David Cameron, Psychohistorian?

[Zaune]

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[quote=The Guardian, September 9th 2010]
David Cameron's 'nudge unit' aims to improve economic behaviour
Cabinet office team will look at how to create environments that help people choose what's best for themselves and society


A "nudge unit" set up by David Cameron in the Cabinet Office is working on how to use behavioural economics and market signals to persuade citizens to behave in a more socially integrated way.

The unit, formally known as the Behavioural Insight Team, is being run by David Halpern, a former adviser in Tony Blair's strategy unit, and is taking advice from Richard Thaler, the Chicago professor generally recognised as popularising "nudge" theory – the idea that governments can design environments that make it easier for people to choose what is best for themselves and society.

Thaler was in London for three days this week advising ministers, and in a speech urged the government to adopt longer term horizons. The deputy prime minister, Nick Clegg, said he believed the unit could change the way citizens think.

It is reporting to a prestigious board including Jeremy Heywood, the prime minister's permanent secretary, Steve Hilton, the prime minister's strategic adviser, Sir Gus O'Donnell, the cabinet secretary, and Robert Devereux, permanent secretary at the Department of Transport and head of the civil service policy profession. The unit has a two-year life, and its work will be reviewed after a year.

Behavioural work was undertaken by Tony Blair; under Gordon Brown the emphasis shifted to changes in the law and regulations. The aim of the unit, strongly supported by George Osborne, is to explore ways of encouraging citizens to behave in social ways relying on market incentives, as opposed to regulations. The initial work of the unit will be focused on areas such as public health issues such as obesity, alcohol intake or organ donation.

Halpern, author of the highly praised Hidden Wealth of Nations, has argued that a society of trustworthy citizens is a platform for economic growth and individual wellbeing.

Thaler has focused on how to nurture an individual's better instincts, or how to use nudge methods to persuade people, for instance, to save for retirement or hold back on excessive consumption.

In his speech, Clegg warned of citizens becoming short-termist, one of the traits nudge theory seeks to resist.

He said: "The question is whether our capacity to balance the immediate with the long-term is keeping pace with the expansion of choice.

"In real life, people eat doughnuts, decide not to go for a run, and put off making payments into their pension fund. The economists say this means we are engaged in an 'irrational discounting of time'. The rest of us describe it as being human."

He said: "The challenge is to find ways to encourage people to act in their own and in society's long-term interest, while respecting individual freedom."[/quote]

BBC blogger Adam Curtis adds a few more details here. It's a long post with a number of embedded videos, so I'll only quote a few passages to give you the general idea.

[quote= The Medium And The Message, November 16th 2010]The Behavioural Insights Team believe ... that in many cases you can't trust the people. That if you let them just follow their desires they will often do things that are bad both for themselves and for society.

This doesn't mean you get rid of the market. Instead governments should find ways to manipulate ordinary peoples' feelings and desires so they "choose" to do the right thing.

Behind this are the ideas of what is called Behavioural Economics. They were popularised by a book called "Nudge" written by Richard Thaler and Cass Sunstein.

The idea of "nudging" citizens to do the right thing sounds cute. But in reality it marks the return of a powerful psycho-political theory that rose up in the mid-20th century. It was called Behaviourism. And it was hated by both the right and the left.

Behaviourism's most famous exponent was an American psychologist called B. F. Skinner who was an idealist and a utopian. He believed that his techniques of behaviour modification could be used to create a completely new kind of world.

In the 1960s and 70s Skinner became a controversial figure. Students in America and Britain protested wherever he spoke.

The reason was that Skinner showed just how easy it was to manipulate and change human behaviour. He called it "operant conditioning". Skinner used pigeons to demonstrate how you simply "reinforced" the behaviour you wanted with rewards.

And humans, Skinner said, are just like pigeons.

[...]

Skinner's guiding belief was that you completely ignored what went on inside the minds of human beings. The thoughts and feelings that went on inside the "black box" - as he called it - were unmeasurable and ultimately unknowable.

Instead you observed human behaviour from the outside. That was the only reality that could be scientifically described.

In this way Skinner was part of a much greater tradition that has been forgotten in our age of individualism. An age where our feelings are the most important thing.

But from the 1930s through to the end of the 1950s Sociology and Social and Market research were dominated by a behaviourist approach that observed, quantified and categorised human behaviour scientifically into groups whose behaviour could then be predicted.

Two powerful men helped shape this movement in the late 30s in America. One was a psychologist called Frank Stanton, who later ran CBS television. The other was a social scientist called Paul Lazarsfeld.

Stanton was fascinated by behaviourist psychology - and the two men developed all kinds of ways to measure and categorise human behaviour as mass consumerism developed.

[...]

Lazarsfeld had an enormous influence on a British market researcher who I am fascinated by.

He was called Mark Abrams.

In the 1950s Abrams did as much as any politician to shape the way British society thought about itself. This is because he invented what is called the Social Grades system. It divides people into six categories - A, B, C1, C2, D and E.

Abrams originally developed the Social Grades for the National Readership Survey - so publishers of newspapers and magazines could objectively classify their readers.

But the six types quickly became far more than that. They worked their way deep into the national psyche, shaping the way people looked at themselves and their relationship to others. ... The A, B, C1, C2, D and E categories were created by Abrams as scientific, objective ways of dividing the population into groups.

But that is not the way television-makers saw them...[/quote]

As you can tell from the thread title, when reading this blog entry I was immediately reminded of the Foundation trilogy. (Incidentally, B.F Skinner looks a lot like how I always envisioned Hari Seldon.) A friend of mine who had less pretentious literary tastes as a teenager thought of Norsefire.

This isn't going to end well.

[Phantasee]

I don't know, I think it's just an extension of what governments have always done through regulation. Subsidise fuel so the economy favours truck transportation over trains, tax breaks for home ownership, the government has a long history of nudging people.

[Rye]

I'm cool with it, far more cool with it than, say, reducing taxes on the richest. If it works, go for it.

[TheKwas]

Breaking news, economists study incentives!

I see nothing particularly note-worthy in this article. Cameron has assigned a team to study how government can manipulate incentives to make a better society. Sounds interesting, but most of this research has already been done by countless of economists and psychologists around the world, so at best I see this team summarizing research and making specific suggestions based on that research.

Also, connecting Behavioral Economics with Behavioral Psychology is misleading, as they don't represent the same approach. Behavioral Psychology is an approach to psychology where you treat the mind as a black box and make zero inferences about internal dialogue, while Behavioral Economics is a general term for any economics that studies economic decisions using psychology (of any approach) instead of the utility-maximizing rational individual assumption. Behavioral Economics has really nothing to say about Behavioral Psychology vs other approaches to psychology.

Why won't this end well? This is what governments have always done, and using incentives is almost always a better method than using strict regulations.

[Zaune]

There's incentives and there's glorified Pavlov training, that's all I'm saying.

[Phantasee]

Care to explain why this is an issue? What will the government do differently in this case that you don't agree with?