Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Economics Motivators of Activism

 

There is apparently quite a bit of divide that has emerged with the recent arrest of an environmental activist Disha Ravi from Bangalore in connection with the Republic Day violence and aftermath. Disha apparently is aged twenty two and thus seemed to find sympathy among the section of the crowd that is egging on her. Her supporters are of course bounded by a common dislike often degenerating into a pathological hatred for Modi, which would make her their celebrity hero irrespective of her age. Age might just be a number. Conceivably, Disha began her activism at age of nineteen and has evolved from an environmental activist into one of anti-establishment activist. There might be an irony she is fighting in favour of those farming interests, singularly responsible for environmental degradation of Punjab and Haryana. Rather than examining the merits or otherwise of the case, it would be instructive to decode her motivations for activism. It begs to be understood why youngsters are attracted by activism.

 

Like any other activity, activism too generates a cost benefit analysis. There must exist a role model for any youngster as he or she plans for their career. In the post titled ‘ Pakistan and the Role Model Dilemma’, this concept has been discussed at length in the context of Pakistanis supporting terrorism. Similarly, another primer on economics too discusses at certain length these motivations in the contex of fashion shows or cricet coaching classes. The same models what was discussed in the context illustrated above applies to activism also. Youngsters seek to emulate Marc Zuckenberg as much as some of them would want to emulate Greta Thernberg. Both in different ways act as role models for youngsters as do cricketing legends or other sportsmen or artists. They seek to trend in a career path akin to these activist celebrities. As noted above, there are costs and benefits. The benefits perhaps involve the publicity, the fame, being at the centre of attraction, able to meet people in the highest circles, moving in fashionable party circuits, fund raisers among other things. The glamour quotient in these days of five star activism are too high for being ignored by the youngsters. This is akin to Bollywood or any other film industry. Like elsewhere, the barriers to entry remain formidable. The number of people succeeding to substantial extent would be few. There would be godfathers or godmothers one too many, tripping of one would perhaps drive down the snake instead of a ladder.  

 

Youngsters have fanciful ideas and ambitions and aspirations and it is just natural that they seek to improve or fashion the world on their terms. The revolutionary movements often originated in the youngsters with some examples including Fidel Castro, Jacob Arbenz or Muhammad Gaddafi. One might or might not be in admiration of them, yet one cannot deny they achieved success and perhaps some downfall at an young age. The heady cocktail of social media and glamour associated with  the same attracts many youngsters to activism. They might be involved in innocuous movements or activities but just a thin line separates these from more sinister activities. Like in other industries, there are recruiters who are keep to tap new talent to run their gravy train going. If a young activist catches the eye of such a recruiter they might find their career path smoother. It is just not the glamour or the connections but a possible scholarship and admission to a prestigious US college and maybe a career in the West would lead them to dabble in it. Perhaps there might be an unwitting entry but over a period of time, many do master the tactics and seek to elevate themselves in the vertical ladder of the activist hierarchy.

 

Like any other industry, activism too is a tournament. There are many who seek to enter the industry. There are perhaps some who are attracted by the incentives on offer. There some who enter because they are convinced they can do something better for the society. The motivation levels at the bottom and the top differ. The bottom is as eager to impress the top. The rewards are plentiful. There would be opportunities to attend conferences all over. There are fund-raisers to rub shoulders with celebrities in the industry and the donors alike. There is an opportunity to leverage the glamour and enhance the fame and be the centre of attraction. Yet to the bosses, the raw talent they hire would be of utility if there were to exist the economies of scope. The economies of scope would mandate the movement across the horizontals in the NGO space even though they might not be directly linked to the field of work. Therefore it would not be a surprise if the environmentalist movement sides with the anti-establishment protests even though the protests might lead to an outcome completely antithetical to the objectives of the environmental movement. The same would hold good for any labour movement intersecting with another movement. Yet, while some may do out of conviction, for many others, it is the incentives that come in to leverage their upward mobility that drives them. To their handlers at their top, this might be a risk mitigating strategy. The raw talent usually young is bubbling with aspirations and energy and eager to make a mark without minding to cut the corners so as to speak. The top line in the hierarchy would seek to avoid risk for themselves, while the young would seek to embrace risk since it gives them an opportunity to impress the who’s who of the industry and thus prospective growth. In instances, wherein there would be friendly governments, they would perhaps succeed and making a mark in the domain. Yet there are risks and costs to pay if caught. The cost-benefit analysis is not something different that one would witness let us say in a drug gang something described by Stephen Levitt.

 

Therefore, contrary to the popular perception, it is not the conviction and idealism that drives them into the industry. on the other hand, it is the incentives on offer that make them embrace the risks of going against the establishment. What the idealism does is given the age, it creates the extra motivator for taking those risks. This is why the activists would prefer to hire young recruits. These are the ones who can be the poster kids for the movement, attract new talent along the way, and mobilize the support while taking the risks for themselves. Activism thus runs on the principle- people respond to incentives and not any others. The rest is merely commentary.

 

 

 

 

Comments

Popular posts from this blog

Decision Making as Output and Bounded Rationality

The Economics Origins of BCG Matrix

People and the Third Wave of Chinese Virus