Arnold Kling

Poverty and Social Pressure

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Jane Galt writes,

Most of us reading this blog, after all, went to college and/or got nice steady jobs because we had enormous social and familial pressure on us to do so. How many of us were strong enough to overcome our environment, drop out of high school, and sell drugs?

I jest, of course, but not totally. The fact that every inner-city kid isn't a Horatio Alger story doesn't mean that inner city kids couldn't be, if their environment were more like the one I grew up in.

Roland G. Fryer, Jr. has written a great deal about social pressure not to succeed in the African-American community. He has a paper on what he calls Cultural Capital. Imagine someone from a Spanish province trying to choose between learning global skills and preserving his cultural identity.

Investments in computer programming are valued in the global labor market, whereas, Catalan is only valued in the small local community. Agents observe each otherï¿½s investment portfolio, and can calculate the conditional probability of any agent being in the community in the future. Investments in Catalan yield a relatively high probability of being in the community in the future, since it is not valued elsewhere, and investments in computer programming yield a relatively low probability.

The idea is that if the person values his acceptance by the community, he may forego investment in human capital. I think that in constructing his paper Fryer goes overboard trying to get acceptance from the mathematical community in the economics profession, but I guess that is the community that holds the keys to tenure.

Thanks to Alex Tabarrok for the pointer to Fryer.

For Discussion. Can otherwise irrational behavior be explained well by social pressure, or is that a desperate hypothesis?

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CATEGORIES: Income Distribution

COMMENTS (15 to date)
shamus writes:

Can otherwise irrational behavior be explained well by social pressure?

What else could account for suicide bombers?

Sam writes:

Quite a good point... I remember reading about the story of one suicide bomber, a woman, who had been forced into it by her husband and lover a solution to the "honor" lost when it was discovered she was an adultress. Of course, neither of them signed up to "take care of business".

Explain the "rational" economic justification for that...

BC writes:

Definitely. I wonder why it's up for debate? Isn't the vast majority of irrational behavior and beliefs internalized by the influences of society?

This could be applied to economics in that many of the purchases that Americans make are not rational, but impulsive and to some extent pushed by society. People feel relatively deprived, and so they buy the nice car that their peers have despite the fact that their car is perfectly functional. Or they buy the car for an ego boost among their friends, implicitly pushed by them. Or they get started on drugs(despite evidence for its destructive addictiveness). The examples go on and on.

Bruce Cleaver writes:

Common to the above replies is the assumption that any choice other than maximizing goods purchased for dollars expended is irrational (a sort of materialist perspective in both senses of that word). This is simply not so. Rationality involves taking the totality of one's existence into account. You may buy the Saturn econo-box sedan and optimize the Car-per-dollars ratio...but you will likely as not never get laid, either. You may acquire a reputation as a cheapskate or lack flair. The examples go on and on.

Since no man is an island, he must also weigh his neighbor's reactions.

Sam Jew writes:

Kudos to Arnold. He finally "gets it" for once, though his brilliant insight is marred by an unbecoming self-doubt.

First I'd like to say a strong case can be made for the rationality of suicide bombing, (i.e. kamikaze pilots of WWII) even if it's something the typical, ignorant, midwestern American lacks the cognitive ability to grok.

I really like the original example of people going to college and get nice, steady jobs due to peer pressure the best. The reason it's the best is two-fold.

#1) It's an example any American can relate to.
#2) It's a choice that has in the last few years gone from rational to irrational, as there are no nice, steady jobs for college graduates in America to speak of, while this myth, and in particular the social pressure to subscribe to it, continues to be extremely pervasive in American society.

I've dealt with this pressure myself and was strong enough to overcome the single choice a so-called "freedom-loving society" would force down my throat only because unlike the stupid, worthless lemmings that comprise American society, I was intelligent enough to recognize that the choice to conform was not a rational one and that the tide of history was on my side and more importantly, I had seen a glimpse of the outside of the box.

The future direction of history can take one of two directions.

If I can indeed leverage my superior and single genius to rise above my circumstances and realize significant value through human capital alone, it will vindicate the spark of creative potential in all mankind as the ultimate resource.

Failing that, the brand of "freedom" promoted by the right will plunge America into a downward spiral that will eventually put it on par with China, India, Russia, and the Philippines as the single "free" market reaches its equilibrium point and the entrenched interests dominate.

Lawrance George Lux writes:

What is the irrational behavior and define the social pressure. The irrational behavior is not so irrational: the Individual avoids the difficult task of intergrating into a larger, more complex environment. The social pressure is family and community stroking the Individual, and claiming the greater culture is a racist turd. lgl

skh writes:

Apparently, social pressure has caused Sam Jew to become irrational. So, in this instance, the opposite effect has occured. The social expectation was overwhelming, causing Sam not to seek traditional higher education, and we are left to wonder if his expansive intellect has allowed him to succeed in spite of his nonconformity.

Normally, social pressure causes non-conformity when the individual fears an inability to conform. Usually observed in teenagers who claim that their abberant behavior is a manifestation of 'individuality,' the root cause is a paucity of social skills, a sub-par intellect, or a stigmatizing physical condition that invites ridicule.

Irrational behavior, by its very definition, can't be explained at all...because it is irrational.

Sam Jew writes:

Irrational behavior: devoting the entirety of one's youth holding up one's end of the social contract to get into and graduate from one of the top universities in the world only to be railroaded into working a dead-end job at $8/hr "as a favor."

Irrational behavior: contributing a factor of production to the global economy that is already in ludicrous excess supply and valued as such by the marketplace.

Integrating into the small-minded, socially-conditioned, defunct
paradigm of permanent serfdom: at such time as adequate incentives to do so are offered to either myself or one of my contemporaries with better social integration skills.

Certainly it seems to me as a result of broadening the scope of this question to control for all of the factors that others have groundlessly assumed I lack, (education, social skills) it becomes clear that the problem is neither me, my attitude, nor my social skills, but rather one of broader macroeconomic forces that are precisely as I describe them and a monolithic culture of red state neanderthals who lack the cognitive skills to identify and articulate the real problem.

p writes:

Interesting ... I think that it is an explanation that is off the mark ... the social pressure hypothesis in my opinion fails to explain social behavior ... Let's start with the fact that the hypothesis must not explain just african american failure but also african american sucess, white american success and failure, etc. It does not ... a hypohesis not a theory make ... We need to explain the full two by two ... Success vs failure ... individual vs group norms ... Social pressure is possibly an element ... at best necessary but not sufficient

shamus writes:

Reasons to become a suicide bomber might include religious belief, patriotism, threat of torure, or having your family held hostage against your performance. However, social pressure of one sort or another is behind each of these reasons, and the behavior would not be rational absent social pressure.

Remarks about "typical, ignorant, midwestern Americans ... lacking cognitive ability" are a form of hate speech that serve to identify their author as a bigot.

Robert writes:

The catch is understanding "otherwise irrational". People come from radically different value systems. One of my friends had a good job, lived in the same apartment for 10 years through the period when Colorado Springs was the foreclosure capital of the US and refused to buy one of the incredible deals available, despite many of her friends’ exhortation. Seems irrational to me.

The decision to not get good grades can appear very rational to a kid who sees how the nerds are treated.

William Woodruff writes:

All great points. I sincerely believe irrational behaviour can be explained by social pressure. From suicide bombers to overweight americans (how many times have you heard someone overweight berating other citizens for being 'too skinny') to high Mercedes ownership in (relatively) wealthy communities. All of the previous mentioned activities which can be deemed as irrational.

I marvel sometimes that there are people who think that the existence of irrational behavior needs explaining. (I mean, unless you rig things so that virtually anything a person does is automatically labeled "rational.") Isn't it a little like asking "why is there grass?" It's just part of life, isn't it? Personally, I'd love to see economics give up its skepticism in the face of "irrationality," accept that it's a big part of life, and get on with trying to make some modest sense of things.

Yenko writes:

Amen, Blowhard! How much time, energy, money, and heartache would be spared absent the need to find a "reason" for every instance of irrational behavior? It's right up there with the concept of "closure". Every bit of it crap.

What ever became of the notion that s&*t happens?

M.N. Muench writes:

People may be considered irrational when viewed from the perspective of one's own information. Often, very often, when one takes the time to understand the information base from which the individuals are operating they no longer can be considered irrational; just having a different set of information than the observer.

The basic economic assumption that people are rational may not be perfect but it likely errs on the side of explaining market function. The corollary is, of course, that people also have perfect information. However imperfect information does not imply irrationality.

Accept irrationality and nearly every graduate student will, on first investigation of their topic, return with the conclusion that the people or markets they are studying are irrational. Sending them back out to learn more about the people and the market in order to explain activity is often their first true test of being an economist.

The assumption of rationality works. When a case is found where it does not appear to it makes a great topic for an article. Perhaps the potential for publishing explains the reason cases of possible irrationality are an economists' fetish.

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