When reputation misleads

Rebecca Long Bailey inadvertently posed a good question yesterday, when she tweeted:

Rishi Sunak the new Chancellor is a former Goldman Sachs banker who has backed anti trade union regulations; tax cuts for big business; opposing tax avoidance clampdown; cutting tax for wealthiest. The mask is slipping already, this isn’t a different kind of Tory government.

This raises the same question that is being begged by the Labour leadership contest: to what extent does a person’s past behaviour and beliefs predict their future behaviour?

We have countless examples of it not doing so. All of you will have worked with somebody who arrived at your firm with a glittering CV but who turned out to be a dunderhead, and conversely with somebody of no great reputation who turned out to be excellent. Indeed, this is pretty much the history of top-flight football managers.

Similarly, in politics, people have defied their reputations. Martin McGuinness had a history of terrorism, but he became essential to the peace process. The racist Lyndon Johnson did more for civil rights than JFK who had a liberal reputation. Theresa May arrived at Number 10 carrying hopes she would fight “burning injustices”, just as Gordon Brown did to hopes he would be a Viking warrior, whilst Thatcher was initially an under-estimated housewife. Francois Mitterrand became president amid socialist hopes, but was soon forced to make the austerity turn. And few people in 1997 predicted that Blair would become a reckless military adventurer.

And this is not to mention the many “future Prime Ministers” who shrank into obscurity - who today remembers John Moore? – or the ministers hoping to make reforms only to “go native” under pressure from the Sir Humphrys.

So, why might a man’s past be an unreliable guide to his future?

Sometimes, it’s because he can use his reputation to do things that others can’t. McGuinness’s links to the IRA allowed him to persuade men to put down their arms, just as Richard Nixon’s reputation as a cold warrior gave him the political capital to seek détente with Russia and China.

A second reason lies in William Goldman’s eternal truth: nobody knows anything. What we know of somebody – especially if only by CV or reputation – is only a partial guide to the reality and their future. As investors in Woodford’s equity income fund know, even a good long track record is an imperfect indicator of the future.

Thirdly, and perhaps most importantly, we all face constraints and incentives that break the link between character and future conduct. As Marx said:

Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past. 

But this is not an insight confined to Marxists. Quite the opposite. Warren Buffett made the same point when he said:

When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains.

And Charles Prince, former CEO of Citi, said the same thing when he famously said: “as long as the music is playing, you’ve got to get up and dance.” If incentives are strong enough, one’s past choices don’t predict one’s future ones.

Herein lies the reason why Ms Long Bailey might be wrong. Even if Mr Sunak is a head-banging inegalitarian, incentives and social structures constrain how far he can implement his desires. Acting upon his past beliefs is no way to retain the support of people who have only “lent” their votes to the Tories.

Now, I don’t say this with great certainty: I prefer to leave futurology to people who are paid enough to compensate them for making fools of themselves. I do so, however to flag up a danger for Labour – that they might be mischaracterising the Tories by painting them as simple-minded Thatcherites.

Indeed, Ms Long Bailey might be making a very anti-Marxist error – a version of the fundamental attribution error, of attributing too much to character and underplaying the importance of social structure.

Comments

[Robert Eastwood]

LBJ a racist? Robert Caro's biography does not support this view. Caro explains that LBJ allowed racist southern senators to think that he was 'one of them', as part of his long game to gain power. As Caro says, 'power reveals', and in LBJ's case the result was his Civil Rights legislation.

[Boyo]

Once upon a time, the elite life trajectory was public school, Oxbridge, Guards regiment, high office. Now it’s so frequently public school, Oxbridge and an American MBA, Goldman Sachs or McKinsey, public office.

I’ve worked a little with the latter type and am mostly amazed by how fast they speak* and how dense the jargon. It took me a while to work out that this seemed to be a tribal signifier. In the same way former Guardsmen signaled with regimental belts, this sort of copper bracelet and a clipped way of talking, the new finance elite talk a language where I sort of understand the individual words (it’s English) but I rarely understand an entire sentence, for example “what vertical are you in?”, “what’s your price point?”. And the women in particular often have a sort of croak.

The other noticeable aspect of this new elite is that they - men and women - seem to be all very good-looking, as is Sunak. I can’t work out if this is because they have the disposable income to invest in a “look”, or Goldman and McKinsey which select a very certain type of Oxbridge graduate - not the chinless wonders who joined the Guards.

*The fast talking thing is totally bonkers!

[georgesdelatour]

Good article.

Mikhail Gorbachev served loyally in the Soviet Politburo under Brezhnev, Andropov and Chernenko; as soon as he got the top job he began a 180º course change, ultimately dismantling the entire system. F.W. de Klerk served loyally in the apartheid cabinets of South African governments for 11 years, notably under P.W. Botha; as soon as he got power he quickly moved to end apartheid.

There are two factors to bear in mind. First, any smart individual entering politics in the USSR / RSA of the 1970s knew they had to work through the Communist Party / National Party if they wanted to wield power. So it’s no surprise Gorbachev and de Klerk chose the allegiances they did, whatever their beliefs. Second, the existing system was probably doomed in both cases; and the imminence and scale of that doom may have felt far more apparent to insiders at the heart of government than it did to pundits on the outside.

(At the same time, there were contingencies. The Soviets suffered a humiliating defeat in Afghanistan, the Saudis were pumping out cheap oil specifically to lower the export value of their oil, and Reagan was challenging them with the Star Wars program. Without these contingencies the USSR might have lasted longer. If it had magically managed to pull off Chinese-style Perestroika without Glasnost but with East-West Detente, it might still be around today. The collapse of Soviet Communism was, in turn, a contingency in South Africa. Fear of Soviet-sponsored Communism was a real inhibitory consideration for reformers under apartheid, so its collapse helped them.)

[georgesdelatour]

Someone famous once said that it’s much easier to create a perception than to change a perception. Once journalists and the public already have a narrative up and running about a politician, they tend to disregard evidence of contradictory behaviour. Early in her premiership Margaret Thatcher acquired her tough image as the “Iron Lady”. But in her later years, she was sometimes indecisive and drifting, which contradicted her image. Still, for the most part, narrative continuity prevailed over reality.

Her successor, John Major, quickly acquired the image of a dull, grey nonentity, whose politics were essentially Butskellism on tranquillisers. In fact Major was far more pugnaciously combative than late-stage Thatcher had been. He fought and defeated his opponents in the Party as she’d been unwilling to do. I suspect that, if anyone other than Major had been PM (including Heseltine or Kinnock), the UK Parliament would not have ratified the Maastricht Treaty. But none of this fits with Major’s soporific image, so we don’t process it.

The dominant narrative about Boris Johnson is that he’s only interested in power for its own sake. The light version is that he’s like Zaphod Beeblebrox, more interested in the fun and palaver of being Galactic Emperor than in using the office to actually do anything. The dark version is articulated by Peter Hitchens, who recently claimed that Johnson would happily guillotine Queen Elizabeth in Trafalgar Square if he thought it would help him cling on to power. I suspect neither is really accurate.

[Boyo]

@georgesdelatour: I’m not sure your account of FW de Klerk is entirely accurate. PW Botha had started negotiations with Nelson Mandela as early as 1985. Your point about the collapse of communism is maybe more accurate: the South African security infrastructure knew the writing was on the wall for the apartheid state, but was obsessed with negotiating from a position of strength rather than negotiating as eventual losers of a Russian-backed civil war. So the collapse of the Soviet state indeed enhanced the bargaining position and willingness to end their grasp on power.

[Robert Mitchell]

I'm reminded of Plato's Euthydemus, in which Socrates tries to catch out two sophists by bringing up contradictions between what they said in the past and what they say now. The sophists basically say "that was the, this is now." At the end of the dialog, the sophists carry the popular vote:

"Then, my dear Crito, there was universal applause of the speakers and their words, and what with laughing and clapping of hands and rejoicings the two men were quite overpowered; for hitherto their partisans only had cheered at each successive hit, but now the whole company shouted with delight until the columns of the Lyceum returned the sound, seeming to sympathize in their joy. To such a pitch was I affected myself, that I made a speech, in which I acknowledged that I had never seen the like of their wisdom [...]"

This dialog applies to Judy Shelton's recent Fed Governor confirmation hearing, in which Democrats tried to tie her to past statements that she disavows now. We'll see who wins the popular vote ...

[Robert Mitchell]

The passage in the Euthydemus I was thinking of:

"And are you such an old fool, Socrates, rejoined Dionysodorus, that you bring up now what I said at first-and if I had said anything last year, I suppose that you would bring that up too-but are non-plussed at the words which I have just uttered?"

Socrates says eventually: "You must mean that I cannot refute your argument. Tell me if the words have any other sense."

Dionysodorus: Are the things which have sense alive or lifeless?

Socrates: They are alive.

Dionysodorus: And do you know of any word which is alive?

Socrates: I cannot say that I do.

Dionysodorus: Then why did you ask me what sense my words had?

Socrates: Why, because I was stupid and made a mistake.

Conclusion: Trump can contradict himself because words aren't alive; what you said then has no living connection with what you say now. Socrates loses the popular vote on this key point ...

http://classics.mit.edu/Plato/euthydemus.1b.txt

[georgesdelatour]

@Boyo

Fair enough. I was probably trying to force the Gorbachev / De Klerk analogy too hard.

Even in the Soviet case, Andropov apparently wanted to start reforms even before Gorbachev, but was simply too old and frail by the time his moment arrived.

Andropov is an interesting example from the point of view of Chris’s article. He was the main mover of two vile policies: crushing the Prague Spring, and putting Soviet dissidents in psychiatric hospitals. But later he seemed to change. He was highly sceptical of the invasion of Afghanistan (though he went along with it), and he persuaded Brezhnev not to invade Poland in 1981. I suspect he was at best a Deng Xiaoping type reformer (yes to Perestroika, no to Glasnost), not a Gorbachev.

[Zhou Fang]

Well, RLB's position is kinda fundamental to Corbynism. The notion that the country needs some palpably decent, nice person in charge, instead of all those disagreeable bad compromised people who need to be gotten rid of.

[jim2]

I am afraid that reputation or not the Labour party has got the wrong end of the stick, no-one wants socialism, they want selfishness. Selfishness sells. Here down South the MPs do nothing and drag feet on roads and housing, in return they get majorities of 15,000+. The Boris project is to take good old selfishness up North and blow Labour away.

The only time a socialist Labour party or the Lib Dems will get a look-in is when the Tories screw up badly and then it will simply be a 'choose different' moment.

[Dipper]

@ jim2.

I deserve justice. You want fairness. He is selfish.