Tribalism to fore in era of Trump and Brexit

Cognitive biases fascinate me. This is a fancy term for the various ways in which we delude ourselves in our thinking. Most people believe they are above average in their driving ability. This is a statistical impossibility.

Behavioural psychologists have identified a number of cognitive biases we are all susceptible to. These include delights such as “the hindsight bias, the endowment effect, the anchoring effect and loss aversion”. The most damaging is probably “the confirmation bias”. This narrows our perspectives and contributes to misunderstandings of other viewpoints.

It lies at the heart of political animosity. It provides the kindling for conflict and warfare. It creates the inability to appreciate other people’s perspectives that differ from our own.

The confirmation bias is the inherent tendency to reinforce our beliefs by surrounding ourselves with confirmation, mixing with others who share and reinforce our views. We view news, literature and social media that reinforce our beliefs. We tend to avoid or feel threatened by contrary viewpoints.

This is why politics today is so bitterly entrenched in many countries.

We don’t like having our beliefs challenged. Academics can be among the worst in this respect. In most academic disciplines the prevailing belief system is vigorously defended because careers are vested in it. It takes a tsunami of conflicting evidence to change the status quo in the academic world.

Generally we think we are far more rational than we are. Others act irrationally but we never do. Yet psychological studies have shown we all suffer significant blind spots in our thinking in aspects of life ranging from love to finances to parenting to work.

We can never be objective about ourselves. Some thinkers believe an element of self delusion is essential to a happy life, that people suffering clinical depression may have had this self delusion stripped away.

Modern economic theory is built on the concept of the rational individual seeking to maximise his or her welfare in their decision making. They are not affected by others’ decisions, they are entirely rational and independent. Behavioural economists have chipped away at this classical edifice in recent decades. They have discovered significant cognitive biases in decision making. A delightful example is illustrated in an experiment called the “ultimate game”. Two strangers are paired up. One is given $100 on condition she offers a share to the other person. If the other feels the offer is unfair he can refuse it and neither gets anything.

Results showed that if the offer was much less than 50 per cent it was usually refused and both parties lost. No one got anything. This suggests humans have a strong inherent sense of fairness which is often overlooked by conventional economic theory. If they feel a situation is unfair they would rather everyone shared the loss including themselves.

But these cognitive biases are not as irrational as they first appear. Civilisation is very recent. The instinctive behaviours shaped by thousands of years as nomadic hunters in small tribal groups still play a role in our behaviours. Evolution matters.

We are herd-like in our behaviour. Tribalism is still hugely important. A sense of belonging to a wider group is fundamental to our existence. We are certainly influenced by the behaviour and beliefs of others. This is the basis for nationalism, not to mention modern sport.

We are often myopic in our decision making because life used to be brutish and short. Better to maximise short-term pleasures. This may explain the obesity epidemic in developed economies as well as difficulties in saving for retirement. Our inherent sense of fairness is also likely a product of ancient clan loyalty and trust which was essential to survival.

It is interesting to view such recent phenomena as Brexit and Trump through the lens of cognitive biases and evolutionary instincts. Tribalism and confirmation bias dominate the current political arena. Yet perhaps the “ultimate game” is also to blame. It may be playing out on a global scale.

Those who feel excluded from the benefits of globalisation and technological progress feel a sense of unfairness. They prefer to penalise the winners even if it costs themselves. They are being rationally irrational. The big challenge for advanced democracies in the future will be to ensure that economic gains are shared fairly. The alternative could be that everyone loses.