By Bob Seawright, Above the Market
Homo economicus is a myth. This alleged “rational man” is as non-existent as the Loch Ness Monster, Bigfoot and (perhaps) moderate Republicans. Yet the idea that we’re essentially rational creatures is a very seductive myth, especially as and when we relate the concept to ourselves (few lose money preying on another’s ego). In fact, we tend to think that we’re almost superhuman in our ability to invoke reason to our advantage.
“What a piece of work is a man! How noble in reason! how infinite in faculty! in form, in moving, how express and admirable! in action how like an angel! in apprehension how like a god! the beauty of the world! the paragon of animals!”
Of course, there are some very good reasons to stand awestruck at what human reason can accomplish, particularly in the areas of science, technology and engineering. But you might also recall what became of Hamlet. We are much less rational than we assume.
We love to think that we’re like judges, objective and rational actors carefully examining and weighing the available evidence in order to reach the best possible conclusions. Instead, most of the time we’re much more like lawyers, running around in search of something (anything!) that we can manipulate to the advantage of our preconceived notions while ignoring or denying any and all contrary evidence.
If we aren’t really careful, we will remain convinced that we routinely see things the way they really are when the truth is much more complex. Most of the time we see things the way we really are.
We are ideological through-and-through. The existence and prominence of both right and left-wing news channels on American television, each of which proclaims that it offers truth while the other is biased (their viewers agree, of course), should be more than enough evidence to make the point. As CBS President and CEO Les Moonvestold CNN’s Brian Stelter Sunday about television news, “people like to see people who agree with them.”
But there’s more.
A new study from Duke University (where I went to school) finds that we evaluate evidence – even scientific evidence – based on whether they see its policy implications as ideologically palatable. If we don’t, we tend to deny the problem even exists. As study co-author Troy Campbell, a Ph.D. candidate at Duke’s Fuqua School of Business, points out, “The cure can be more immediately threatening than the problem.” Moreover, “The more threatening a solution is to a person, the more likely that person is to deny the problem,”according to co-author Aaron Kay, an associate professor at Fuqua.
The researchers conducted experiments on three different issues – climate change, air pollution, and crime. The climate change experiment tested why more Republicans than Democrats seem to deny its existence, despite strong scientific evidence that supports it. Participants in the study read a statement asserting that global temperatures will rise 3.2 degrees in the 21st century and were then asked to evaluate a proposed policy solution to address it. When the policy solution emphasized a tax on carbon emissions or some other form of government regulation, only 22 percent of Republicans said they believed the temperatures would rise at least as much as indicated by the statement they read. But when the proposed policy solution instead emphasized the free market, such as with innovative green technology, 55 percent of Republicans (two and a half times more!) agreed with the warming statement.
This finding will not surprise Democrats, who have long argued that reality skews leftgenerally and that Republicans have a long history of being willing to deny the obvious about climate change and otherwise. In other words, they draw a distinction between the “reality-based community” and Republican ideologues, who are guilty of “epistemic closure” in that they remain “worryingly untethered from reality as the impetus to satisfy the demand for red meat overtakes any motivation to report accurately.” It’s a consistent trope among active Democrats who see themselves as superior in that respect.
However, and consistent with the research of Yale’s Dan Kahan on motivated reasoning, the solution aversion found by Campbell and Kay cuts across ideological lines. It’s a harsh realm, but even liberals are lamestain members of the tom-tom club only wishing we could be swingin’ in the flippity-flop with the cool kids (so to speak).
In the gun control study, participants were told either that they would read an article arguing that “strict gun control laws prevent homeowners from getting guns that they could use to protect themselves from intruder violence” and then read an article espousing this pro-gun rights ideal or they were told that they would read an article arguing that “loose gun control laws lead to more gun violence by intruders and more homeowner deaths” and then read an article espousing this pro-gun control ideal.
Participants were then asked to read about “Intruder violence — the act of breaking into a home and attacking the resident, usually as part of a robbery. Intruder violence often ends in the death or injury of the resident.” Consistent with the solution aversion expressed by Republicans concerning climate change, liberal participants who had a strong pro-gun control ideology indicated a significantly higher belief in the severity of intruder violence when the solution was gun control friendly than when it was friendly toward the possibility of arming civilians.
I frequently note that investing successfully is very difficult. And so it is. But the reasons why that is so go well beyond the technical aspects of investing itself. Sometimes it is retaining honesty, lucidity and simplicity – seeing what is really there – that is what’s so hard. That inconvenient truth tends to inhibit the understanding of all of us, irrespective of ideology. That’s because, despite what we want to think, we’re hardly rational. We’re ideological through-and-through.