Excesses and Externalities

The Problem with our Excesses

My previous post was about our desires to live a life that never involves any pain or suffering. We try to build a life for ourselves and our loved ones where every moment is happy, and where we never have to engage in drudgery, never experience physical discomfort, and never face any obstacles. Today’s post looks at another related aspect of our lives and mindsets that Sam Quinones highlights in his book Dreamland as part of our current opioid crisis: excesses.

 

Quinones is critical of our capitalistic culture that creates a message of buying things to find happiness, fulfillment, and meaning. The marketing departments of everything from soap companies, life insurance companies, to take-out restaurants suggests that happiness is right around the corner, as long as we are willing and able to buy more of what they offer. It is owning something bigger, having more, and expanding our consumption that is branded as a good life. But as Quinones sees it, “Excess contaminated the best of America.”

 

I studied public policy and I spend a lot of time listening to podcasts with economists. A common idea in the world of public policy and the mind of economists is the idea of externalities, secondary consequences of policies and peoples actions. Some externalities are positive, such as people developing a sense of civic pride after participating in an election, but many externalities are negative, such as green house gasses polluting the planet as we drive to and from work. What Quinones describes with the quote above, is the reality that our drive for excesses produces negative externalities that damage our planet and ultimately ruin the lifestyle that we chase.

 

By always wanting more, wanting it faster, and wanting it more tailored to our specific desires to make us feel like royalty, we have put ourselves in a place that is unsustainable. Our single use plastic bags have trashed our cities and open spaces. Having our individual cars to drive to everyplace we want to go emits more pollution than a well developed public transportation infrastructure. Over-purchasing consumer goods produces more garbage that has to go someplace.

 

This post has simply highlighted the reality that we live with negative externalities, and that our consumer driven culture is creating externalities which poison the planet. Quinones throughout his book focuses on the idea that our culture’s excesses have fueled the opioid epidemic by turning us inward toward our own wants versus encouraging us to think of others and how we can work together as part of a community. I think he is correct, and I think the space to start in making a change is by getting people to truly reflect on their lives, their purchases, and what they pursue. As Ryan Holiday put it in Stillness is the Key, “Eventually one has to say the e-word, enough. or the world says it for you.”

 

The way out of our opioid crisis, and indeed the way out of so many of our problems today, is to say enough to our own selfish desires. We need to stop the negative externalities that we produce when we purely pursue our own selfish ends, and instead we need to embrace our communities and put others first, to create more positive externalities which can heal our communities and fill the empty holes that consumerism leaves inside of us.

Creatures of Logic

One of the things I am most fascinated by is the way in which our lives, our thoughts, and our decisions feel to us to be purely rational, but are clearly not as rational we think. Our minds are bounded by a limited amount of knowledge that we can ever have, a limited amount of information that we can hold in our head, and a host of biases, prejudices, and thinking vices that get in the way of rationality. We feel like we are in control of our minds, and our actions and decisions fit into a logically coherent, rational story that we tell ourselves, but much is missing from the picture of the world that we develop.

 

Usually I turn these considerations inward, but it can be helpful to turn this reality outward as well. Dale Carnegie does so in his book How to Win Friends and Influence People. In the context of criticizing other people, Carnegie writes, “When dealing with people, let us remember we are not dealing with creatures of logic. We are dealing with creatures of emotion, creatures bristling with prejudices and motivated by pride and vanity.”

 

The other day I wrote about criticism, and how it can often backfire when we want to criticize another person and change their behaviors. Carnegie notes the terrible consequences of criticizing people, ranging from quitting work that they might actually excel at all the way to committing suicide, and his quote above is a reminder that people are not logical automatons. Our motivations and sense of self matter to how we perform, what we do, and how we think. Adding mean-spirited criticism, even if well deserved, can be harmful. What is more, our criticism often serves to mostly prop ourselves up, and is more about how special we think we are, than about how poorly another person is performing or behaving.

 

Carnegie believes that we need to be more considerate of other people when dealing with them in any circumstance. His quote extends beyond moments of criticism to areas of motivation, quality relationships, social responsibilities, and individual health and well-being. We cannot simply look at others and heap and hold them purely responsible for the outcomes of their lives. People are not rational, and will not be able to perfectly sort out everything to identify the best possible decisions for their present and future lives. We must help them by remembering their bounded rationality and we must help develop structures that allows them to make the best decisions and perform at their best. People are going to make logical errors, but we can design society and the world they operate within so that they minimize the errors that they make and so that the negative externalities of their biases are also minimized.

Religion As a Community Social Structure

There are not many things that pull people together quite like religious beliefs. Sports pull us together when our kids are on the same team, when we are all in a stadium, or when two of us are wearing the right hat on an airplane, but those don’t make for strong ties that are lasting and uniting. Religion offers an entire worldview and set of corresponding behaviors that do create lasting ties between people who otherwise wouldn’t have much in common and wouldn’t likely interact for any significant time. Robin Hanson and Kevin Simler look at religion in their book The Elephant in the Brain to understand the ways that religious signaling, behaviors, and beliefs operate in ways that often go unnoticed.

 

They quote a few authors in a short section that stood out to me:
“Religion,” says Jonathan Haidt, “is a team sport.”
“God,” says Emile Durkheim, “Is society writ large.”

 

Simler and Hanson go on to explain what this community and larger social aspect of religion means given that we tend to think of religion more as a private belief system:

 

“In this view, religion isn’t a matter of private beliefs, but rather of shared beliefs and, more importantly, communal practices. These interlocking pieces work together, creating strong social incentives for individuals to act (selfishly in ways that benefit the entire religious community. And the net result is a highly cohesive and cooperative social group. A religion, therefore, isn’t just a set of propositional beliefs about God and the afterlife; it’s an entire social system.”

 

Religions typically encourage pro-social behaviors that get people thinking more about a cohesive group than about selfish motives. By pursuing these prosocial behaviors, people can gain more status and prestige in society. For selfish reasons then (at least to some extent), people pursue the religious dictates of their society in their own personal lives. As they do this, positive externalities may arise and may create a society that is more cohesive and supportive all around. This might not always happen, but having a shared system of understanding the world, our places in the world, and the stories about who we are and why we exist help to create the social fabric and social capital to further encourage cooperation and social cohesion. In a weird way, our selfish motives encourage religion, even if we don’t acknowledge it and assume that religion is entirely about personal beliefs.

Norms and Productive Coordination

In my previous post I wrote about wasteful competition that occurs between animals within the same species, including us humans. To try to be impressive, we do a lot of things that are relatively wasteful. We might spend hours and hours focusing on developing a single skill, some animals will spend lots of time building an impressive dwelling, and some animals grow brightly colored plumage that puts them at risk of being seen by prey and requires energy to maintain. All of these examples are things that are done to impress others, attract a mate, and pass along our genes.

 

Kevin Simler and Robin Hanson wrote about this phenomenon in The Elephant in the Brain, and they also wrote about a phenomenon that goes in the other direction, productive coordination. The authors write, “humans are different. Unlike the rest of nature, we can sometimes see ahead and coordinate to avoid unnecessary competition. This is one of our species’ super powers – that we’re occasionally able to turn wasteful competition into productive cooperation.”

 

The method that we follow to get to productive cooperation the authors call norms. We are all familiar with norms and know what they are, even if we don’t recognize most of the norms around us and can’t perfectly define what norms are. Rules are the laws, guidelines, and standards that we follow in our day to day lives. Some are written down and formalized. Some have strict and explicit penalties if violated, and some are unwritten, a bit fuzzy, and sometimes don’t include obvious consequences when violated.

 

I find norms interesting in the context of Simler and Hanson’s book because they show the ways we get to well functioning societies with fewer costly and wasteful externalities from our signaling and self-interested behaviors. Norms create a way for us to compete with each other without having to go to war with every person who might have a higher status, greater wealth, or more social and political power than we have. Many norms help all of us, as a group, function a bit better together even if they get in the way of our individual self-interest from time to time. In many ways, norms are what create the elephant in the brain.

 

The idea that our self-interest is constantly at work, hiding in plain sight and influencing our behavior while being consciously ignored comes about because of norms. We have many unwritten rules against openly bragging about ourselves and against openly disregarding others in the pursuit of our self-interest. If we did not have norms that made us feel guilty, that caused people to look down upon us, and that isolated us socially when we bulldozed our way toward the things we wanted, then we would have no reason to hide our self-interested motives and we would openly and directly compete for the things we want. Norms shape our lives by defining acceptable behaviors, and they limit our direct pursuit of our self-interest to cut out some wasteful and damaging behaviors while pushing us to be more cooperative and peaceful.

The Purchases We Make

In their book The Elephant in the Brain, Kevin Simler and Robin Hanson write about “conspicuous consumption,” a term coined by economist and sociologist Thorstein Veblen who lived about 100 years ago. Simler and Hanson write, “When consumers are asked why they bought an expensive watch or high-end handbag, they often cite material factors like comfort, aesthetics, and functionality. But Veblen argued that, in fact, the demand for luxury goods is driven largely by a social motive: flaunting one’s wealth.”

 

The other pieces of the argument, the good performance of the item, the colors we were dying to have, and the durability of the product might be true sometimes, and that allows us to make those excuses even though they only describe part of our purchase. A big part of Hanson and Simler’s book focuses on the idea that we use these excuses that sometimes are true or that partially describe our decisions to justify actions that signal something other than the stated reason for our action.

 

In the case of buying luxury goods the thing we are signaling is our wealth, which demonstrates our financial resources and can be used as a proxy for our social capital and human value. Our wealth may give others insights into our skills and abilities to do hard things, helping us stand out against a crowd. Our wealth may reveal our deep social connections or our family’s high status, two traits that certainly helped our ancestors pass their genes along in a small political tribe.

 

The problem today, however, is that we don’t admit this is what we are doing with our purchases, and as a result we have trouble addressing major externalities from our consumptive habits. We spend a lot of money on unnecessary luxury goods, and many people go deeply into debt to signal that they are the type of person who would own a certain type of luxury good. Our unyielding desire in the United States for ever further and greater consumption leads us to buy larger houses that we have to heat, faster cars that use more energy, and to own more clothes that will take millions of years to break down thanks to the new synthetic fibers we make them from. Our consumption and our drive to continuously signal our wealth and social value, some would argue, is poisoning and heating our planet to dangerous levels.

 

Simler and Hanson don’t focus on the externalities of our signaling behavior in their book, but they do acknowledge that they are there. In the book, the authors make an argument that most of us would rather ignore. That we do things for selfish motives that we would like to keep under the covers. This is important if you are an economics, sociology, or policy researcher, and for us in our daily lives, we can take a lesson from Hanson and Simler that stems from an awareness of our self-centered behavior. We can think about our signaling behaviors and ask if conspicuous consumption is really worthwhile. We can step back and ask if the ways we signal our wealth help or hurt the planet, and we can start to make decisions with positive externalities and attempt to avoid the negative externalities I mentioned above.

Deception is Expected

Robin Hanson and Kevin Simler consider it normal and expected that humans are deceptive creatures. We evolved, according to the authors, to be deceptive so that we could get a little bit more for ourselves and have a slightly better chance of reproducing and keeping our genes in the mix. We don’t boldly take things and openly cheat to get what we want (most of the time), but instead we do our best to be a team player, with some marginal cheating and stealing under the table. As they put it,

 

“Deception is simply part of human nature–a fact that makes perfect sense in light of the competitive (selfish) logic of evolution. Deception allows us to reap certain benefits without paying the full costs. And yes, all societies have norms against lying, but that just means we have to work a little harder not to get caught. Instead of telling bald-faced lies, maybe we spin or cherry-pick the truth.”

 

This leaves us in an interesting position as we think about how we should act at an individual level and how societies should organize themselves at a larger level. We want to have norms in place that deter cheating and lying to help protect people’s property, to prevent fraud, and to create a system where people can meaningfully engage with one another and trust their institutions. But at the same time, we recognize that there is going to be a substantial amount of deception and a natural urge to be deceptive in order to obtain a little more benefit with a little less cost. Individuals will behave this way, and so will the families, social groups, communities, states, and nations that individuals create.

 

A solution that I would explore would be to accept Simler and Hanson’s views openly, and then begin looking closely at externalities. Externalities (usually discussed in the negative sense) are the additional things that stem from the original action. Deceptive behavior can have negative externalities, such as wastes of money when we buy sports cars to show off rather than using our money for more productive and charitable uses. At the same time, deceptive behavior can have positive externalities, such as the benefits of charity when we donate large amounts of money, again to show off.

 

If we accept this is happening, then in our own lives and in our societies we can try to add additional costs (such as taxes) on deceptive behaviors with negative externalities, and we can do more to encourage deceptive behaviors that produce largely positive externalities. We don’t have to abandon our human nature, but we can collectively decide to shape the consequences we might face for being deceptive in certain situations. This can help bring our behaviors and actions in line with the outcomes we want, but it does require that we accept what is taking place inside our brains and accept that we are not always as wonderful as we would like to appear.

The Purchases We Make

In their book The Elephant in the Brain, Kevin Simler and Robin Hanson write about “conspicuous consumption,” a term coined by economist and sociologist Thorstein Veblen who lived about 100 years ago. Simler and Hanson write, “When consumers are asked why they bought an expensive watch or high-end handbag, they often cite material factors like comfort, aesthetics, and functionality. But Veblen argued that, in fact, the demand for luxury goods is driven largely by a social motive: flaunting one’s wealth.” The other pieces of the argument, the good performance of the item, the colors we were dying to have, and the durability of the product might be the true reason we made a purchase in some instances, and that allows us to make those excuses even though they only describe part of our behavior. A big part of Hanson and Simler’s book focuses on the idea that we use these types of excuses to justify our actions. Further, they argue that our behaviors often signal something about ourselves implicitly that we don’t want to say explicitly.

 

In the case of luxury goods the thing we are signaling is our wealth. Our wealth demonstrates our financial resources and can be used as a proxy for our social capital and human value. Our wealth may give others insights into our skills and abilities to do hard things, helping us stand out against a crowd. And, our wealth may reveal our deep social connections or our family’s high status, two social traits that certainly helped our ancestors pass their genes on in small political tribes.

 

The problem today, however, is that we don’t admit this is what we are doing with our purchases, and as a result we face major negative externalities from our consumptive habits. We spend a lot of money on unnecessary luxury goods, and many people go deeply into debt to signal that they are the type of person who would own a certain type of luxury good. Our unyielding desire in the United States for ever further and greater consumption leads us to buy larger houses that we have to heat, faster cars that use more energy, and to own more clothes that will take millions of years to break down thanks to the new synthetic fibers we use to make them. Our consumption and our drive to continuously signal our wealth and social value, some would argue, is poisoning and heating our planet to dangerous levels.

 

Simler and Hanson don’t focus on the externalities of our signaling behavior in their book, but they do acknowledge that they are there. The authors simply make an argument that most of us would rather ignore. That we do things for selfish motives and reasons we don’t want to talk about. This is important if you are an economics, sociology, or policy researcher because you need to understand what people are really doing when they rally politically or make economic decisions.  For the rest of us, in our daily lives, we can take a lesson from Hanson and Simler that stems from an awareness of our self-centered behavior. We can think about our signaling behaviors and ask if conspicuous consumption is really worthwhile. We can step back and ask if the ways we signal our wealth help or hurt the planet, and we can start to make decisions with positive externalities and attempt to avoid the negative externalities I mentioned above.

More on Hiding Our Motives

Deception is a big part of being a human being. If we try, we can all think of times when we have been deceived. Someone led us to believe one thing, and then we found out that something different was really going on the whole time. If we are honest with ourselves, we can also see that we clearly try to deceive others all the time. We make ourselves seem like we are one thing, but in many ways, we are not exactly what we present ourselves as being. Sometimes we truly are genuine, but often, we are signaling a particular behavior or trait to a group so that we can be accepted, praised, and get some sort of future benefit. In order to do this really well, we create stories and ideas about why we do the things we do, deceiving even ourselves in the process. As Kevin Simler and Robin Hanson wright in their book The Elephant in the Brain, “We hide some of our motives…in order to mislead others.”

 

This is not a pretty idea of humans, and expressing this idea is an admittance that we sometimes are not as great as we like to make everyone believe. This is not an idea that is popular or that everyone will be quick to admit, but I believe that Simler and Hanson are right in saying that it is a huge driving influencer of the world around us. I also don’t think that accepting this about ourselves ends up leaving us in as sad, cynical, and dejected of a place as one might think. Humans and our social groups are complicated, and sometimes being a little deceptive, doing things with ulterior motives at their base, and behaving in a way to signal group alliance or value can be a net positive. We can recognize that we do these things, that we are deceptive, and that we deceive others by lying about our motives, and still make a good impact in the world. The altruist who donates money to the Against Malaria foundation may tell himself and everyone he knows that he donates because he wants to save people’s lives, but truly he just gets a warm glow within himself, and that is perfectly fine as long as the externality from his status seeking behavior is overwhelmingly positive (looking in the mirror on this one).

 

If we don’t accept this reality about ourselves and others then we will spend a lot of time trying to work on the wrong problem and a lot of time being confused as to why our mental models of the world don’t seem to work out. In my own life, recognizing status seeking behavior, self-deception, and motivated thinking helps me to be less judgmental toward other people. I recognize that I have the same capacity for these negative and deceptive behaviors within myself, and I choose (as much as I can) to redirect these types of behaviors in directions that have the greatest positive social impact rather than in the direction that has the greatest personal benefit for me and my feelings. Ultimately, I encourage us to be honest about the fact that we are sometimes rather dishonest and to build our awareness in a way that is easy on ourselves and others for behaving as humans naturally behave, but still nudges us in a direction where we create positive externalities where possible from these ways of being.