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.

Changing Our Speaking and Advice Giving Habit

Michael Bungay Stanier’s book The Coaching Habit is all about changing the ways we relate to others by changing how we give advice to, listen to, and generally speak with those around us. Most of the time, as Robin Hanson and Kevin Simler explain in their book The Elephant in the Brain, we are in a hurry to share what we know, give advice, and speak up. Bungay Stanier suggests that what we should be doing, if we truly want to change our coaching habit to be more effective and helpful for those around us, is spend more time listening and more time asking questions rather than giving advice and speaking. Hanson and Simler suggest that our urge to be helpful by speaking and giving advice is our brain’s way to show how wise, connected, and valuable we are, but the problem as Bungay Stanier would argue, is that this gets in the way of actually developing another person and helping someone else grow.

 

To make a change in our speaking habit, first we must understand what we want to change and we must focus on the why behind our change. Once we have built the self-awareness to recognize that we need to change, we need to understand what is driving the habit that we are working to get away from. This is why I introduced Hanson and Simler’s book above. If the habit we want to change is speaking too much and not asking enough questions, we need to understand that when we are coaching or helping another, we are driving to give advice in part to demonstrate how smart we are and how vast our experiences are. We are driven in other words, to not help the other but to boast about ourselves. Understanding this small part helps us know what we actually want to change and what is driving the original habit.

 

Bungay Stanier references another book, The Power of Habit by Charles Duhigg, and writes, “if you don’t know what triggers the old behavior, you’ll never change it because you’ll already be doing it before you know it.” The self-awareness necessary in changing habits requires us to first see what needs to change, second to identify the ‘why’ behind our desired change, and third to become aware of the small things that trigger our habit. If we know that having our phone near our bed leads to us being more likely to check Facebook first thing in the morning, then we can remove that trigger by placing the phone in another room and finding a new alarm. Ultimately we can be more likely to succeed in changing our habit of checking Facebook as soon as we wake up. Similarly, Bungay Stanier would agree, knowing that we provide advice to make ourselves look valuable to society helps us see the mental triggers that encourage us to share bad advice rather than to listen and ask helpful questions. Ultimately, to change our habit we need to further expand self-awareness to recognize not just the change we want to make and the reason we want to make a change, but to also recognize the large and small things that drive us into our old habits. Addressing these triggers and structuring our life in a way to avoid them can help us be more successful in changing habits for the better.

Machines Versus Partisianship

Political parties seem to have a problem today. Voters dislike being part of a political party and have choosen to register or refer to themselves as non-partisan in greater numbers today than in the past. Political parties have also lost control of their candidate nominations, and when a party makes a big push toward their preferred candidate, cries of corruption and system rigging erupt from the public.

However, at the same time, voters more consistently vote for a single party today than they did in the past. When we look at voters who register non-partisan and ask if they lean toward a particular party, we see that they overwhelmingly vote for members of that party in each election. Non-partisan voters who lean toward a party often end up voting along party lines at the same or higher rates as voters who are registered with a party. So while our parties seem to be loosing steam, partisanship seems to be growing.

Jonathan Rauch looks at this phenomenon from another perspective in his book Political Realism. He specifically looks at votes within congress and how congressional members seem to align within parties. Rauch writes,

“It’s often said that parties are stronger than ever because votes on Capitol Hill are so consistently partisan. But that can be (and usually is) because the majority party is allowing votes only when its factions agree, whereas machines facilitate decision-making when fellow partisans don’t agree. Ideological solidarity is a brittle glue, and reliance on it for intra-party cohesion is a sign of a weak party machine, not a strong one.”

What Rauch argues is that our parties need to find ways to create cohesion beyond ideology. Rather than relying on individual voter or policy maker issue stances to align, parties need to be able to bring different groups together within the political process. Parties which are only able to attract loosely committed voters fail to create a community of thoughtful and considerate political participants. The perspectives, views, and alternatives available to the party shrink, and in the public we see a fixation on a single issue from a single point of view, while in legislative bodies we see a limited number of votes on a limited number of partisan issues. This does not strengthen democracy, and easily breaks down, leading to the cynicism, criticism, and frustration that we see surrounding the American political system today.

I also think there is another phenomenon surrounding the abandonment of political parties and the staunch partisan voting pattern in the United States. Political identity is a powerful signal, indicating which group you are a part of and often influenced by both overt and hidden factors. In The Elephant and the Brain, Kevin Simler and Robin Hanson look at our hidden agendas and our group signaling in politics. We often don’t want to admin when we align with a party out of self interest or out of group identification. We hide behind a veil claiming that it is specific issues that drive our political alignment, but studies frequently show that almost no one has a real grasp of any given issue or any given legislator’s stance on an issue. What we are really displaying today, at least in part, is an institutional distrust driving us away from the parties that we complain about, but an identity stronghold in the claimed political philosophy that we back. Simler and Hanson may better explain why we see this pattern and if Rauch is right, then we must hope that machines can be built to activate local public action before dangerous demagogues use this identity and signaling undercurrent to divide rather than unite local communities.

Political Realism

The last presidential election in the United States was undoubtedly an election unconstrained by political reality, feasibility, and truth. Both parties saw candidates from the outside make huge promises and sweeping generalizations during the campaign, with little or no consideration for how things could actually work in our political environment and economic system. President Trump outlandishly called for a wall along our southern border though few felt that it would be practical, possible, or effective, and Senator Sanders passionately announced his desire for a new healthcare system run entirely by the federal government, all the while downplaying the program’s costs, its political unfeasibility, and the fact that he did not have much of the implementation planned out.

 

Political realism operates in a different way than seems to be successful in our extravagant presidential elections. We prize bold energetic ideas and characters when electing a president, and realism is left to the side. To be a political realist, you have to be honest about the current situation, about how the status quo could change, and about what improvements or harms could possible arise. Observing that the status quo is not too bad and that there are may potentially worse situations that society could be facing does not win elections, but being more aware and asking these types of questions does help government improve.

 

Large grandiose plans and visions do not hold up over the long term. It is important for policy planners and decision-makers to think about political feasibility and to think about alternatives so that plans can be chosen that can actually be implemented and to meet the needs of society. We live in a world with limited resources like time and money, so we must think rationally and strategically about what we have. Large sweeping changes and plans are difficult because they must find a new way to rearrange the already limited resources we have.

 

Jonathan Rauch describes political realists in his book Political Realism by writing, “Always, the realists, asks: ‘Compared with what?’ Principles alone mean little until examined in the harsh light of real-world alternatives.” When we elect leaders based entirely on principle and charisma, and not based on an evaluation of alternatives, we end up in a place where good plans are abandoned for fantastic plans that could never truly be put in place, at least not in a good way. When our leaders are constrained to a limited set of principles, their policy options are limited and less imaginative, and as a result, good policy is thrown out. If we can’t meet all our principles in this model (our current model for politics) then we don’t take any action and we don’t improve the status quo in any meaningful way. Political realism isn’t sexy and doesn’t always win elections, but it does help society move forward with policy that can actually be implemented.

 

Today, as I reflect back on this quick post that I originally wrote in May of 2018, I can’t help but think about the power of signaling. At the end of the school semester I read Robin Hanson and Kevin Simler’s book The Elephant in the Brain and was captivated by a conversation that Hanson had with Tyler Cowen. Much of what we do in politics is signaling, and describing grandiose plans and visions signals your belief in the future prosperity of the country. Your huge plan is also a signal to voters that they should align with you because you think that what we need is the most scaled up version of what your co-partisans say is necessary. In a sense, politicians are signaling their loyalty and willingness to defend party ideas, even if those ideas are practically impossible. Political realism just can’t bring the same signaling firepower to the conversation, and may ultimately signal a betrayal of the party platform and a betrayal of a core group identity.