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Coming at the world from an unexpected angle, far too fast to stop.

Mitt and the Mad Science

NewsPosted by Pelotard 2012-10-26 14:49:33

No, this isn’t going to be an effort to explain air pressure to Mitt Romney. Nor is it going to be an investigation of his scientific agenda. Nor, I’m sorry to say, will it be about magic underwear; it’s an interesting notion but I understand it’s a religious practice and so outside the remit of what science really does. (Although it might be more fun if it did.)

But I bet you didn’t know that science can tell you whether Romney’s income tax costs him votes and why poor people don’t take out health insurance.

Economy and politics have tried to answer questions like this for us, and the results have been, at best, of limited value. I recently watched two people on Facebook descend into a shouting match over what tax levels were “fair”, and this is, of course, an issue that science can never resolve. But what science can do is to tease human behaviour apart, in controlled experiments, and tell us what humans, by and large, on average, think is fair. And it can even take a stab at why.

Consider the Ultimatum Game. It’s not a game, really; it’s a psychological and anthropological experiment. Works like this:

I’m given £100. I must now offer you a portion of this. If you accept, we get to keep the money. If you decline, neither of us gets anything.

Logically, you should accept an offer of £1. You’re better off than before, anything you get is free money. Right?

Wrong.

It turns out that almost nobody will accept less than £10. The exact cut-off depends partly on what culture you were brought up in, but mostly on personal preference. Some studies report averages as high as 35%, while most reports that I’ve found seem to mention values in the region of 20% or a bit above. As for the offers, if they’re done freely, most people from industrialised societies will offer around 1/3, but many people from pre-industrialised societies will offer £50.

But hey, isn’t this completely irrational?

Yes and no. There’s one thing that makes humans very different from other animals, and it’s not the pointed stick, the wheel or the aircraft carrier. It’s something much more fundamental.

Humans cooperate.

In the hunter-gatherer society, which can serve as a sort of approximation of “humans in the wild,” we go out, collect food, and bring it home to the tribe to share. The people who do it best command great respect, usually get the first pick, and in all likelihood ate the honey on the way home and piled all the tubers they found on the heap, but brain scans confirm that humans get happy by sharing. Completely unique, and counter-intuitive, but also completely unmistakable. This is how humans behave, and blimey, it works: there used to be only a handful of us, and we’re now the second most numerous land vertebrate on the planet.

Evolutionary scientists are struggling to explain exactly how this developed, and Mitt Romney is probably more comfortable with a statement that this is how God created us. But the beauty of science is that this does not matter: the observable consequences are that we’re wired to share our riches, and likewise punish people who try to get away with too much, even to the point of punishing ourselves just to get back at them.

You might think that this is a sorry state of affairs, but it helped us to get through e.g. the Black Death, so obviously there’s some merit to it. And you might agree with a quote ascribed to Marlene Dietrich: “Natural? Pah! So’s measles.” Still, this is how real people behave in real situations. It’s not irrational, except in the very short term; it’s rational for us to be constructed that way. Ayn Rand might complain, but egoism—to the extent that we grab as much as we can hold on to, and kick everyone else in the teeth to keep it—is not how human nature works, it’s not how we build the trust and co-operation that’s necessary for a reasonably complex society, and it’s not how to construct a society when your building blocks are all human beings.

What’s this got to do with Romney, then?

He’s shared his income declarations, that’s what. And it turns out he pays about 14% tax on his income.

I’m sure this is perfectly in agreement with what he’s required by law to pay, and I’ve even heard reports that he could have paid less, had he used all available deductions. He also pays sales tax on everything he buys, although I’ll be blessed if I can figure out how anyone is physically able to spend as money as he makes while still having enough hours in the day to do any work. But given the results of the Ultimatum Game, for many people, this is not enough. Lots of people will think that a “fair share” is around 30%, and paying less than 20% is extremely risky for anyone who is actively trying to get people to like him.

But hey, didn’t he pay something like 1.9 million USD? Surely, that’s more than reasonable? After all, it’s enough to support some 50 people on a reasonable standard of living, besides himself on an unreasonable one.

It’s a valid objection that research projects usually aren’t allowed to hand out life-changing amounts of money. It’s hard to get any budget approved; you usually have to point to stuff like large gadgets and hope the approval board like big toys. (Frankly, it’s anybody’s guess how they managed to get permission to just hand out research money to people. Possibly the approval board were the first to have a go.) Fortunately, there’s a simpler way: you can get the research budget to cover airplane tickets to a place where wages are considerably lower, and do the same experiment there. In at least one study, they went to Indonesia and gave away the local equivalent of a month’s salary–not “life-changing”, exactly, but enough to make a significant contribution to the household budget.

Results? Pretty much the same. People would offer around 1/3, which was probably shat they guessed was acceptable to the recipient with a decent safety margin; when offers were artificially restricted, acceptance dropped off significantly when the offers went below 25%.

So, the results have held up as far as anyone’s been able to study them, and frankly, this is science, so if you want to disprove a result, you'll have to come up with hard data. If anyone has the budget to study really life-changing amounts, I volunteer as a study subject.

As for the health insurance, I think we'll save that for later.

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