A study of the effects of nasty comments on reader perception

Barry Ritholtz (one of my favorite bloggers) reporting about a study of the effects nasty comments have on reader perception:

Uncivil comments not only polarized readers, but they often changed a participant’s interpretation of the news story itself. In the civil group, those who initially did or did not support the technology — whom we identified with preliminary survey questions — continued to feel the same way after reading the comments.

Those exposed to rude comments, however, ended up with a much more polarized understanding of the risks connected with the technology.

Simply including an ad hominem attack in a reader comment was enough to make study participants think the downside of the reported technology was greater than they’d previously thought.

He’s talking about blog comments, but one can imagine similar results would be found studying nasty comments and reviews in the App Store. Or even non-nasty, but irrelevant comments. I often see products given poor reviews for reasons like the following:

  • The reviewer thinks the product is too expensive. (You shouldn’t rate a product based on whether you can afford it; that’s completely subjective. That’s like giving a Porsche one-star, because you’d prefer it cost $10,000)

  • The product doesn’t have a feature the reviewer thinks would make it better. (You should rate a product on what it advertises itself to do; not on what you wish it did.)

  • The reviewer had a bad experience through some mis-use of the product. (You can’t blame the product, if you tried to use it for something for which it wasn’t intended.)

Why good intentions can fail as a starting point for organizing society

In discussions about society and economics, proponents of collectivism often respond to free-market capitalists with incredulity. How could you possibly put profit above the needs of human beings?

That is a tragic misunderstanding. And in a domain so important but so closely tied to emotion, it often derails constructive conversation and progress.

The sad truth is that putting the needs of others first, ultimately fails as a societal model. Intentions don’t matter; what actually works — or more precisely, what produces the best results among imperfect alternatives — is what matters.

As it happens, organizing society around the innate human tendency to act in ones own best interest will achieve, through the invisible hand of the impersonal price system, the best sustainable results for the poor and needy. Not perfect results; but the best possible results.

Good intentions

It naturally starts as the most noble of ideas. There are those in our society who are in need due to no fault of their own, and we as a society should collectively help them.

How do we collectively help those in need? We don’t tend to do it directly; rather, we attempt to do it indirectly through government. We allow the government to tax a portion of our income, in order to use that money to — in addition to the basic functions of government — help those in need.

But government is comprised of people; human beings. And that’s the fundamental problem.

Who goes to work in government? Government jobs are stable, by and large free from accountability and the pressures of competition. At mid and high levels, government jobs offer power and opportunities for corruption.

I’ve lived in four countries and visited many more, and my experience in this regard is fully consistent. Although there are exceptions, government everywhere, in general, attracts people for whom such job qualities appeal. In general, these are not qualities consistent with achievement in private enterprise, where only the most competent, efficient, productive, competitive and effective entities survive.

The result is no surprise — incompetence, inefficiency and ineffectiveness. For every dollar collected in taxes to help the needy, only a fraction arrives at its intended destination. Furthermore, the situation grows worse with increasing size of government, and government always tends to grow. Over time, less and less of each tax dollar ends up actually achieving the initial aim of society — helping the needy.

Today we see massive inefficiencies, incompetence, and corruption in government, and growth in government spending as a percentage of GDP on a scale in the United States (as in Europe) that is clearly unsustainable. And it extends beyond welfare; just look at the America medical and education systems.

What are the effects on those being helped?

The existence of welfare creates situations in which those with the capability to escape their needful situation choose to remain. And, worse, it creates situations in which those outside actually prefer to enter welfare, rather than to fend for themselves. (Here in Spain, I often speak with unemployed who are in no hurry to find a job, and have seen all manner of ingenuity and innovation in fraudulently accessing government welfare and benefits programs.)

Over time, the proportion of the ever-growing total population eligible for government help who are actually in need, declines.

Milton Friedman was one of history’s most intelligent and respected social and economic thinkers. A life-time of research led him to conclude that although the intentions of a collectivist societal model are good and noble, such a model can’t and doesn’t work in practice in the long run.

A fundamental flaw, therefore, in designing a social model is to begin with good intentions.

Experience should teach us to be most on our guard to protect liberty when the government’s purposes are beneficial. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greater dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.
—Justice Louis Brandeis

What’s the alternative?

The alternative is free-market capitalism. In his ground-breaking work, “The Wealth of Nations”, Scottish economist Adam Smith discovered that the impersonal system of prices in a free market acts as an invisible hand, organizing very complex and distributed systems of efficient production, resulting in a situation in which the individual, acting in his own interest, actually works towards the larger benefits of society; objectives which were of no intent of his own.

According to the research of Milton Friedman, history clearly demonstrates that wherever you find reasonable conditions for the poor, you will find something resembling a free-market society. And wherever you find the worst disparity and conditions for the poor, you will find a model of central societal planning.

It’s a counter-intuitive idea, for sure, and leads to hundreds of reasonable questions and concerns. I would urge anyone interested in this topic to watch Milton Friedman’s “Free to Choose” series, now available on YouTube.

The inefficiency of government subsidized medical care

Phil Greenspun posted an article discussing a study of the efficiency of Medicaid in Oregon.

The conclusion was that Medicaid increased hospital use by about 30 percent, outpatient medical care by about 35 percent, and total spending by 25 percent. Finkelstein noted that advocates for expanding health insurance often predict that use of hospital emergency rooms will decrease when everyone is insured. That turned out not to be true in Oregon. The insured and uninsured used emergency departments at hospitals at roughly the same rate.

My observations here in Spain, a country with a state-subsidized medical system, has been that waits at emergency rooms are excessively long, due to large numbers of people visiting for common colds and other minor problems. It has gotten so bad that the government has begun to impose a minimum (nominal) payment to access the emergency room.

Update: A friend suggested that a desire to see a more efficient system implies less access. That’s untrue. Efficiency is about maximizing productivity, with minimum wasted effort or expense. Greenspun offered some interesting ideas for health care reform a while back.

Obama’s reelection — are we on the path to Spain?

For me, the Obama acceptance speech began ominously:

…the belief that while each of us will pursue our own individual dreams, we are an American family and we rise or fall together as one nation.

It seems that Obama’s dream is a nation of people working hard as individuals, and collectively contributing their fair share towards the provision of a societal safety net, administered by an efficient government.

It’s a beautiful ideal. Who wouldn’t want to live in such a society? There’s just one problem; it simply doesn’t work. Why?

  1. Government attracts those seeking power, operates inefficiently and always becomes corrupt.

  2. The existence of a social safety net lowers the motivation of survival, and usually leads to abuse.

Free to Choose

I wish everyone would take the time to watch Milton Friedman’s series called, Free to Choose. It’s the culmination of the life’s work of one history’s most brilliant economic thinkers.

A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.

Friedman argues convincingly — through both logic and historical evidence — that socialism, while noble in concept, simply doesn’t work.

Taxing removes the incentive to invest. Through incompetence, inefficiency and corruption, only a fraction of tax receipts end up at their intended destination. The presence of a safety net creates unproductive dependency, a sense of entitlement and abuse.

The path of socialism ultimately leads to a society in which an unreasonable portion of its resources are consumed by a growing, inefficient and corrupt government. Its citizens have, by and large, become uncompetitive with those of freer nations, are suffering and have developed a deep sense of entitlement. The productive sector of the society has left, to invest its resources and capital in freer places.

The tragic irony is that this path is governed by a vicious cycle, because it’s so easy for the suffering to place their hopes in the hands of politicians who blame anything and everything except the root organization of the society itself, and promise relief from the government, funded through debt, taxes and redistribution of wealth.

Am I living in the future of the United States?

I live in Spain, a socialist country, and in a sense I feel I’m living the future of the United States.

As you’re probably aware, Spain is in dire straits. In response to an ailing nation, the Spanish government has tried social program after social program — subsidies (money) to those with children, subsidies to young people who want to rent a property, subsidies to those who take jobs far from home, subsidized loans, massive stimulus funds given to local governments, scholarships based on economic status rather than merit, free medical services for everybody including illegal immigrants, laws that protect renters, laws that protect employees.

You name it, and it’s been tried here.

What are the results? Widespread corruption. Widespread fraud and abuse. Massive inefficiencies. An economy hopelessly burdened by its debt. And a society deeply rooted in the culture of entitlement.

In my time here, I have been absolutely astounded at what I’ve seen and have personally experienced as a result of this approach to organizing society.

As a businessman, I’ve experienced the abuse of the Spanish employment protection laws. As the owner of rental property, I’ve experienced the abuse of the Spanish renter protection laws. I was once told,

You’re going to watch me enjoy this apartment’s swimming pool and not paying any rent, while you spend years trying to get me evicted.

In recent news, a nearby local town received 11 million Euros from the central government, as part of a massive stimulus plan. Of those 11 million, 10 million disappeared, and one million went to a mysterious company who was the only bidder on an infrastructure improvement project. Hardly a week goes by without the breaking of another story like this.

Only on the brink of financial collapse under the weight of its debts has the government began to implement austerity measures. And what is the response of the people, who have developed such a deep sense of entitlement? Revolt — against the government who are cutting back entitlements, against businesses and against anyone who’s in a better situation.

Just yesterday I overheard a group of people talking about burning a bank, because it foreclosed on someone who could’t pay their mortgage. It doesn’t matter that it was the bank that provided the possibility for the person to buy a home, and that that person agreed that if they do not repay the bank, they will lose their home. It doesn’t matter that, rather than saving and living frugally during the past generation, the person likely (statistically) lived a life of consumptive excess beyond their means.

And the world view reflected in this example is absolutely typical of a large portion of the Spanish society today.

What about those who could help? Well, more and more, I’m learning of capable Spanish individuals and businesses who are emigrating to other countries, freer countries, to apply their skills and resources.

Over the past few decades, I’ve gotten the sense that America is moving away from its roots as a free society and towards a model of collectivism and ever larger government. Granted, I’m viewing this from afar, but perhaps that also makes it easier to see. Sometimes I feel it’s easier to recognize where America is headed, when you already live in a place that’s just down the road.

Obama’s campaign message wasn’t that we Americans need to bear the painful consequences of a generation of excess, and move in a direction — both individuals and government — of taking more personal responsibility and creating the conditions for freer markets, incentivizing people to take risks and seek opportunities.

Instead, the message was that we’re one big family, we’ll all take care of each other through government mediation, and we’ll pay for it with debt, increased taxation and redistribution of wealth.

As Friedman pointed out, that’s a noble idea, but has never worked. America is worse off today than it was four years ago. I predict it’ll be worse off still four years from now, and over time will continue to look more and more like Spain. I hope I’m wrong.

Is this inevitable? Perhaps it is.

I often wonder why the tendency of nations towards collectivism seem almost inevitable, and I guess it’s because freedom, while a superficially attractive concept, ultimately demands personal responsibility and unavoidable accountability. It’s attractive and easy to delegate the hard parts of freedom to a government willing to make promises, and easy for us to believe that having made that delegation, we still retain the good parts of freedom.

In that respect, the free-market capitalism model which Friedman so eloquently argues is the best known system in the overall interest of a society, is one that appears to be unfortunately unsustainable in the long-run.

Footnote:

I don’t see how any average person, like myself, can claim to know how a society should best be organized. Certainly that’s not what I’m trying do in this article. What I am trying to do is simply articulate the world view I seem to have developed over time, through study, observation and experience.

Moving abroad—proposal for a new Twitter feature

One of the most enriching things I’ve done in my life has been living abroad, experiencing cultures and societies completely different from those in which I was raised. That made me appreciative of things I formerly took for granted, and it exposed me to ways of thinking, living and doing things that otherwise may have never occurred to me.

As regular Twitter users, we’re exposed each day to the stream of tweets from those we’ve chosen to follow. That stream represents a slice of the social universe that’s unique to us. If we imagine each of those voices as a distinct ingredient, the resulting social dish that we consume on a daily basis is one-of-a-kind in the flavors of culture, interests, education and point of view.

It’s probably worth considering that that experience is less diverse and in certain ways potentially more influential that the real-world experience of the societies in which we live. So today I was imagining being able to “move” into the unique social experience of other Twitter users — i.e. being able to see the stream of tweets from another user’s followers — and wondering if it could be as enriching in the unexpected ways that moving abroad was for me.

Would I more likely understand how a person could form an opinion that now seems completely unreasonable to me? Would I come to understand how some of my own viewpoints are limited or distorted by my own unique social exposure, repeated day after day?