Tag: Signals

Well Known Charities

Posted on by jabittan
Another interesting consideration about charitable giving addressed in The Elephant in the Brain has  to do with which charities we chose to donate large sums of money to. If part of our charitable donations is intended to impress other people and show them how generous and caring we are, then we want to make sure everyone understands how good our donation is.

 

As an example, I have an automatic recurring donation set up with the Against Malaria Foundation. If I wanted to tell someone about the charitable donations that I do and convince them that what I was doing was meaningful, I would have to convey to them what exactly malaria is, what the foundation does, and why it is effective. Just saying that I donate to the Against Malaria Foundation may not resonate with people the way that me telling them that I was donating to the Children’s Leukemia Support Network would. Malaria is not common in the United States and most people probably don’t understand how debilitating yet preventable it can be. Many people in the United States have heard, however, about Leukemia and probably know it is a type of cancer. Many people also probably have experience in their families of cancer (of one form or another), and know how devastating it can be. Attaching our donations to a terrible disease that people have experience with and trying to support a population such as children is a much easier sell in some regards than convincing people to donate to a charity aimed at malaria which impacts people living far away.

 

Simler and Hanson write, “Original research generates private information about which charities are worthy, but in order to signal how prosocial we are, we need to donate to charities that are publicly known to be worthy.” This leads us to donate to the Children’s Leukemia Support Network, even though the charity’s entire existence is a scam, rather than the Against Malaria Foundation which GiveWell identifies as one of the most effective charities.

 

The important thing is that we don’t really do much background with our donations and set out primarily to make big donations to well known charities that tackle things that we think we, or people close to us, might face directly. We want to feel a warm glow about our donations, and we want people to see our donations and immediately recognize what a positive difference we are making. Smaller but more effective charities that address less well known causes are left behind in favor of the bigger more well known charities, even if we could have a bigger impact on the world by making a donation to the smaller charity that people don’t immediately recognize.

 

Mass Advertising

Posted on by jabittan
Have you ever wondered why you see so many advertisements for things you cannot afford? I hadn’t thought about this very much before reading Kevin Simler and Robin Hanson’s book The Elephant in the Brain, but if you look around you will see tons of ads for expensive things that many of us won’t end up buying. I won’t buy a Rolex watch, but I can picture billboards and advertisements for them. I know the slogan that both BMW and Mercedes have at the end of their advertisements, but I likely won’t ever buy a either car. Why are companies like BMW and Rolex advertising to people like me who don’t have the money or intention to buy their products? Wouldn’t it be wiser for the companies to advertise to people who actually wanted and could afford to buy the things they sell?

 

“When BMW advertises during popular TV shows or in mass-circulation magazines,” write Simler and Hanson, “only a small fraction of the audience can actually afford a BMW. But the goal is to reinforce for non-buyers the idea that BMW is a luxury brand. To accomplish all this, BMW needs to advertise in media whose audience includes both rich and poor alike, so that the rich can see that the poor are being trained to appreciate BMW as a status symbol.”

 

Sure, we can appreciate the aesthetic beauty of the car, the horsepower, the sport performance, and the quality of the interior, but a big part of purchasing a BMW is the status symbol. If the true reason for buying a BMW were the list of things we might give as reasons for purchasing the car, then advertisers would not need to make sure that everyone knew the car was an expensive way to show one’s status. Ads could be targeted to the people who really care about car aesthetics and performance, not to people who are just going to shuttle a bunch of kids back and forth to soccer practice.

 

I try hard to be aware of the pressures I feel when making purchases or considering new purchases. I try to understand that I am pulled to make a purchase to show off my status. I also try hard to understand that owning expensive items, having a large salary, and being economically successful do not necessarily define my value as a human being. Understanding what advertisers are doing when they show ads to mass audiences about things that demonstrate our wealth and should be seen (in the mind of the advertiser) as desirable helps me keep my focus on what matters – being a good person, producing value for human beings, and avoiding negative externalities that arise from my desire to show off. This is why I think it is beneficial to understand the mind and what is happening in our heads when we see a BMW advertisement. By recognizing what impulses the ad is targeting and understanding the human drive for status, we can redirect our money and energy to things that truly matter, and away from hollow status markers.

Norms and Productive Coordination

Posted on by jabittan
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.

Issue Based Politics

Posted on by jabittan
I believe that politics has always been about identity and about how individuals understood what was in their own self-interest, but in the past politics did not carry such a strong issue based focus, which meant that politics could have more compromise and rational solutions. Jonathan Rauch looks at the ways politics has changed in recent years to understand why our system feels broken and is unable to take action on major issues. Some of the changes in our system are the result of population and demographic changes, and some of the changes in our system are the result of reforms that were intended  to make America more democratic and transparent.

Throughout his book Political Realism, Rauch quotes James Q. Wilson’s 1962 book The Amateur Democrat, noting how accurate many of Wilson’s predictions were regarding the transformations that began to take place in American democracy in the middle of the century. One quote that Rauch includes from Wilson is,

“The need to employ issues as incentives and to distinguish one’s party from the opposition along policy lines will mean that political conflict will be intensified, social cleavages will be exaggerated, party leaders will tend to be men skilled in the rhetorical arts, and the party’s ability to produce agreement by trading issue free resources will be reduced.”

Wilson accurately predicted where politics would end up as our two parties became more ideologically separated and as our parties transformed by competing against each other in a zero sum political system. Many of our decisions and opinions are not formed today through rational process, but instead are formed based entirely on our opposition to the other party. I would argue that most people don’t have a coherent set of issue stances, but instead inform their decisions based on cues from party leaders or based on signals from opposing parties. We also elect politicians based solely on their fidelity to issue stances, making compromise within legislative bodies impossible. There is no way to put politics back into the disordered system of the past where party did not exactly represent issue stances, but we should at least recognize and acknowledge that effective politics sometimes needs to be flexible on issue stances to be able to function.

What I find the most challenging in today’s political system is that we often don’t understand many of the issues that we say are our driving motivations. When asked why we vote the way we do, we often claim that we are voting because an issue is important to us and that a candidate really supports our preferences on that issue. Often times however, we don’t fully understand the issue or a candidates position on an issue. What we favor is simply that a candidate understands the political ques related to an issue and can demonstrate their loyalty to our side or their opposition to another side based on the issue in question.