Apart from living amidst the pandemic , we have also been living in a time where prejudices against ethnic minorities have been growing. This has been happening throughout the world and has been one of the staple strategies for populist leaders in different countries. As I go further into the book ‘Good Economics for Hard times’, it takes an interesting lens of studying the rise of this animus sentiment through an economist’s point of view.
The book begins this by venturing into the idea of what does it mean to have beliefs regarding something and how it differs from preferences. Preferences reflect whether we prefer mountains to beaches, sweet to salty , or brown to white or as in our society , upper caste to lower caste. People can be wrong about beliefs but not about preferences , an aspect of which is explained through Folk theorem (explained further in the post) , which is one of the great achievements of game theory.
What about when we can we be so wrong about our beliefs which inherently shapes our preferences? Our beliefs about ourselves are shaped through our emotional needs and we cannot let ourselves down. As it’s said in the book that , ” Since we want to shield ourselves from our own prejudices , we couch in the language of objective truth”. No one likes to believe that they were wrong about something and we avoid information that would make us feel like that. We rationalize our thought patterns and behaviors by blaming someone else and we look for the tiniest piece of information to turn this defense mechanism into a full fledged coherent thought process. This pattern has numerous implications and one of them is clearly stated in the book where during the last US presidential elections , Hilary Clinton accuses people of racism and called them ‘deplorables’. This act alerts one’s defense mechanism as no one like’s one’s moral sense assaulted. People immediately stopped listening and when Trump during the same time mentioned that there are bad people on ‘both sides’, it clearly turned out to be an effective strategy as these remarks make people feel better about themselves.
Economics is very much tolerant of different worldviews, as we can make sure that the right information is available( But in the age of ‘ I received it on Whatsapp’, I doubt it) and then it is left to the people to make their preferences. There is often hope that market will take care of bigotry as people with narrow mindedness will suffer with the width of the consumer base they can have and will not succeed. This , though is an ideal approach towards the market and it does not always pan out that way. Bigotry can be good for business and as our government shows, it can be good for politics too. It is also a dark reflection of what we value. The authors make a promising case as what gives shape to these preferences.
They introduce a concept called ‘information cascade arising through Herd Behaviour’ which helps in understanding the rise in mob lynching cases on the basis of religion. It broadly means that the information on which first people make their decisions will have a magnanimous influence on what all others believe. They proved this through an experiment where some researchers worked with a website that aggregates advice on restaurants and other services. The users can post comments, like and dislike and the website randomly chose a bunch of comments and gave them an artificial upvote as soon as it was published. It also simultaneously chose a bunch of comments and gave it a downvote. The interesting finding of the result is that the bunch of random comments that received an upvote, the probability that the next user also gave an upvote increased by 32 percent. The influence of this initial nudge grew despite the fact that the post had been viewed a million times. This experiment conveyed a simple thing that even though our preferences do not directly depend on what other people do but their pattern of thought can alter our beliefs and behavior. It starts from inferring something as simple as, that may be wearing Nike shoes can make you run faster or getting your hair colored full blonde can look good or getting a tattoo may not be all that bad or that this harmless looking Muslim man is capable of committing a heinous crime.
The book delves further into this by raising a thought provoking question that “ how do we explain that people will sometimes do things they know not be in their immediate self interest ( for example, getting a tattoo that they might find ugly or lynching a Muslim man at the risk of being arrested) just because their friends do it? ”
We have often believed that communities play a positive role in shaping of villages and cities but these norms can be self-enforcing which as it turns out is not necessarily a good thing. The rationale behind sticking to these social norms and abiding by your community belief is explained through Folk Theorem. It explains why norms our so powerful by experiments that have been conducted by Elinor Ostrom . The theorem arises from the idea of norms about how community members were supposed to behave that everyone stuck to. Anyone who did not abide by it was excluded from the community. This can be explained through the idea of collective ownership of land that exists in the tribal India till today. The main aim behind this is in case of any economic disparity or some disaster , there is some common resource which the individuals can turn to and they have to abide by a set of rules to gain access to that resource. It also suggests why the communities in villages are so tightly knit , which on the facade can look like a selfless act but is in fact an act of self preservation because it is partly done anticipating that the same kind of help will be reciprocated when needed. Systems of mutual help are more prone to collapsing if one member goes out seeking for opportunity and thereby defaulting on obligations. This could lead to more people venturing out for personal benefits and hence the community is very alert to the behavior that defies cultural norms. As the research by Elinor Ostrom mentions , the discipline these norms introduce can also be targeted towards some reactionary , violent or some destructive cause. This can be clearly demonstrated through the discrimination that persists on the basis of caste , which also in a way is supported by the Gandhian philosophy, that the future of India lies in villages where it inherently means that certain groups of people are supposed to do certain tasks their entire life. It is not advisable to break the hierarchy of the society (defying the cultural norm) whereas his opponent, Dr. B.R. Ambedkar described villages as a ” sink of localism, a den of ignorance, narrow mindedness and communalism”
Another interesting analogy that is befitting this ideology that the power certain people have in shaping other’s beliefs in promise of social security , is when the Bolsheviks overthrew the provisional government in Russia in 1917. Maxim Gorky, a Russian soviet writer and also a friend of Vladimir Lenin criticized the regime under him by stating that the “proletariats” are aiming at delivering instant justices to their class enemies. He directly accused Lenin of turning people into murderers. A pattern which has been on the rise in current India where lynchings have been increasing. Which make us question , are these people doing this out a coherent thought process or are sticking to a norm?
The book also introduces the concept of ‘statistical discrimination’ and ‘self-reinforcing discrimination’ which helped me understand why caste-based reservations are in-fact necessary to break the cycle of poverty or the lack of opportunity. I would like to begin this with my own personal experience where I was introduced to caste based preferences or say preferences based on the language you speak, the ethnicity you represent often becoming a bonding point for most people. This is something that I observed over the past few years where people seemed to bond with people that spoke the same language, or had similar gestures and sometimes even the same caste. This is not a bad thing per say because we has humans seek out for comfort but this also implies that people have biases against their own selves. The people who belong to difficult economic backgrounds end up befriending people who also come from economically adverse situations. The downside to this behavior is we hold back not just on our own identity but also limit the potential of what we could be. This sometimes doesn’t let us perform to the best of our potential because we believe we can never escape the perils of identity that caste or economy brings with it. Self discrimination is reinforcing which also gives rise to statistical discrimination which affirms our belief of lower caste people in India are poor or that they are in that state because they end up performing jobs that do not enable them to come out of this trap. This is also takes us back to the original argument of Gandhian philosophy which perpetuates the belief that certain people are to do certain type of tasks their entire life. That’s why I believe the need for external instruments such as reservations arise , where it becomes necessary to provide the needed opportunity for people to come out of this trap.
All in all , it is necessary to be aware of our beliefs which shape our preferences and forms our views towards ethnicity, caste as an identity, idea of a community etc. because these form the foundation for equality and growth.
Weekly Musings 
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