Sunday, May 31, 2015

Why Democrats fight dirty to defend the status quo.

One country, two parties. One party is defending the Blue Model; the “Blue Beast” -- government and those who benefit from outsized government control. The other party wants more freedom, more pluralism, less government. But it doesn’t control government, the media, the culture, the upper reaches of crony capitalism. It lacks the power of the state.

We have frequently quoted Cornell economist and author of Luxury Fever Robert Frank, "Animals will fight viciously to protect territory that they hold, but they won't fight nearly as hard to extend their territory."  

“fight viciously.”

Frank has explained the dynamic of America’s current two-party system. In a report for the BBC, correspondent Jonny Dymond informed us that:
we are hard-wired to be more concerned about losing something we have than we are enthused about gaining something in the future. Behavioural psychologists call it the "endowment effect" or "status quo bias". And campaign strategists exploit it to the full.
Dymond had learned from a June 19, 2008 article in the Economist that introduced readers to the “endowment effect”:
once someone owns something, he places a higher value on it than he did when he acquired it—an observation first called “the endowment effect” [in 1980] by Richard Thaler, who these days works at the University of Chicago. . .
[The] neoclassical economists[’] assumption [is] that individuals act to maximise their welfare (the defining characteristic of economic man, or Homo economicus). The value someone puts on something should not, therefore, depend on whether he actually owns it. But the endowment effect has been seen in hundreds of experiments, the most famous of which found that students were surprisingly reluctant to trade a coffee mug they had been given for a bar of chocolate, even though they did not prefer coffee mugs to chocolate when given a straight choice between the two.
Brian Knutson of Stanford University describes a brain-scanning study he carried out recently. The pattern and location of the activity he observed suggests the endowment effect works by enhancing the salience of possible loss.
what is going on? Owen Jones, a professor of law and biology at Vanderbilt University, and Sarah Brosnan, a primatologist at Georgia State University, suspect the answer is that, in the evolutionary past, giving things up, even when an apparently fair exchange seemed to be on offer, was just too risky.
The [endowment effect] complicates the negotiation of contracts, as people demand more to give up standard provisions than they would have been willing to pay had they bargained anew.
In “Bloomberg,” Michael Lewis reports on parellel findings made by Amos Tversky and Daniel Kahneman, psychologists at the Hebrew University in Jerusalem.  Tversky and Kahneman concluded that:
human beings were not just occasionally irrational, but systematically irrational.  They had predictable biases -- for instance, they were inclined to draw radical conclusions from tiny amounts of information.   .   . most significantly, people responded very differently when a choice was framed as a loss than when it was framed as a gain. Tell a person that he had a 95% chance of surviving some medical procedure and he was far more likely to submit to it than if you told him he had a 5% chance of dying.
Looking at the worst of politics in my lifetime -- Southern segregationist violence against civil rights protesters in the early 1960’s, the 1968 Chicago Democratic Convention police riot, shooting student protesters at Kent State in 1970, Nixon’s Watergate in 1972, Lee Atwater’s crypto-racist Willie Horton ads used to extend the Reagan-Bush era in 1988, the systematic, personal attacks on Newt Gingrich, Bob Livingston, Henry Hyde, and Ken Starr, justified by the Atwater model and used to defend Bill Clinton in the late 1990s, and the systematic, personal attacks on John Boehner, Paul Ryan, and especially Mitt Romney in 2012 -- all occurring when the party in power is on the losing side of the issues, shows me the viciousness of status quo defenders holding onto what they have.

The endowment effect.

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