Order Out of Chaos

In some departments of our daily life, in which we imagine ourselves free agents, we are ruled by dictators exercising great power.

--Edward Bernays, Propaganda (1928)

Centuries ago, when the details of the natural universe were first being worked out with mathematical precision, a mental picture began to emerge in some quarters. Some philosopher-physicists began to believe the universe worked like a fabulously large and complex clock: given knowledge of conditions at any instant, one could take a set of deterministic physical equations and do a little lot of math and end up with perfect knowledge of any future state of the universe. Gradually, better understanding of the emergence of chaos from certain non-linear (but deterministic) systems and the 20th century revelation that an (apparently) indeterminate event lies at the heart of quantum mechanics disabused the world of this notion. But the clockwork universe idea was a subject of interest for centuries.

So, too, in the late 19th century and into the early 20th century, did some loosely analogous ideas about the social universe come into vogue. Social structures and organizations became laboratories for a new kind of scientist, but one with every bit as much expectation of complete mastery of his craft as the clockwork physicists of earlier centuries. Thus arose enthusiastic new philosophies like “scientific management” and sober analyses like the rigid Weberian account of bureaucracy. To some degree this dream of a clockwork social universe also manifested itself in politics, as optimistic reformers took on the messy patronage systems undergirding urban political machines and sought more scientific, merit-based civil service structures.

At the tail end of this intellectual movement a remarkable little book emerged. The book can be traced to another intellectual history (which we’ll talk about another time) but its appearance at a time of such confidence in the nascent science of shaping society is impossible to ignore given its thesis. It was produced by a nephew of Sigmund Freud, Edward Bernays, a man who became involved in the U.S. government’s successful propaganda efforts during the First World War. Bernays recognized that propaganda, such a potent tool in wartime, could become a powerful force in peacetime.

Thus he set out on a successful course in the postwar world to develop what we might lovingly call “public relations,” though Bernays himself was able to see through the negative connotations that came to surround the word “propaganda” and embrace that term. In 1928, he developed a piece of propaganda for propaganda itself, a book entitled Propaganda. Pretty meta.

Bernays asks “If we understand the mechanism and motives of the group mind, is it not possible to control and regiment the masses according to our will without their knowing it?” Propaganda, understood by Bernays as a not-quite-scientific set of principles for mental manipulation of the masses, is, in his words, a “practice of creating circumstances and of creating pictures in the minds of millions of persons.” This notion of “creating circumstances” is one that recurs throughout the book. Propagandists are not pulling strings on marionettes or unconsciously fully assuming agency for the masses. Rather, they are manipulating the background in which impressions, conceptions, and decisions are formed. By creating the right circumstances, the successful propagandist configures the dominos; a little push here and they begin to fall, with the vagaries of human nature and psychology inexorably leading individuals en masse to the desired endpoint. Like clockwork.

Of course, Bernays recognized limits to propaganda’s powers. Used skillfully it could be a tremendous tool for smoothing out humanity’s rough edges and overcoming our cognitive deficiencies—even turning them to our, collective, advantage. But it can’t lead the mind where it won’t go. Some products just can’t be sold.

(Despite some interesting attention paid to political uses of his craft, it’s clear that more than anything Bernays understands propaganda to be lucrative. One of my favorite passages:

Under the old salesmanship the manufacturer said to the prospective purchaser, “Please buy a piano.” The new salesmanship has reversed the process and caused the prospective purchaser to say to the manufacturer, “Please sell me a piano.”

The book is, after all, in many ways an advertisement to potential private sector employers of Bernays' skills in the arts of the “new salesmanship.”)

Whatever else can be said about his ideas, clearly Bernays’ insight in pinpointing “creating circumstances” as the key to shaping outcomes is critical. It’s an insight that would be echoed in a big way nearly a century later by Richard Thaler and Cass Sunstein (two UChicago scholars, though Sunstein fled for the greener pastures of Harvard a few years ago and currently resides in the Obama administration as Administrator of the Office of Information and Regulatory Affairs), most notably in their 2008 book Nudge.

Thaler and Sunstein rebrand Bernays’ essential concept as “choice architecture” and its implementers as “choice architects.” In a very real way, these architects are one important incarnation of the “dictators” Bernays referenced; as he wrote, “We are governed, our minds molded, our tastes formed, our ideas suggested, largely by men we have never heard of.” In Thaler and Sunstein’s telling—in their paper “Choice Architecture”, which is an awesome and highly recommended read if you have a few minutes--“A choice architect has the responsibility for organizing the context in which people make decisions.” These are the circumstance-creators of Bernays’ invisible intellectual dictatorship. If acting deliberately, these architects have enormous power to shape decision-making on a large scale. As Thaler and Sunstein write in that paper:

Norman’s basic lesson is that designers need to keep in mind that the users of their objects are Humans who are confronted every day with myriad choices and cues. The goal of this essay is to develop the same idea for people who create the environments in which we make decisions: choice architects. If you indirectly influence the choices other people make, you have earned the title. Consider the person who designs the menu in a restaurant. The chef will have decided what food will be served, but it is someone else’s job to put those offerings on paper (or blackboard) and there are lots of ways to do this. Should hot starters be in a different category from cold ones? Are pasta dishes a separate category? Within categories, how should dishes be listed? Where should prices be listed? In a world of Econs [T&C’s word for imaginary beings that “reason brilliantly, catalogue huge amounts of information that they can access instantly from their memories, and exercise extraordinary will power”], these details would not matter, but for Humans, nearly everything matters, so choice architects can have considerable power to influence choices. Or to use our preferred language, they can nudge.

Of course, choice architects do not always have the best interests of the people they are influencing in mind. The menu designer may want to push profitable items or those about to spoil by printing them in bold print. Wily but malevolent nudgers like pushy mortgage brokers can have devastating effects on the people who are influenced by them. Conscientious choice architects, however, do have capability to self‐consciously construct nudges in an attempt to move people in directions that will make their lives better. And since the choices these choice architects are influencing are going to be made by Humans, they will want their architecture to reflect a good understanding of how humans behave.

The importance of “environments in which we make decisions,” the circumstances in which decision-making takes place if you will, is hugely important to the choices people make, utopian conceptions of human beings as enlightened rational calculators aside. The concept of bounded rationality--that men are not calculators, but rather frequently use mental shortcuts and emotional or borderline irrational techniques to aid in decision-making--was introduced by Herbert Simon in the 1950s and is relevant to this picture of how our minds work.



But, as it tends to do, my mind strays to a current health policy issue. Earlier this month Consumers Union released a report they developed in conjunction with a communications firm: “Choice Architecture: Design Decisions that Affect Consumers’ Health Plan Choices.” In 2014, under the Affordable Care Act, residents of every state who don’t have health insurance through their job are supposed to have access to new markets called exchanges (technically, customers are supposed to be able to begin shopping for insurance plans on October 1st of next year). Health plans in the exchanges will compete in “tiers” of coverage, based on a calculation of how generous they are—bronze, silver, gold, and platinum are the four levels of coverage that will exist. These standardized levels are intended to make decision-making easier by allowing apples-to-applies comparisons of insurance plans within a given tier of coverage. This, along with new standardized product descriptions, should help to overcome some of the cognitive limitations that become apparent when a person is shopping for a complex financial product like insurance—limitations that insurance companies can and (I assume) do use to their advantage in the current marketplace.

But this report on choice architecture is focused on a particular aspect of the exchanges: what the web-based health plan chooser tools will look like. When you log onto your state’s exchange website (once it exists), you’ll be guided through a smooth, user-friendly process that will help you find a health plan that suits you. But, as the report’s authors note, “Given the number of attributes associated with health plan choices (premium, covered services, provider quality, etc), no website can emphasize all elements of a health plan equally. Tool designers make decisions about what to emphasize and how to frame the elements that they feel are important to consumers, such as health plan cost or quality.” In short, the choice architecture of the chooser tool is going to be very important.

In particular, the authors are concerned about the initial set of plan options that will be displayed to the customer shopping for a plan on the exchange website. The importance of default options is something Thaler and Sunstein emphasize in their work because, more often than not, folks gravitate towards the defaults when they make a choice (“For reasons of laziness, fear, and distraction, many people will take whatever option requires the least effort, or the path of least resistance,” T & S write.) From the exchange choice architecture paper:

The study emphasized the choice architecture used to display the initial set of health plan options. The default choice set radically affects consumers’ shopping experiences because once they see the default, they use it as an anchor or baseline for the rest of their selection process. What consumers see first will frame their understanding of the rest of information – in effect, creating a mental model for them. Consumers won’t always know what they aren’t seeing, and the choice architecture conveys implicit and explicit decisions about what is important. Research conducted by PBGH/CalPERS [an existing exchange in California] shows that 93% of the time the default display of information is accepted by consumers with no customization on their part. More than 60% of users of the Checkbook site make their decisions without leaving the initial summary screen.

The authors of the Consumers Union report looked at how existing exchange-like tools work (including the existing exchange in Massachusetts) to consider the options available to states as they think about how to display plan choices to customers. The report and the considerations it presents are interesting in and of themselves, but the underlying moral is one laid out by Bernays 80-odd years ago: when folks shop for insurance plans on their state’s exchange website, imagining themselves free agents, they are in fact going to be ruled by dictators whose design decisions greatly affect consumer decisions.

If you’re slightly unnerved by the power afforded these invisible, web design dictators, perhaps Bernays’ parting thought—reminding us that propaganda, and thus choice architecture, can be a tool for achieving good and noble aims—is worth noting:

Intelligent men must realize that propaganda is the modern instrument by which they can fight for productive ends and help to bring order out of chaos.

Once more unto the breach, dear friends...