(credit for featured image: jackmac34/pixabay)
How the groups with which we identify influence how we make our own trade-offs (and not always for the better)
All else being equal, when faced with two choices, a rational, self-interested person making a conscious decision is expected to go for the option that is ‘best’ – the choice that clearly provides the highest utility, as economists would say. In reality we don’t always do this, though. Much of the deviation can be explained by insights from behavioural science: cognitive biases cloud our decision-making or nudge us into a particular direction. But on other occasions, people seem consciously not to act in their material self-interest. How can this be?
Shifting the balance
“America first!” was one of the first phrases Donald Trump uttered, freshly inaugurated as the 45th president of the United States. Henceforth, policies would be about buying American and hiring American, and it seems that this sentiment is shared by a majority of his compatriots. Such patriotism is not confined to the US, though –Britain too has, at times, had concerted campaigns to entice consumers to Buy British.
The fact itself that it such campaigns or policies are apparently necessary suggests that rational consumers would normally happily purchase produce, clothes, shoes and whatnot irrespective of their origin, as long as they had the right quality at the right price. So how come politicians or marketing campaigns can make us choose differently, and to forego either quality (by buying worse products than we would buy from foreign suppliers) or financial advantage (by paying more than for the foreign version)?
One of the likely factors is that they activate our sense of belonging to the same group – a kind of shared identity. Somehow the knowledge that what we buy comes from the soil of our homeland represents a specific value to us, to the extent that it becomes part of the bargain, and we are prepared to pay more for it.
Such national chauvinism was deeply apparent during much of the second half of the last century with respect to cars. Many countries had their indigenous independent manufacturers, and global companies like GM and Ford often had national versions of their cars: German Opels were Vauxhalls in the UK, British Ford Cortinas were called Ford Taunus in Germany. You could easily tell that you were in France because nowhere else would you see as many Peugeots, Simcas, Renaults and Citroëns; the British roads carried mostly cars made by Ford, Vauxhall, Austin, Morris or Rover; and even in the Netherlands there were more little DAF cars than in any other country. Until the appearance of cheaper and better-quality Japanese cars came and disrupted that cozy nationalism.
This in-group/out-group thinking that affects how we spend money, time or attention may have its roots in the reciprocity that guides our behaviour in our closest circle: our immediate family. We do things for (and tolerate things from) our siblings, parents or children we wouldn’t necessarily do for (or find acceptable from) a stranger, because we know they are similarly disposed to us. For our ancestors that would be easily extrapolated to the tribes in which they lived: if you do someone a favour, then that is in the implicit expectation that they (or another member of the tribe) will return the favour in the future. This contributes to a shared sense of identity and togetherness which plays an important role in all manner of transactions.
Yet it is hard to see how this works as a motive on a wider scale. If you are a hairdresser in a small place, buying your groceries in the village shop may make it more likely that the keeper will have her hair done by you, but if you’re a receptionist for an American software company in Reading, buying strawberries from Lincolnshire rather than from Spain or Morocco is literally not going to affect you in an material way.
That doesn’t stop us identifying with people in numerous ways – we might be living in the same street, speak the same foreign language, read the same newspaper, perhaps we attended the same university, even though it was years apart and studying a different subject, and of course be citizens of the same country. And more often than not, we will behave differently towards people with whom we feel a shared identity than with out-group members: we are more generous towards them, as well as more lenient.
This may go some way to explain why Donald Trump’s supporters were in general rather laid back about his offensive statements. Perhaps they identified so strongly with his anti-establishment attitude that they were quite willing to forgive such transgressions in the same way that we might not disown an elderly aunt making racist comments over the Sunday roast, because we know she means well and we love her despite her fixation with people of colour.
The problem with identity politics
Within countries, political tribes have long replaced the geographic tribes from way back, but these political allegiances still fit within larger national in-groups. We may associate more or less strongly with a particular party (which acts as a divisive force) but at the same time we are unified by our citizenship of the nation. If the government of the day decides, following due democratic process, to build a new motorway through our back yard, then we may not like it, and perhaps even resist the plans. But in our eventual acceptance, it is very important that the fact that the decision was made by people of our in-group, by people with whom we identify even if they belong to a different political party. Just imagine it was a foreign power that decided to build the motorway.
But national identity as an overall unifying force can break down. The EU referendum split the UK pretty much down the middle, to the point that some people self-identified more strongly with the Leave or the Remain side, than with the country as a whole. Both in the traditional press and in the social media the signs of a strengthening in-group/out-group dynamic were plain to see. People were quite happy to overlook ‘alternative facts’ put forward by their side (like the £4,300 per year Brexit would cost each household, or the £350 million it would allow the country to invest in the National Health Service), while vigorously attacking the other side – a study by two LSE academics found speaks of ‘intense voter hostility towards people with opposing views’.
Identity politics has the potential to put so much weight in the scales of our personal trade-offs that the unifying power of a larger identity is outweighed. When this happens, the risk is that we stop caring about the interests of the people in the out-group. That may translate into mercantilism and protectionism, both of which are bad for overall economic welfare. Worse still, it may lead to the denial of political rights to out-groups, and the institutionalization of pernicious attitudes towards people with a different ethnicity, race, religion or culture, and the resulting tensions can easily lead to the kind of violence that not so long ago still blighted Europe – from Northern Ireland to Kosovo, and that is still rife for example in the Middle East and Africa, from the Israel/Palestine conflict to civil wars of Iraq and Somalia.
Identity is a self-evident, inherent part of our existence – but we really have many identities. Sometimes they will conflict, and managing them all may sometimes be a balancing act. But allowing one of them to become dominant opens the door to a new form of tribalism that threatens to destroy much of what we all value – irrespective of our identities.
And this kind of insanity is something we’d better avoid identifying with.