain at nonvoter … An ideal political Do-Right will be the opposite of an ideologue. Because Do-Rights are concerned only with achieving the best outcomes for society, they won’t shy away from contrary arguments and evidence. In fact, they’ll welcome fresh perspectives (with an appropriately critical attitude, of course). When a smart person disagrees with them, they’ll listen with an open mind. And when, on occasion, they actually change one of their political beliefs, they’re apt to be grateful rather than resentful. Their pride might take a small hit, but they’ll swallow it for the sake of the greater good. But of course, that’s not at all how real voters [or bureaucrats aligned with a particular political party] behave. Most of us live quite happily in our political echo chambers, returning again and again to news sources that support what we already believe. When contrary opinions occasionally manage to filter through, we’re extremely critical of them, although we’re often willing to swallow even the most specious evidence that confirms our views … [W]e hold political beliefs for reasons other than accurately informing our decisions.

The ever-present dynamic of party loyalty will forever haunt politics.  As Hanson writes:

For a Soviet apparatchik, it wasn’t enough simply to show great loyalty to Stalin; those who didn’t show more loyalty than others were suspected of disloyalty and often imprisoned or killed. In The Gulag Archipelago, the Russian novelist and historian Aleksandr Solzhenitsyn gives a dramatic example of these extreme incentives: At the conclusion of the conference, a tribute to Comrade Stalin was called for. Of course, everyone stood up, and the small hall echoed with stormy applause. For three minutes, four minutes, five minutes, the applause continued. It was becoming insufferably silly even to those who really adored Stalin. However, who would dare be the first to stop? So the applause went on—six, seven, eight minutes! They couldn’t stop now till they collapsed with heart attacks! Finally, after eleven minutes, the director of the paper factory assumed a businesslike expression and sat down in his seat. And, oh, a miracle took place! To a man, everyone else stopped dead and sat down. They had been saved! That, however, was how the [secret police] discovered who the independent people were. And that was how they went about eliminating them. That same night the factory director was arrested. They easily pasted ten years [in a labor camp] on him. At least 600,000 people were killed in these ways during Stalin’s purges. And similar dynamics have played out in China under Mao Zedong and in North Korea under the Kim family regime. Now, most of us don’t live in a totalitarian state. But even in modern, pluralistic democracies, we face the same kind of incentives as the apparatchik … We, too, are rewarded for professing the “right” beliefs and punished for professing the “wrong” ones—not by any central authority but by our fellow citizens [or by our fellow bureaucrats]. And yes, our societies aren’t dominated by a single political party, but whenever an issue becomes factionalized, framed as Us against Them, we should expect to find ourselves behaving more like an apparatchik competing to show loyalty to our team.

Hanson then describes the dynamics behind many political phenomena, including how local suburban areas (like my place of residence, Alexandria, Virginia) can become political monocultures:

[P]olitical behavior of ordinary, individual citizens is often better explained as an attempt to signal loyalty to “our side” (whatever side that happens to be in a particular situation), rather than as a good-faith attempt to improve outcomes. In addition to the Do-Right’s motives, then, we also harbor the motives of the apparatchik: wanting to appear loyal to the groups around us. All these incentives— romantic, professional, and social— undoubtedly put pressure on us to adopt the political beliefs of our local communities. But insofar as we cave to these pressures, it certainly doesn’t happen overnight. We’ve all been in situations where we’ve had to admit to an unpopular political opinion, and we don’t suddenly change our minds for fear of a few disapproving scowls. But when the same forces play out slowly, over years or even decades, we shouldn’t be surprised to find our beliefs slowly falling into line. And in the extreme case—when we’re socialized from birth into a politically homogenous community—we might find it all but impossible to notice these social influences on our beliefs. Our political views will simply seem right, natural, and true. Now, voting is protected by the secret ballot (an important institution that prevents the most egregious forms of voter manipulation). But to get credit for our political beliefs, we need to advertise them; people can’t reward us for what they can’t see. For an apparatchik, then, the real benefits come not from voting per se, but rather from all the activities surrounding the election, like attending rallies, discussing the issues, posting to social media, and watching election coverage with friends and family. It’s during these social activities, and not just at the polls, that it’s important for us to express our political opinions … [V]oters feel little pressure to be informed. As long as we adopt the “right” beliefs—those of our main coalitions—we get full credit for loyalty. We don’t need to be well informed because the truth isn’t particularly relevant to our expressive agendas … When our beliefs are anchored not to reasons and evidence, but to social factors we don’t share with our conversation partners (like loyalty to different political groups), disagreement is all but inevitable, and our arguments fall on deaf ears.

This leads for disdain for political compromises:

A common symptom of loyalty signaling is an unwillingness to compromise. Now, if you’re a Do-Right pragmatist concerned only with outcomes, compromise can be very attractive, since it’s often the best way to make progress. But when you’re doing politics as a performance, like an apparatchik, you don’t care about outcomes as much as you care about the appearance of loyalty. And what better way to signal your loyalty than to say, “I’m not budging. It’s my (group’s) way or the highway.” This kind of attitude admits to no middle ground: “You’re either with us or against us.” In such polarized climates, anyone who advocates for compromise risks being accused of insufficient loyalty. More generally, any attempt to deviate from the preexisting consensus will be considered suspect … [P]olitical groups tend to join alliances until there are only a few major coalitions, after which members show loyalty by focusing on issues that most clearly distinguish them from opposing coalitions. (And with only two main coalitions, only one main dimension separates them.) Voters and politicians who instead focus on other, less-distinguishing issues are penalized, as those issues seem to distract from the main fight.

So, after all this, is the situation hopeless?  If not, what can be done with this knowledge?  As Hanson summarizes:

The first benefit is situational awareness—a better, deeper understanding of the human social world. It’s easy to buy into the stories other people would sell us about their motives, but like the patter of a magician, these stories are often misleading. “I’m doing this for your benefit,” says every teacher, preacher, politician, boss, and parent. Even friends do it, for example, when they give smug “helpful” advice. The prosocial explanations offered for these behaviors may contain partial truths, but what’s left unstated is often just as important (if not more so), and it helps to know what to look for … Yes, it’s useful to understand the motives of others. But if that’s all readers take away from this book, they’re missing the much larger and more important point: we often misunderstand our own motives. We have a gaping blind spot at the very center of our introspective vision. If we’re going to second-guess our coworkers and friends, we shouldn’t give ourselves an easy pass. In fact, knowing about our own blind spots should make us even more careful when pointing fingers at others … Savvy institution designers must therefore identify both the surface goals to which people give lip service and the hidden goals that people are also trying to achieve.

This concludes this essay series on the self-deceptive psychology of people and institutions.