Daniel Finkelstein’s column in the Times Online identifies the five “sexiest ideas” in politics. British politics, that is. Thirty years ago, economics ideas were at the vanguard of public policy. Today, it’s the ideas of social psychology. Here in the U.S., the economists, not the psychologists or the political scientists, still rule the roost. If even a couple of these ideas were embraced whole heartedly by a critical mass of politicians, psychologists and behavioral economists could swell with pride. So what are the five ideas?
1) Social Norms – by which we are influenced by cues from other people in our peer group about how to behave and think. Richard Woods, also the Times, has pointed out one recent initiative by Conservative Party Leader David Cameron to harness social norms for energy efficiency.
The divide was illustrated last week when Labour aired plans for yet another nanny-state initiative – fining householders who fail to recycle enough of their rubbish. In contrast, Cameron announced plans to encourage people to save energy simply by telling people what the typical energy usage is in their area. Research shows that high users would reduce their consumption by gravitating towards the norm.
2) Reciprocal Altruism – by which we help others, even strangers, on the expectation that they will help us in return. Finkelstein says this idea makes the argument for strengthening decentralized, local institutions. Although not spelled out specifically, the logic seems to be that It is easier to trust someone like you, even if you don’t know them, in your community, instead of someone 3,000 miles away. It’s also not clear if whether local institutions encompass strong local civil societies, or whether they are more formal political or social structures. Social media and networking sites will be good places to test the strength and validity of within-community relationships. Are strong centralized institutions balanced by strong local civil societies a brave new possibility – or just an unworkable contradiction?
3) Situationism – by which we behave differently given a particular situation. The Solomon Asch experiments on conformity are a nice example of situationism. Individuals of different backgrounds and ages conformed to the group norm in Asch’s experimental set-up.
4) Prospect Theory – by which we value gains differently from losses in our decision making processes. Despite the rich theoretical and empirical tradition established by Daniel Kahneman and Amos Tversky, the powerful ideas in prospect theory have a long, long way to go to be fully integrated into public policy.
5) Cognitive dissonance – by which we bend our perceptions of the present to keep commitments or hold onto ideas from our past. Cognitive dissonance is like a form of rationalization – or a convenient excuse – for a behavior you had planned to do all along. Writing in a separate column, Finkelstein thinks cognitive dissonance is a fact of life for political parties that move from out-of-power to in-power (as the Republican Party did in 1994, or the Labour Party did in 1997). These parties, he says, suddenly advocate for policies they spent years slamming. This is not the blanket rule that Finkelstein implies it is. Republicans did, for example, make an about face on the size of government, which has not shrunk since 1994 despite GOP pledges. But the party continued to push for many of its ideas like tax cuts (successfully) and social security privatization, (unsuccessfully). Finkelstein discounts the likelihood that cognitive dissonance is bounded by ideological conviction.