Behaviorally Socialist Government?

It is a well-known fact that human beings often make choices that are counter to their best interests.  Yes, that includes you, dear reader.  And influencing people to do such things is not really all that hard.  Using advertising as an example, by appealing to people’s emotions, you can get them to buy things that are not necessary for their existence and may even be counter to their goals - like snack chips and really expensive jeans.  Appealing to your emotions helps companies stack the deck in favor of you exhibiting the behavior of parting with your money.  As it turns out, and as the newly established Social and Behavioral Science Team (SBST) under the Obama administration is proving, you can also use behavior-influencing techniques to get people to do things that are clearly in their best interests.  And it can be incredibly cost effective to do so.  By implementing a simple verbal prompt, people begin to save for retirement; requiring a signature on a form gets greater compliance with the terms of an agreement; and blast reminders can get potential students to complete the process of applying for college and get military service-members to renew their choices for earned benefits.  In the report that the SBST released in September, the proof of concept for the implementation of behavioral interventions to enhance government program efficiency and effectiveness was very clear; double digit percentage improvements and millions of dollars in potential increased revenue and tax savings.

Because these were pilot programs that were experimental in design, the SBST was extremely limited in what they could attempt and accomplish.  The scope of most of the interventions was limited to communicative prompts and form redesigns.  But as the report points out “…because behavioral changes to program administration often require little or no additional cost, returns on investment can be large even when project effects are small. It is no more expensive to send an effective version of an email than an ineffective one.”  The results of the pilot programs using minimal behavioral interventions known as “nudges” and “choice architecture” created dramatic, beneficial results.  But the social and behavioral sciences include disciplines like psychology, sociology and anthropology (and some other “ologies” that I’m forgetting right now) and they have all come a long way from Pavlov and his dogs.  Utilizing the vast wealth of research and data from the social and behavioral sciences could profoundly change the nature of governance.  Human behavior is not a mystery to us and just as companies can use behavioral techniques to sell you goods and services, organizations like the government can use the knowledge of behavior to make their programs more effective.  In fact, up until now, the government has been at a huge disadvantage in not doing so.  Program effectiveness is at the heart of simultaneously improving societal welfare and reducing government.  Could it actually be that, aside from benefiting society, the behavioral sciences show promise for finding commonalities among political constituencies?

This is not just a flippant, rhetorical question.  It is often forgotten that the social sciences includes economics.  Economics is the study of transactions and their value.  Transactions can be defined broadly to include a mother’s kiss on a child’s forehead, which can create an incredible amount of future value by way of the child’s self-esteem.  It is also considered a transaction when you choose to (or not to) read a document completely before signing it.  But, as we all know, economists tend to focus on those transactions that involve money.  Because of an historically excessive focus on money, however, it is also often forgotten that transactions are, in their essence, human social behavior.  Government exists in large part to facilitate the beneficial transactions within society and minimize or mitigate those that do not.  Quite frankly, how we’ve gotten this far without incorporating scientific research on behavior in government is a mystery to me and a testament to society itself.  But there is a wealth of knowledge in the social and behavioral sciences that has increased the understanding of beneficial interpersonal transactions tremendously, and it has been largely ignored until now.  All sciences investigate the realities of our world so that we can make predictions about what will happen under certain circumstances and make educated guesses about what is most likely to happen under uncertain circumstances.  The fundamental goal of science is, therefore, to help us poor, hapless humans to behave according to the best information we can get about the future.  Thus far, we seem to have been operating under aphorisms like “every man for himself” and “share and share alike” as attempts to govern behavior.  Science provides a more pro-active approach.  By observing behavior and predicting responses to stimuli we can get more individuals to behave in their own best interests and that of others.  We can get members of social groups to support one another, we can get families to function better, we can get people to eat more healthfully, save for the future, and avoid risky behaviors, and we can get more people to earn higher wages by staying in school longer.  These are all practical results of social and behavioral science research.  And now, finally, we can get government to be more effective and efficient.

The use of social and behavioral science in government is long overdue and we can go far beyond shortening wait times and reducing printing costs.  Human behavior, in large part, is not random and is surprisingly easily influenced.  Often, it takes little more than a well-timed or well-worded communication to create a huge, positive difference in someone’s future.  While behavioral science may not have politicians running to the middle isle and shaking hands yet, the SBST report proves one thing - it works.

Are Entrepreneurs in Short Supply?

By Jacqueline Verrilli

Because of the news of wildly successful start-ups, it’s easy to get the impression that there are lots of good jobs being created around the globe.  But a few disparate pieces of evidence add up to a much different picture.

Would you like to upgrade to a Full-Size car?

Underemployment is still a huge problem. The Pew Research foundation gauges underemployment by looking at the wages and salaries of college graduates. A person is considered underemployed if their level of education exceeds that required for their job, like a college graduate working the counter at a car rental agency, or if the job’s wages are substantially below what the average person with that level of education is earning.  According to Pew’s research, the good news is that underemployment in the US has been dropping steadily for the past 15 years.  In 1990, fully 65% of college graduates were underemployed in “Good non-college jobs”, and “Low wage jobs”. That figure had fallen to 50% by 2012.  But that, of course, still means that 50% of college graduates are underemployed. Shockingly, over 20% percent of college graduates are now ending up in jobs that earn less than $25,000 a year; 5 percentage points higher than back in 1990.


Given that studies show that underemployed individuals are far more likely to be dissatisfied with their lives, not just their jobs, this statistic has larger implications. Job dissatisfaction is the number one stressor cited in polls and large scale studies of US workers and is a major contributor to poor self-confidence and behaviors that lead to health issues.  So underemployment is not merely a financial issue, it has more far-reaching welfare implications.

Go Generate a Job, Will Ya?!


Just last month several news outlets reported that the major banks, including J.P. Morgan Chase, Citigroup, and Deutsche Bank, were turning away their corporate clients’ cash deposits and, in some cases, charging fees to hold the cash.  The Wall Street Journal reported that the ostensible cause was the new regulations being put into place to lessen the likelihood of another banking crisis making these large deposits more costly for the banks. But if we look more closely, there is also another reason. The October 18^th Wall Street Journal article entitled “Big Banks to America’s Firms: We Don’t Want Your Cash” states “the globe is awash in cash”.  The article cites soft economic growth and limited corporate investment as causative reasons for the excess of cash.  The article goes on, “Many businesses have large sums on hand and opportunities to profitably invest it appear scarce.”  It appears that big companies literally have more money than they know what to do with. They aren't purchasing other companies, engaging in mergers, or even spending on R&D.

This boils down to a perceived lack of quality investments in the marketplace and no new good ideas coming from internal sources.  If this trend continues, an economic slow-down is all but inevitable.

Where is My Real Iron Man?

Elon Musk has gotten a lot of attention for taking on gigantic projects and succeeding. From PayPal to Tesla Motors to SpaceX, Musk has set his sights on making the internet more efficient for transactions, disrupting the fossil fuel industry, and colonizing Mars in our lifetime. Well, that’s all well and good, but I still don’t own a robot.  And I want one. True, I do own a little automatic vacuum that is, as I write this, scampering around the house sweeping up my children’s crumbs and the dirt my husband tracks into the house after a run, but I don’t have a personal servant that can get into a self-driving car to run errands, cook fresh, nutritious meals for my family, and give me a neck massage when I’ve been sitting at the computer too long. Okay, okay… My stiff neck may not qualify as a big enough problem that a fully functioning cyborg needs to be created to solve it, but burning buildings and tedious menial labor jobs abound. My point is that there are many, much larger problems in the world that need to be addressed and it takes people who are willing to take big risks in an effort to create a particular vision of the future to solve them. Right now there is an abundance of educated individuals and cash, and not enough visionaries to put these valuable resources to good use.


It’s always great to hear about a new flavor of snack chip, and I am always super-geeked to hear the news from CERN about the search for dark matter. But the world is in desperate need of people who can look just over the next hill and create something truly useful for society’s present problems. To all you readers, I call for you to take up the glove, pick a problem, and start running the entrepreneurial gauntlet.  The world needs you.