Faction as the “the mortal disease” of Democracy

The media, as usual, are missing the point. Like a set of nested Russian dolls, it’s still not clear how far the Russia scandal afflicting the Trump administration will go. But regardless of eventual outcome, it is dominating media and political attention to the exclusion of almost everything else in Washington.

If you’re a Trump supporter, of course the Russia allegations are a witch hunt and an outrage. If you’re a Democrat, they are a courageous attempt to stop the integrity of democracy itself being undermined by hostile foreign powers. But Democrats also saw the Clinton e-mail scandal as a ridiculous witch-hunt. Republicans saw it as a fundamental issue of character and fitness for leadership.

It doesn’t mean scandals shouldn’t be investigated. The real issue is how much attention the media obsession with political scandal drains from other issues. As Walter Russell Mead argues,

For both the Left and the Right, the ever-Trumpers and the never-Trumpers, the scandal is a bright shiny object that distracts. Our national house is on fire, and we are all focused on a particularly challenging level of a hot new video game.

Scandals  are a symptom of factionalism.  The Founding Fathers were acutely aware of its dangers, as Madison explained in The Federalist No. 10 in November 1787.

AMONG the numerous advantages promised by a well-constructed Union, none deserves to be more accurately developed than its tendency to break and control the violence of faction. The friend of popular governments never finds himself so much alarmed for their character and fate, as when he contemplates their propensity to this dangerous vice. … The instability, injustice, and confusion introduced into the public councils, have, in truth, been the mortal diseases under which popular governments have everywhere perished;

There was no way to avoid faction, Madison argued. “Liberty is to faction what air is to fire, an aliment without which it instantly expires.” However, he hoped it would be contained by having a (small-r) “republican” form of government, with decisions delegated to those with fit character (such as himself,) instead of pure democracy, Factionalism would also be diluted by the larger Union.

The trouble is the contemporary Washington scene is a small, tightly-knit interpenetrating network of elites who are notoriously often surprised by the world outside the beltway.

Factionalism isn’t diluted, it’s concentrated inside the Beltway.  Professional politicians and interest groups live and die by factional outrage.  Media coverage tends to turbocharge partisan and factional feelings.

The Madisonian fixes no longer work. And worst of all, instead of factionalism being driven primarily by disputes over income distribution, as Madison believed, they are increasingly a matter of divisive identity and racial groupings.

So we need different checks and balances that dilute factionalism. We need a better error correction loop, based more on recognizing when something is not working. I’ll come back to this.



2017-07-17T13:39:55+00:00 July 17, 2017|Decisions, Politics|

Abstract Principles Lead to Failure

Fixation on universal timeless principles necessarily has a tendency to produce catastrophe, because people become desensitized to exceptions, problems, flaws and change.

Take the current plight of the left in the US, for example, full of outrage against alleged Russian ties to Trump – but out of power. Conor Friedersdorf  recalled Richard Rorty’s 1998 book on what was wrong with the left in the Atlantic the other day: According to Rorty (who himself was a very leftish postmodern philosopher, of course,)

The contemporary academic Left seems to think that the higher your level of abstraction, the more subversive of the established order you can be. The more sweeping and novel your conceptual apparatus, the more radical your critique…

Recent attempts to subvert social institutions by problematizing concepts have produced a few very good books. They have also produced many thousands of books which represent scholastic philosophizing at its worst. The authors of these purportedly “subversive” books honestly believe that they are serving human liberty. But it is almost impossible to clamber back down from their books to a level of abstraction on which one might discuss the merits of a law, a treaty, a candidate, or a political strategy.

This is a style of thinking you can watch for, and it doesn’t just afflict the left.  It also helps explain the excessive faith in markets and deregulation that helped produce the 2008 collapse.

One cure is to ask the question “how would you test that assumption?”, followed by “what are the limits, boundary conditions or exceptions?”  A deeper cure is you need an entirely different mindset.

2017-07-11T14:58:55+00:00 July 11, 2017|Adaptation, Politics|

Democracy works by suppressing hubris

Another election, another huge surprise. Teresa May’s historic electoral catastrophe last week was actually foreshadowed by plunging opinion polls this time, so the pollsters are not to blame for once. But the exit poll on Thursday night still came as a vast shock, as the scale of the collapse of Tory hopes became clear. Andrew Rawnsley of the Guardian blamed overconfidence and hubris for the disaster:

She conducted a campaign that combined vanity with incompetence and had learned nothing from the now myriad examples from around the democratic world of what happens when a politician behaves as if they are simply entitled to power.

There is something strangely magnificent in this episode beneath the shrieks and journalistic drama and personalities. Democracy is a messy, awkward, short-sighted system of governance. But it has a better error control loop than autocracy or bureaucratic planning.  Democracy is impatient with failure, as I noted before,  and fixes mistakes relatively quickly.  It may be terrible at long-term thinking and elegance, but it is good at throwing overconfident and arrogant planners out.

That is actually a good thing, and it means people are wrong to see all the turmoil of the last two years only as a departure from some idealized global liberal ideal, as a car crash on the way to utopia. The system is messily rebalancing in response to problems that had been ignored. Overconfident elites get punished, and underserved groups get an (occasional )voice.  The process not ideological. It happened to Progressives in the US last November. It just happened to Conservatives in the UK.   If would be worse if the system got stuck – and that may be the case in continental Europe.




2017-06-13T08:06:49+00:00 June 13, 2017|Europe, Politics|

A Thousand Years since the election (or so it feels)

So this is what warp drive must feel like. Doesn’t it seem as if we’ve had enough drama and high-pitched emotion since the election to have punched a hole in normal reality?  Emotions have been running very high things are getting a little distorted in this stretch of the universe. People I know on both sides are saying shocking things, more extreme than I would have ever imagined them saying.


Time to calm things down. One of the danger signs of trouble is when politics starts to become too moralized, a kind of substitute for religion. Public debate should not be a war raged over ultimate right and wrong.  That didn’t work out too well in the Wars of Religion in 17th century Europe, or the clash of ideologies in the 20th century. Indeed, a desire to calm such disputes is the reason we have supposedly secular (“post-Westphalian”) nation states  and freedom of religion in the West today. It’s not because of deep respect for faith. Instead, it turned out insisting on one correct belief had the unfortunate tendency to produce millions of corpses.  People unfortunately have an inherent tendency to get pig-headed and extreme (and hypocritical)  if they think they are guardians of all that is right and true.


Instead, a better question is: does a policy work?  Instead of saving the souls of the poor, does it at least feed them or educate them? If a plan doesn’t work, why not? If it works, are we becoming complacent?


In the same way, if you’re unhappy with Trump, what could Obama or Clinton have done differently? Why has the Davos order become so unpopular with many groups? If you’re happy with Trump, where’s he most likely to mess up?


That might be less emotionally satisfying than talking about noble principles. But it also means more attention to potential opportunities or practical problems you can fix. Success is not usually a matter of pushing harder for ultimate truth and light, or final victory for one side or the other. Instead, people fail to notice things, or wish them away. They have blind spots.  If Clinton had talked a little less about “who we are” in a general way but visited Wisconsin more often, things might be different. So why did she and almost all her experts and poillsters and big-data modelers fail to see that? Solve that one and it will probably help the Democrats more than any number of protests.


More ability to notice unwelcome things is usually more important in making things work than being righteous. It’s usually complacency and hubris that trip people up, rather than having the correct universal moral rule or ideal policy or narrative.


If you’re upset about Trump, that means you need less comforting validation of what a fine and superior person you are, how dumb and terrible the other side is, and more ways to figure out what your side did wrong, and how to fix it. That’s not easy. Trump opponents think he is pure id, dark malevolent instinct (and maybe they are right!)


No doubt Trump will be just as blind, if not more so. He will blunder into problems he doesn’t see coming, and fail to listen to people with a different perspective.  For Trump supporters, mad at the liberal media (and maybe they are right!) how do you actually restore trust in institutions instead of breaking them down? How do make change more permanent, instead of following the media cycle?


Above all, getting policy right usually does not mean bull-headed persistence and triumph of the will. It  means being able to see things from different viewpoints, so you can find blindspots or oversights or a need to adjust to circumstances instead of confirmation you are so marvelous and right. And that is more difficult than just about anything, as the extreme emotional pitch right now shows.
2017-05-11T17:32:34+00:00 February 8, 2017|Confirmation bias, Current Events, Politics|

US election shock: You’ll forget the models were wrong within a few weeks.

If there's one thing I've consistently argued on this blog, it's that predictions are usually a waste of time and money. Instead, test your assumptions. Don't just “make assumptions explicit.” Look for how you might be wrong, because then you can do something about it.

So how did that play out, the morning after the US Presidential election? Leave aside your horror or elation. This isn't a partisan point. No matter what your politics or feelings about the result, there's a pattern of bad decisions and misjudgment here. And everyone will also forget that pattern within weeks.


With hours to go before Americans vote, Democrat Hillary Clinton has about a 90 percent chance of defeating Republican Donald Trump in the race for the White House, according to the final Reuters/Ipsos States of the Nation project.

The Huffington Post put Clinton's chances at 98%. (98%!)

The HuffPost presidential forecast model gives Democrat Hillary Clinton a 98.2 percent chance of winning the presidency. Republican Donald Trump has essentially no path to an Electoral College victory.

Huffpo also rather sneeringly attacked Nate Silver's 538 for estimating Clinton's chances at a mere 65%.

While I love following the prediction markets for this year’s election, the most popular and widely quoted website out there, fivethirtyeight.com, has something tragically wrong with its presidential prediction model. With the same information, 538 is currently predicting a 65 percent chance of a Clinton victory

As for The NY Times, their final prediction was

“Hillary Clinton has an 85% chance to win”

It's easy to criticize in hindsight. But why do people keep doing this? Why do naive people keep believing this kind of faux-technocratic nonsense? It just leads people to damaging self-delusion, not just in politics but in business and markets.

Elaborate models and data are no defense against wishful thinking. “Big data” does not protect you against many kinds of error. Monte Carlo simulations can be foolish. How could people possibly put a 98% chance on an election that was close to the margin of error in the polls, especially after the lessons of the shock results of Brexit, the Greek referendum and many others?

But they did. Financial markets were bamboozled, for example. Again.

Reuters: Wall Street Elite stunned by Trump triumph.

We need a better way to do this. Instead of models, you need an antimodel, which is what I am developing.

2017-05-11T17:32:35+00:00 November 9, 2016|Assumptions, Confirmation bias, Forecasting, Politics|

What happens when you have principles

How do we make sense of a week that rocked American public life to the core?

It’s been another appalling, disastrous few days for the GOP establishment in particular. It now appears Ted Cruz is the only contender with even the faintest hope of catching Trump in delegate counts. But Cruz is even more unacceptable to the party leaders than Trump, because is so hostile to current institutions and power structures.  Rubio has performed poorly in the latest round of states and is still in danger of losing Florida. As a result, the Republican party is in “meltdown”, “chaos”, “collapsing.” The Bush wing of the party has been utterly routed. How could this happen?

If you look at explanations by insiders, like Romney’s speech, you just can’t help noticing the overwhelming shock and disbelief that someone who doesn’t espouse conservative principles is doing so well out in the country among supposedly conservative voters.

And there lies a major blindspot. As I’ve often argued, it’s  assumptions and ways of thinking that get people into trouble fastest, rather than particular facts. They never even notice facts that don’t fit their view of the world.

One of the most important patterns is just this: whether people primarily think in terms of abstract principles. This often tends to go with extra education and jobs which require justification of actions or abstract thinking about rules, such as journalism or law or some kinds of politics. And academia is in many ways all about abstract principles.

So notice that the GOP establishment usually tend to define their position in terms of principles or abstract ideals such as limited government, strict adherence to the constitution, free trade, and usually a tendency to foreign intervention in the service of principles like democracy.

Set aside for a moment what you think of individual policies, whether they are right or wrong, and look at the pattern of thinking here, what people consider correct or appropriate or relevant. Some people find this impossible to do, in isolation from a sense of moral outrage or indignation.

That, however, is a sign it is not just a matter of politics. It’s a matter of ethics as well,  which is why so many people come to feel so strongly about it. It’s how you define the good, and the right, and the true, and for many the cause or purpose in life. No wonder people get intense about the issues.

Morality on the established view is a matter of universal principles and objective impartiality.

It’s a pattern that dates back centuries. Kant, for example, summed up morality as “Always act on the maxim that you can, at the same time, will that it be a universal law.” In other words, anything you do should be justifiable in all times and places and contexts. (You notice that this itself is a principle?)

So consider: this necessarily means that your own self-interest or inclinations cannot be in any way a basis for morality. Instead, you are moral insofar as you are impartial or unbiased between groups, and set up things so that they function according to impersonal rules. You tend to see individuals as rational autonomous agents, instead of people from a particular nation or culture, or time, or place, or background.

This view has a lot to be said for it. It is the reason, for example, we don’t see CEOs of large corporations exclusively hiring their cousins or brothers-in-law for top jobs. It is the basis for bureaucracy, in Weber’s sense; large organizations can’t run without following abstract rules and policies and procedures. Modern life depends in large part on restricting clans or extended families or parochial interests. So this way of thinking comes naturally to managers of large corporations or civil service administrators. The finest thing you can be is objective and impartial and unbiased.

WEIRD principles

Are you nodding your head? It is a view which is often felt to be so common as to be unquestionable. But it is actually comparatively rare. In the world as a whole, probably only 5% or less of people think this way.   Even in most developed countries, less than 20-30% of people think of morality or decisions in this way. As Jonathan Haidt put it in The Righteous Mind, such people (like you) are WEIRD, standing for  Western, educated, industrialized, rich, and democratic. Researchers..

 reviewed dozens of studies showing that WEIRD people are statistical outliers; they are the least typical, least representative people you could study if you want to make generalizations about human nature. Even within the West, Americans are more extreme outliers than Europeans, and within the United States, the educated upper middle class (like my Penn sample) is the most unusual of all.

Instead, most people typically believe morality is a matter of religious revelation, or custom, or tradition handed down through the centuries. Or a matter of honor and reputation. Or most of all, rules that bind together a particular group or community and promote its survival.  Group solidarity – loyalty, self-sacrifice, respect for community elders, observing group norms – count for far more than universal principles. The essence of morality is something like loyalty, pulling your weight for the group.

An Inevitable Flashpoint

Where is this difference between ways of thinking most likely to show up and turn into major clashes and mutual incomprehension? Well, take a look at the issues where Trump established himself and rocketed to the top of the field, immigration and torture of terrorists.

If you think in terms of principles, restrictions on immigration, or building a wall, are almost a perfect example of lack of impartiality, of violation of universal principles, of the need to treat everyone in an equal, non-discriminatory, unbiased way.  The essence of morality is to be impartial in these cases, and not favor the interests of a particular group like  current inhabitants. (You can see Merkel’s policy on refugees in the same light. )

But if you think of morality in terms of care and loyalty and support for your own community or group, or at least a morality that  is embedded in a particular set of  customs or traditions, it is the perfect example of near-traitorous disloyalty and lack of ethics, of foolish adherence to vacuous abstraction, or a mere cover for the self-interest and malicious intentions of billionaires, or big business.

Again, before you rush to be shocked at one view or the other, stay calm, step back and recognize that they exist, and they help explain not just the lack of communication but the sense of anger and  emotional energy right now. Immigration is almost bound to be a flash point between views.

And torture? It’s obviously a violation of universal principle, one of the worst that can be imagined. How could anyone support infliction of pain as a universal idea? But in the other view, it’s more a matter of reciprocity. It may be undesirable, but in a specific context exceptions can be made if it is for the defense of the group and merely responds to unfair actions by the other side, such as acts of terrorism. Treating people in a universal, unbiased way, on principle, simply isn’t important. (Cue gasps from the universal side.)

So the two sides are talking past each other, and simply don’t understand each other. Unfortunately, it’s likely that as a matter of voter arithmetic that universal rectitude may often come a distant second to voter self-interest. But the way of thinking among the elites define this as the very essence of lack of morality.

Incidentally, as the GOP prepares to tear itself apart over the definition of ” conservative”, the establishment view is more or less than the same as classic 19th-century liberalism.

And on the Democratic side? The Democratic party is mostly a coalition of groups who do act in terms of group solidarity – ethnic loyalty, or labor interests, or the interests of sexual orientation groups, plus rich, educated progressives who also define their view in terms of principles, with slightly  different emphasis: equality, welfare, government action to pursue rational principles, a different kind of liberalism.

There is a third kind of fundamental view as well, although it more often gets forgotten or ignored, and can reconcile or ameliorate some of these clashes. That is to see morality or decisions as a matter of balances, a golden mean.  But that’s a story for another time.

How people think counts.

2017-05-11T17:32:40+00:00 March 6, 2016|Assumptions, Communication, Politics|

“Everyone was Wrong”

From the New Yorker to FiveThirtyEight, outlets across the spectrum failed to grasp the Trump phenomenon.” – Politico


It’s the morning after Super Tuesday, when Trump “overwhelmed his GOP rivals“.

The most comprehensive losers (after Rubio) were media pundits and columnists, with their decades of experience and supposed ability to spot trends developing. And political reporters, with their primary sources and conversations with campaigns in late night bars. And statisticians with models predicting politics. And anyone in business or markets or diplomacy or politics who was naive enough to believe confident predictions from any of  the experts.

Politico notes how the journalistic eminences at the New Yorker and the Atlantic got it wrong over the last year.

But so did the quantitative people.

Those two mandarins weren’t alone in dismissing Trump’s chances. Washington Post blogger Chris Cillizza wrote in July that “Donald Trump is not going to be the Republican presidential nominee in 2016.” And numbers guru Nate Silver told readers as recently as November to “stop freaking out” about Trump’s poll numbers.

Of course it’s all too easy to spot mistaken predictions after the fact. But the same pattern has been arising after just about every big event in recent years. People make overconfident predictions, based on expertise, or primary sources, or big data, and often wishful thinking about what they want to see happen. They project an insidery air of secret confidences or confessions from the campaigns. Or disinterested quantitative rigor.

Then  they mostly go horribly wrong. Maybe one or two through sheer luck get it right – and then get it even more wrong the next time. Predictions may work temporarily so long as nothing unexpected happens or nothing changes in any substantive way. But that means the forecasts turn out to be worthless just when you need them most.

The point? You remember the old quote (allegedly from Einstein) defining insanity: repeating the same thing over and over and expecting a different result.

Markets and business and political systems are too complex to predict. That means a different strategy is needed. But instead  there are immense pressures to keep doing the same things which don’t work in media, and markets, and business. Over and over and over again.

So recognize and understand the pressures. And get around them. Use them to your advantage. Don’t be naive.


2017-05-11T17:32:40+00:00 March 2, 2016|Adaptation, Expertise, Forecasting, Politics, Quants and Models|

There is a deeper pattern in why the GOP Establishment is in trouble

“What went wrong?” is the underlying question in David Frum’s much-talked about piece in the Atlantic on the “Republican Revolt”.  How could an establishment candidate like Jeb Bush, who was expected to be almost irresistible and has raised more than $100 million now be running at 3-4% in the polls? How can the GOP primary race have been hijacked by a reality TV star at the expense of experienced Governors and Senators?

Let’s leave aside the betting on who will finally get the nomination, or how good or bad Trump is, as  most of the media focuses on little else and most journalistic speculation is essentially useless. To be sure, despite his consistent lead, the Donald may not be inevitable as the field thins out and the ‘ground game’ of turnout becomes important.

It’s just that as of now, some of the most powerful, elite  and supposedly expert people in US politics look like losers. This is really not where they want to be.

So let’s coolly step back and  look at the pattern. How could the establishment miscalculate so badly?  What does this tell us about why decisions go wrong? Could other elites have the same problem?

In a nutshell, people refused to see contrary evidence.

Many establishment policies were not popular with the GOP base, Frum says. Less than 17% favored cuts in social security, for example.  Most wanted more deportations of illegal immigrants, the exact opposite of a pathway to citizenship.

As a class, big Republican donors could not see any of this, or would not. So neither did the politicians who depend upon them. Against all evidence, both groups interpreted the Tea Party as a mass movement in favor of the agenda of the Wall Street Journal editorial page. One of the more dangerous pleasures of great wealth is that you never have to hear anyone tell you that you are completely wrong.

They could not see things that did not fit in their frame. They could not learn from errors or defeats. The establishment had been shocked at Romney’s loss in 2012, for example.

And yet, within hours of Romney’s defeat, Republican donors, talkers, and officials converged on the maximally self-exculpating explanation.

That meant Republican leaders decided the problem was Romney’s talk about more immigration enforcement alienating Latinos, the very issue where the establishment differed most with their base and where hard evidence of votes to be gained in the center was (Frum says)  mostly lacking.

Otherwise, the party yielded on nothing and doubled down on everything. No U-turns. No compromises.

Instead of adjusting to minimize or forestall the chance of a revolt, or finding a smart alternative way forward, the leadership  interpreted things in self-serving terms and escalated.

This, of course, is a problem that is extremely widespread and not confined to the GOP. We saw exactly the same thing on all sides in the last midterm elections.

Perhaps the establishment will be able to adapt now that their problem is (you would think) undeniable and it is darkest before dawn for them. Or they can double down again. But serious damage has been done, and some ground rules of US politics – like the importance of raising money – have been rewritten.

Here’s the takeaway. Once again we see in this example that the fundamental problem with decisions is not really bias, or lack of formal rigor, or failure to gather data. It’s that people most often  don’t change their mind in response to evidence. Or  they fail to adapt until so late in the game that all the choices are bad. That’s what we need to fix, and would save countless billions of dollars and tens of thousands of companies and careers.

The most brilliant investors intuitively realize this. But as this incident demonstrates, most leaders and managers and policymakers do not. They are surrounded by yes-men. They stick with the familiar. They are clever enough to explain away facts which do not fit their narrative.

People get stuck, and persist too long in self-delusion. They fail to adapt and move when they still have the chance. If you can mitigate that, you can do more than most crystal balls could ever do. After all, if the only thing you see in a crystal ball is your own wishful thinking, what good is it?


2017-05-11T17:32:40+00:00 December 27, 2015|Confirmation bias, Current Events, Decisions, Politics|

“And no one saw it coming.” Again. And again.

Peggy Noonan, writing today about the state of US GOP primary race:

But really, what a year. Nobody, not the most sophisticated expert watching politics up close all his life, knew or knows what’s going to happen. Does it go to the convention? Do Mr. Trump’s roarers turn out? Does he change history?

And no one saw it coming.

But the press and tv  and political and economic research firms will drown you in speculation and commentary and confident predictions. That’s yet another reason to distrust them, as I keep arguing. Instead, look for leverage, and resilience.  Don’t get locked into a convenient narrative. It’s what you can do to change your own thinking and position that counts.

2015-12-18T12:38:11+00:00 December 18, 2015|Assumptions, Expertise, Forecasting, Politics|

“Nearly everything that was expected to happen in the 2016 presidential race hasn’t”

Another data point on the value of political and economic predictions: Fred Barnes in the Weekly Standard.

Nearly everything that was expected to happen in the 2016 presidential race hasn’t, and many things that weren’t expected have. The rise of Donald Trump—even that he would run—was not predicted. Nor was the fall of Scott Walker or the weakness of Jeb Bush’s candidacy. Polls have proved to be unreliable indicators of where the Republican and Democratic campaigns are headed. Hillary Clinton’s coronation as Democratic nominee, we were told, was a sure thing. Now she’s sliding toward underdog status.


2017-05-11T17:32:41+00:00 September 30, 2015|Forecasting, Politics|