Tullock challenges for Facebook

Bruno Frey of University of Zurich has this superb paper giving two Gordon Tullock challenges to mainstream thinking.

Tullock believed – What is important, will be manipulated by the government. He was always sceptical of innovations which believed that they could undermine government’s role.

In this regard, Frey throws two Tullock challenges to the recent innovations/new ideas in public choice theory:

I call “ Tullock Challenges” open issues identified by the kind of thinking Gordon represents. I choose two innovations – as far as I am aware – Gordon did not deal with because they are quite recent. The first innovation is one of method: it has become possible to measure subjective well-being, or happiness. It is one of the noteworthy results of modern happiness research to demonstrate that such measurements make sense and are reliable. The possibility to measure happiness has had important policy consequences; countries like France or the United Kingdom now engage in policies designed to maximize happiness.

The second innovation I deal with are the digital social networks such as Facebook, Twitter, to some extent Google, and other internet platforms. The policy consequences may be that revolutions from belowappear to be possible now. The examples of Tunisia, Egypt and Libya, as well as other Arabic countries and beyond, may point in this direction.

Challenge is both these are likely to manipulated by government for its own benefit:

The challenge is to understand what consequences these two innovations have for society – and what political measures can be used to make them beneficial for the people. While the two innovations are on a quite different level, there is nevertheless a  common theme. I will argue that both innovations lead to strong incentives by the governments to influence the policy consequences. Indeed, I propose that “ What is important, will be manipulated by the government ”. Thus, I claim that governments will manipulate the happiness indicators and the  digital social networks in their favour. This is a generalization of the well-known result from Social Choice Theory that all preference aggregations can be manipulated.

Om first challenge, he discusses recent findings of economics of happiness and some recent findings from various projects on the same. Two broad ideas emerge:

– Due to the insight of happiness research that individuals tend to compare themselves to others, those experiencing an income increase impose a negative external effect on other persons. This produces a rat race in which nobody is better off despite investing much effort to keep up with the Joneses. Scholars such as Frank (1999) and Layard (2007) propose to (heavily) tax these external effects by equalizing incomes.

– Unemployed persons are much less happy than employed ones but this effect is mitigated when the unemployed live in areas in which many other persons are unemployed. It follows that a happiness maximizing policy should focus on areas with little  unemployment as it is there where people feel the most unhappy. It follows that policy makers should be less bothered by the pockets of high unemployment, as people there are less unhappy than those in areas with little unemployment.

Here the challenge is as the happiness index becomes official, the govt will manipulate it. We have many instances in history where govt has manipulated numbers for its own gains.

Even if for some reason it was not possible or suitable to manipulate the existing happiness index, governments have a way out. They can introduce a new happiness indicator claiming that it captures the relevant or “true” happiness of the population in a  better way. In actual fact they introduce it because it is more favourable to the politicians in power. For instance, a new happiness indicator can be constructed giving more weight to people with low income, or  with unfortunate life experiences, provided the government believes to be able to increase their happiness and to therewith demonstrate that it is successful.

As far as facebooks are concerned, government has a lot of incentive to manipulate them:

  • Persons active on the internet do not only interact with other users but can also be identified by the police and secret service. As a consequence the use of these platforms is dangerous.
  • – Independent suppliers of internet information such as Wikileaks can be haunted, persecuted and silenced and internet providers not conforming to the wishes of the government can be shut down (see Economist February 12th, 2011).
  •  Governments can capture the internet by employing professional pro-government bloggers. As a result, the digital social networks are undermined.
  •  Finally, governments can use the possibilities provided by the internet to divert attention form politics. It can provide attractive films, video clips, sporting events, celebrity news or pornography shows so that the incentive to demonstrate or revolt is decreased or vanishes altogether.

We are already seeing these things happening all over the world, Social networking sites has become a great too fro governments as well. On the last point of govt using internet to divert attention from main policy there is a nice example from Germany:

There is concrete evidence from the former German Democratic Republic (Kern and Hainmueller 2009) that such “opium for the masses” may indeed work. At that time, parts of the country were able to receive TV channels from West Germany, while other parts did not and could only consume the incessant and boring propaganda from the communist rulers. One would expect that  those who every evening could see the far higher living standard and freedom in the West would be more opposed to the GDR government. In fact the opposite was true. East Germans exposed to West German TV were more satisfied with life in East Germany (they, for instance, made fewer applications for exit visas). This seemingly paradoxical result can be attributed to TV primarily being a source of entertainment. Television viewers did not threaten the Communist government because they were too much occupied vicariously consuming the Western life style.

This case suggests that governments may actively use digital platforms to provide entertainment and to dampen political unrest. The idea that “no dictator in the world can stop Facebook” (a recent title in a German newspaper) is naïve – and Gordon Tullock would certainly be one of the first to agree with that verdict. Governments have indeed a strong incentive to manipulate internet innovations.

What about recent middle east revolts?

It could be argued that the recent events in Tunisia, Egypt and Libya indicate that the existing digital social networks helped to topple dictatorial governments. This is true but might be the exception rather than the rule. The means of internet communication are relatively recent innovations and the respective Arab governments were therefore not sufficiently prepared to counter the danger. It may also be argued that these dictatorships were technically and mentally incapable of meeting this challenge. It must, however, be assumed that other authoritarian governments will quickly learn once they realize how dangerous digital social networks can become to them. Moreover, it is not clear whether revolutions based on digital networks are really effective. The activity induced takes place at an individualistic level and reflects “flash campaigns” devoted to ever- new issues. In contrast, the establishment of a new, more democratic, government must be based on a dependable and stable constitutional framework.

What should be done? Three ways to restrain govt:

  • Independent bodies — like an independent  central bank we create  say independent telecommunications/statistical agency which tries to undermine govt influence. However, like central banks their independence always remains a q-mark.
  • Stronger political participation possibilities — this is to counter first proposal. People should be allowed to participate in various policy decisions to restrain govt. Informed citizens act as a major deterrent.
  • Random mechanisms — In  contrast to a traditional definition of democracy focused on the right to vote, here people are elected based on random selection. It has limitations of electing people who are not as competent as politicians. However, it saves a lot of funds diverted to fight elections. Moreover, randomly selected people can always take help from experts and public officials.

If missing competence was indeed the crucial issue, a democracy such as Switzerland relying on the citizens deciding about all major issues by referenda, would have failed long ago. The opposite is the case. This suggests that the idea of random elements to better reflect the preferences of the population should be taken more seriously than it has been.

Hmmm…

Overall what are the lessons from Tullock? Basically one needs to probe more and just not accept public choice innovations as it is:

“The world is changing, and politico-economic analysis should be aware of the innovations occurring”. Here I have chosen the measurement of happiness and the emergence of digital social networks as examples.

– “Do not be naïve”. Innovations do provide new options to further democracy, but it should not be overlooked that, at the same time, they offer new possibilities for governments to manipulate the population. It has here been argued that governments will manipulate the happiness index as well as digital social networks.

– “Seek new solutions”. Proposals should be made to go beyond the existing constitutional setting. The government’s incentives to manipulate the happiness data and the digital social networks should be restrained by extending the direct political participation rights of the citizens. Random elements should play a larger role in the legislative, executive and juridical branches of government. These changes help the citizens to be better informed, to be more self-confident, and to prevent the emergence of a political class serving its own interests. 

The same point about facebook being used by both democracy lovers and dictators was made by Evgeny Morozov as well.

Overall fascinating stuff. Linking facebook to public choice theory is a superb perspective…

 

 

 

 

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