How lies work

Nick Cohen makes a good point: it is not congenital liars that should worry us, but congenital believers – those who fall for the lies of charlatans. We know that many do so: almost half of voters believed the lie that leaving the EU would allow us to spend an extra £350m a week on the NHS.

This poses the question: why do people fall for lies? Here, we can learn from behavioural economics and research (pdf) into criminal fraud. I reckon there are several factors that liars exploit in politics.

One is wishful thinking. People want to believe there’s a simple solution to NHS underfunding (leave the EU!) or to low wages (cut immigration!) just as they want to believe they can get rich quick or make money by taking no risk: Ponzi schemers like Bernie Madoff play upon that last one. The wish is often the father to the belief.

Relatedly, perhaps, there are lottery-type preferences. People like long-odds bets and pay too much for them: this is why they back longshots (pdf) too much and pay over the odds for speculative shares. To such people, the fact that an offer seems too good to be true is therefore, paradoxically, tempting. A study of fraud by the OFT found:

Some people viewed responding to a scam as taking a long-odds gamble: they recognised that there was something wrong with the offer, but the size of the possible prize or reward (relative to the initial outlay) induced them to give it a try on the off-chance that it might be genuine.

There’s a particular type that is especially likely to take a long-odds bet: the desperate. Lonely people are vulnerable to the romance scam; gamblers who have lost take big bets to get even; losing teams try “hail Mary” tactics. In like fashion, people who feel like they have lost out in the era of globalization were tempted to vote for Trump and Brexit.

There’s another mechanism here: people are likely to turn to con-men if the alternatives have failed. Werner Troesken shows (pdf) how snake-oil sellers exploited this. They invested a lot in advertising and in product differentiation and so when other products failed they could claim that theirs would work when the others hadn’t. I suspect that fund managers use a similar trick: the failure of many to beat the market leads investors simply to trust others rather than tracker funds. The fact that previous policies had failed working people thus encouraged them to try something different – be it Brexit or Trump.

Yet another trick here is the affinity fraud. We tend to trust people like ourselves, or who at least who look like ourselves. Farage’s endless posturing as a “man of the people” – fag and pint in hand, not caring about “political correctness” – laid the basis for people to trust him, just as Bernie Madoff joined all the right clubs to encourage wealthy (often Jewish) folk to trust him. By contrast, the claims from the Treasury and various think-tanks that Brexit would make us poorer came from metropolitan elites who were so different from poorer working class people that they weren’t trusted. And in fact the very talk of "liberal elites" carried the subtext: "don't trust them: they're not like you".

All of these tendencies have been reinforced by another – the fact that, as David Leiser and Zeev Kril have shown, people are bad at making connections in economics. The idea that Brexit would hurt us rested upon tricky connections: between the terms of Brexit and trade rules; from trade rules to actual trade; and from trade to productivity. By contrast, the idea that leaving the EU would save us money was simple and easy to believe.

Now, I don’t say all this merely to be a Remoaner; complaining about liars is like a fish complaining that the water is wet. Instead, I want to point out that it is not sufficient to blame the BBC for not calling out Brexiters’ lies. Yes, the BBC disgraced itself during the plebiscite campaign. But we must also understand how voters fall for such mendacity. As Akerlof and Shiller write:

Voters are phishable in two major ways. First, they are not fully informed; they are information phools. Second, voters are also psychological phools; for example, because they respond to appeals such as lawnmower ads [a candidate seen mowing his own lawn is regarded as a man of the people] (Phishing for Phools, p 75)

All this raises a challenge for liberals. Many used to believe the truth would win out over lies in the marketplace for ideas. This is no longer true, if it ever were. Instead, the questions now are: what can we do about this? And what should we do? The two questions might well have different answers. But we can make a start by understanding how lies are sometimes believed.

Comments

[Jim]

If you think the Remain camp were telling the 'truth' then that says it all about you..............

[Keith]

The marketplace of ideas assumes that the consumers are able and willing to inform themselves and be rational rather than emotional. Clearly this is not true of a lot of voters when confronted by a manipulative press and Tories like Jim with their right wing agenda slyly hidden for the time being.

Equally as in other areas such as health care shopping around is impossible to do as the consumers lack expert knowledge. Allowing the profit motive to apply to many areas is sure to be a disaster for human welfare as the profit incentive stops the experts using their knowledge for good. Finance is a classic example of the uninformed being repeatedly duped into unsound investments decade after decade. Benjamin Graham describes how in his first job selling Bonds to grannies he came to realise that he was being asked to steal the life savings of pensioners via commissions designed to get a sale of junk paper. Which is why he moved elsewhere to a more ethical line of work. But I am sure leaving the biggest most integrated market in the world where lots of foreigners have helpfully learned our language will surely increase our prosperity....Nigel says so.

[Matthew Moore]

There will always be gullible people (/ people constrained by high opportunity cost of information search, as I prefer to think of them)

And there will always be liars looking to take advantage of them. Like 99% of politicians ever.

It's very Marxist to wonder how we might change this basic fact of humanity, when the real solution is clear. Don't set up powerful central institutions that rely on coercion: it attracts liars, rewards them, and makes new liars out of honest people.

[Dipper]

Oh, we Leavers are being lectured again by our Remainer betters on our stupidity.

If the statements of the amount we pay to the EU were lies, how come we owe them €50 billion?

how come no-one ever asks why we have to implement the four freedoms when Germany gets a free pass on the Free market in Services?

the government announced house building plans today, and no-one asks whether a cause of high house prices and a housing shortage is too much immigration?

It's not the lies, it's the questions never asked that stand out.

[Dipper]

@ Keith - "Tories like Jim"

I don't read Jim as a Tory. I read him as someone who was a Labour supporter but now just stares in amazement at a group of people who have become EU Federalist fanatics spouting delusional slogans who can never answer a straight question and refuse to acknowledge the obvious problems of democratic accountability.

How on earth did that happen? How did apparently intelligent people completely lose their critical faculties and join a quasi-religious cult that chants empty slogans and denounces anyone who questions them?

But I'm sure Jim can speak for himself.

[Ralph Musgrave]

Chris missed out the fact that people tend to give others the benefit of the doubt. I.e. if X tells a monster lie, peoples' immediate reaction is: "X is is a bastard". But then on second thoughts they feel ashamed at accusing someone else of being a bastard, and assume it's they themselves that must be wrong.

[Sotto Voce]

There is a bit of a danger here of another comment thread being derailed with Brexit mud-slinging. Chris's post isn't really about the pros and cons of Brexit, it just offers a vivid example of the phenomenon under discussion.

The point Chris makes in the last paragraph is more general and profound. If any and all data/information/evidence/argument is interpreted in partisan fashion and subject to massive confirmation bias so that debates increasingly polarise - or if different sides in debates proffer their own favoured but incompatible versions of the truth - then meaningful dialogue, deliberation and compromise become near impossible. All we get is intolerance, mistrust and greater partisanship. Clearly these are not entirely new issues, but it seems undeniable that there has been a qualitative shift in 'quality' of public debate.

We appear to be witnessing the US political system at great risk of imploding, as enlightenment values are abandoned and key tenets of liberal democratic practice are wilfully rejected. This is the route to chaos.

The questions Chris poses are, to my mind at least, the right ones. The very nature of the problem means that the old/favoured remedies are unlikely to be effective. But what can replace them? Is a violent conflagration the only way of shocking the system out of hyper-partisanship and the rejection of the foundational belief that we live in a shared reality (i.e. for people to 'come to their senses')? Or can we back out of this particular cul-de-sac peacefully? You've got to hope so. But, if so, how?

[e]

Our upper echelon, i.e. our long-standing middle of the road Labour MPs and commentators, have long been successful in fighting off calls for left leaning policy/talk of how things work (because who knows where this will end) under a guise of fighting off racism/ a closed shop mentality; the routes of least resistance 50s – 00s which should alert us to the ability of the English working class to embrace immigration and avoid base philosophies. But it seems not. Seems to me our shared interest beyond race creed colour and gender continues to be deliberately and systematically no-platformed. What I fail to understand, given the rise of UKIP, is why this is not glaringly obvious; because if you're one of the majority who live life as best you might with as much consideration and tolerance as you can muster where does credence go when an ordinary workers tendency to sound 'populist' is marked up to racism no matter known history...

[aragon]

Not again!
Phishing for Phools. The Political Brain...

http://www.nytimes.com/2007/08/26/books/review/Brooks-t.html

"Serious thinkers set to work, and produced a long shelf of books answering this question. Their answers tended to rely on similar themes. First, Democrats lose because they are too intelligent. Their arguments are too complicated for American voters. Second, Democrats lose because they are too tolerant. They refuse to cater to racism and hatred. Finally, Democrats lose because they are not good at the dark art of politics. Republicans, though they are knuckle-dragging simpletons when it comes to policy, are devilishly clever when it comes to electioneering. They have brilliant political consultants like Lee Atwater and Karl Rove, who frame issues so fiendishly, they can fool the American people into voting against their own best interests."

And immigration is about economics. This is Sweden an immigration superpower.

http://www.express.co.uk/news/world/755997/Sweden-Malmo-military-intervention-no-go-zone-crime-surge

"Swedish police last year issued a report where it detailed incidents from more than 55 areas which it branded as “no-go zones” as it detailed brutal attacks on police, sexual assaults, children carrying weapons and general turmoil sweeping across the country."

http://www.independent.co.uk/news/world/europe/most-europeans-want-muslim-ban-immigration-control-middle-east-countries-syria-iran-iraq-poll-a7567301.html

"A ban was supported by 71 per cent of people in Poland, 65 per cent in Austria, 53 per cent in Germany and 51 per cent in Italy.
In the UK, 47 per cent supported a ban.
In no country did more than 32 per cent disagree with a ban."

[aragon]

Phishing for Phools

"It thereby explains a paradox: why, at a time when we are better off than ever before in history, all too many of us are leading lives of quiet desperation."

http://nfs.sparknotes.com/macbeth/page_162.html

"Pour the sweet milk of concord into hell,
Uproar the universal peace, confound
All unity on earth."

Human Nature has not changed.

[Guano]

The truth is complicated.

The truth is challenging.

[Tony Holmes]

Chris, a bit off the point, but if everyone followed your advice and put money in tracker funds and active funds disappeared, what would happen to the stock market ? Instinct tells me it would become extremely volatile, but instinct is a bad guide...

[gastro george]

FFS aragon, that "report" from Sweden is from the Express quoting directly a Swedish fascist.

[reason]

Isn't the key point here prospect theory (I've just finished reading Kahneman). People with no good options gamble.

[reason]

P.S. The no good options bit is a very good reason for opposing first past the post and the limited options consequence.

[aragon]

gasto george

It is not an extreme story, I don't speak Swedish or have any contact with Sweden. I only read the main stream media which includes the Daily Express.

As you would expect most of the media does not report on Sweden, unless it has a British angle.
e.g. Birmingham Boy killed by a hand grenade.
(I don't know how you can spin Hand Grenade)

The report originates with the Swedish Police the situation in Malmo is serious and individual police officers like Peter Springare's Facebook post.

Here is a report from the thelocal.se
http://www.thelocal.se/20170127/malmo-police-chief-help-us

"After a wave of violence in Sweden's third city, police boss Stefan Sintéus has appealed to residents in Malmö: "Help us. Help us to tackle the problems. Cooperate with us.""

[Dipper]

@ gastro george

This isn't the first time facists have made inflammatory comments about muslims. Nick Griffin did this and was prosecuted for inciting racial hatred in 2006. The summary of what he said is some way down this article.

http://www.independent.co.uk/news/uk/crime/tougher-race-laws-likely-after-bnp-pair-cleared-423820.html

Eleven years later we have this http://www.bbc.co.uk/news/uk-england-south-yorkshire-38845332

And that, in a nutshell, is the problem with banning "fake news". You have to be really open, transparent and clear and be absolutely sure you are right, otherwise you end up making heroes of facists and stoking the notion that its all a plot to hide the truth from the people. And that is a really bad outcome.

MPs wrestling with their consciences, loud debates, arguments about the truth ... this is the sound of a properly functioning parliamentary democracy and long may that noise continue.

[Guano]

The first two words of the article: Nick Cohen.

Nick Cohen does make some good points but he himself has a complicated relationship with the truth in some areas. When he isn't talking about congenital liars and congenital believers, he continues to get into a rage about people who opposed the invasion of Iraq. As far as I can see, the invasion of Iraq has been the disaster that some of us feared (because regime change involves putting in place a new regime change, which is very difficult and for which the USA and UK do not have the skills). And, as far as I can see, some of the assumptions made by Nick Cohen in 2002 and 2003 in supporting the invasion (such as the ability of the Iraqi National Congress to create a new regime) were very dubious and their weakness of these assumptions is why the invasion was a failure and has had created an array of other problems.

In his campaign to avoid a post-truth future, Nick Cohen claims that people like him "are on their own" and he explicitly rejects working with the kind of people who opposed the invasion of Iraq. That's a pity, really, because many people appear to have started their opposition to the invasion because the information provided and the logic used appeared to be dodgy. The period from August 2002 to March 2003 prefigured the Trump/Brexit era for post-truth information and arguments. Nick Cohen would be on stronger ground if he admitted that the invasion of Iraq has not necessarily worked to anyone's advantage.

I guess that what is going on in Nick Cohen's mind (and I can only guess) is that he has built up a negative image of the type of person who opposed the invasion of Iraq and he has difficulty getting past that image and come to terms with what those people were saying and what has actually happened in Iraq. Thus in between writing articles about the need for truth, Nick Cohen writes expressions of outrage about opponents of the invasion of Iraq as if they had been found to be wrong.

It seems to be a very extreme example of seeing the messenger and not the message, which is one of the issues with failing to recognise lies.

[gastro george]

@aragon

OK, well I've worked most of my life with Swedes and Norwegians, and have regularly visited Malmo three or four times a year recently, although the last was a bit over a year ago.

So, yes, immigration is an issue, and the Sweden Democrats (fascists) have been rising in the polls. Malmo itself has some problems in the suburbs.

But there are no no-go areas. Armed violence has more traditionally been associated with biker-gang turf-related drug wars - otherwise with the far right (see Breivik in Norway) and then, as your last link discusses, lone serial killers.

Reading anything the Sweden Democrats have to say is the equivalent of believing Wilders in the Netherlands - they are loons.

[Barbara Konstant]

Despairing as it seems, our humanity has not reached the necessary level of awareness needed to function peacefully in our world.

[George Carty]

@aragon

The real basis of social conservatism in the United States (and possibly also in the UK -- check out "Phone Home" on the From Arse to Elbow blog) is the notion of the "inherited obligation family" identified by Doug Muder:

https://ourfuture.org/20081226/fighting-for-our-families

"If my daughter goes to college, and my son decides he's gay and moves to the city, who’s going to look after me when my job finally wrecks my back and I can't work any more? I raised those kids, and they owe me — but those liberals are telling them they're 'free' to 'choose.' Likewise, if my sister leaves her abusive husband, the family's going to have to look after her and their kids. It’s a burden we'll bear, but it's better for everyone in the long run if they can stick to their vows and work it out. If the county opens a shelter and gives her an out, she won’t have the incentive to suck it up and do the right thing by the rest of us."

[Jim]

@Keith: your entire comment is a thinly disguised version of "People are too stupid to make their own decisions, so the 'clever' people (by implication people like me, naturally) had better tell them what they are going to get, and lump it'.

[Dave Hansell]

On the contrary Jim. What you have done here is inverted Keith 's argument - which is that the "clever people" are the ones who exploit people's lack of expertise, knowledge, experience and confidence to pray on them.

In your inverted and bizzarre interpretation the ones who seek to warn them are portrayed as the "exploiters" and by implication the villains of the piece for pointing out the obvious.

Let's take a couple of examples. Anyone who has spent any time observing the world around them will have encountered examples of the basic stupidity of people to varying degrees from time to time in every aspect of life arising from a variety of reasons from inattention and absence of common sense to downright stupidity.

On finance barely a week goes by without some example in the media of people being taken in by some Bernie Madoff type scam, either by an individual or a company. The TV programme 'That's life' was full of examples, as are many of the consumer programmes on Radio Four. No one complains that the existence of regulations, consumer protection legislation, public service advice, citizens advice centres etc are just an example of "clever people" deciding that people are too stupid to make their own decisions and by implication are looking down on everyone else because it is generally recognised that people are fallable and often make decisions which are well below sensible.

Similarly, no one would ever seriously argue the line you have argued when hearing the story encountered by Billy Connelly some years back on his tour of New Zealand where people on a local fishing boat ferrying tourists around the carcass of a whale which had swam into shallow water and the shark feeding frenzy were put at risk by one of their number climbing onto the slippy carcass with a young child in tow to get a better look. There is not a individual on the planet who would not raise their eyebrows and shake their heads at the sheer stupidity of such a decision.

For sure there are many more examples one witnesses daily with less or more potential for dire consequences to both those making the decisions which lead to such consequences and, just as important, others around them - because no one is an island, what we do and the decisions for good or ill which we all make have an impact far beyond ourselves.

The point is that no one bats an eyelid or even considers the line of argument you present here in the vast majority of areas of everyday life when they encounter poor decision making.

Only in one area of life is this considered off limits by certain people amongst us. That area is political choices and voting. Where criticism
of choices on the grounds of poor decision making are met with the kind of populist rhetoric represented by the argument you, amongst others, have employed here.

Even in cases where those who encourage poor political decision making take the micky out of those who have fallen for their political snake oil as in this example:

http://anotherangryvoice.blogspot.co.uk/2017/02/the-daily-mail-are-mocking-their-own.html

there are still people who will take the line that it is not the exploiters who are in the wrong here but those who point to the poor decision making on the spurious grounds that those pointing this out are trying to set themselves up as telling the "stupid people" what they should do.

This line in itself is the sort of argument that one would expect to hear from the Bernie Madoff's, snake oil conmen, spivs and carpetbaggers, political as well as financial, who exploit the poor decision making everyone is prone to from time to time and to varing greater or lesser degrees.

'Don't listen to them over there, they are just trying to set themselves up above you, that they are more intelligent, listen to me/us instead and swallow this snake oil we are trying to sell you.'

Fact is, it is much easier to fool people - because too many are prepared to fool themselves - than to convince them they have been fooled.