Why do governments act irrationality?

Summary: Our era is driven by irrational actions by governments. Foreign interventions in the Middle East, with no rational hope of accomplishing any logical goals.  Governments in Europe pursuing guarantee-to-fail tactics to maintain the broken European Monetary Union. Our quote of the day examines one response of governments to failure.

Walking away is sometimes the most rational decision when the impossibility of a policy becomes clear, but often State leaders did not get where they are today be being rational.  So governments are not like Lord Keynes — when the facts change, they don’t necessarily change their minds. Sometimes they just change the facts.
— paraphrased from a report by Russell Napier of CLSA, 22 June 2012.

This is, of course, nothing new.

“The commonest error in politics is sticking to the carcass of dead policies.”
— Lord Salisbury, discussing Great Britain’s policy on the Eastern Question (1877)

23 thoughts on “Why do governments act irrationality?”

  1. WTF (unattended gmail account)

    Jonathan Haidt Explains Our Contentious Culture, February 3, 2012

    From the comments:

    “Liberals tend to rely primarily on issues of care/harm, fairness/cheating and liberty oppression when making moral judgments. Conservatives use these 3 plus those of loyalty/betrayal, authority/subversion, and sanctity/degradation. AND there is a difference between the concepts of fairness, for Liberals it is about leveling the playing field and for Conservatives it is about reaping ones just rewards, or reaping the results of ones Karma, ones actions.

    My experience show this is indeed the case. The two sides see issues through very different lenses. Unless one side at least can figure out how the other side views issues we will be doomed to constantly butting heads, talking through each other rather than with each other.

    … you can understand why Conservatives place such a value on moral concepts that help them keep people from leaving the Polis as well as keep outsiders out of the Polis and help them keep tight control over what goes on in the Polis.

    Liberals with their much broader view of the Polis stress concepts that level the playing field for all within their Polis, and find the concepts of loyalty/betrayal, authority/subversion, and sanctity/degradation the very things that keep a Polis from expanding and including ALL people, or people outside the original group, and from keeping such a BIG Polis from functioning.”

    Another comment:

    “The polis expands in response to a threat from outside, and not much else. Many such instances in world history. … The polis will broaden when the threat is so real and so imminent that both sides believe it.”

    1. I believe those “lens” are crafting a modern US version of the death struggle between “Populares and Optimates.” A political/social/economic class war between the 1% and 99%, ultimately leading to the demise of the current 5th party system of our republican order (1933 to present), or in more frank terms the Late (5th) American Republic.

    2. WTF (unattended gmail)

      Yes, that is what the preponderance of evidence on the FM web site indicates, presumably correctly.

      Much, but not all, of the “1%” are corporate predators. attribution: Sucking You Dry- Notes on Vampire Capitalism, Trevor Malkinson, 22 June 2012

      Evolutionary scientists have found that human consciousness and culture is limited by DNA to tribalism. Civilizations are scaled up tribes, and they are very unstable ones.

      Paradigm regression (to a society organized for the 1%, using medieval religion’s “one truth above all” anti-pattern) is probably a feature that is inevitable in such unstable circumstances.

      In the past, FM has pointed out that Tocqueville predicted in 1840 that americans would become a “weak and servile people” because they would become dependent on a central government that they hate due to their history of resistance to such government (England’s royal bureaucracy). The “weak and servile” american people would become dependent on central government because on a multi-lingual/multi-ethnic society, all of the other cultural centers of gravity have largely disappeared, including religion. Postmodern pluralistic culture magnifies the problem greatly.

      The USA has evolved beyond the “coherence needs” of the industrial age and the version of the Republic that was cobbled together by the industrialists 100 years ago, and based on Enlightenment (modernist) ideals and achievement memes.

      Pre-modern/pre-rational society was based on dependence and mythic conformism. Modern society was originally based on independence, achievement and rationalism. Postmodern society will presumably be based on interdependence, and holistic, integral values.

      There is currently no serious proposal to create a New Republic based on holistic politics, and until there is, things will probably continue to get more and more crappy.

    3. WTF (unattended gmail)

      “Postmodern society will presumably be based on interdependence, and holistic, integral values.”

      Actually, I missed a step. Postmodernism has already entered its own crisis. Some theorists refer to the cause of that crisis as the “mean green meme”, or “boomeritis”. The chief “pathologies” of postmodernism are narcissism and nihilism, political correctness and thought policing. In attempting to “deconstruct” the “materialistic” absolutes of modernism and industrialism, the postmodernists created their own absolutes. So now, the challenge is to create something at a higher level of coherence, or integration, that honors the truths of all previous paradigms, and avoids their “pathologies”.

      Quote from Jean Gebser, pioneer of Inegral Theory (Jung Institute) (website)

      Anxiety is the great birth-giver. A new form of consciousness emerges and realizes itself during a fatal crisis, when the prevailing structure has reached the end of its expressive and effective possibilities, causing new powers to accumulate which, because they are thwarted, create a narrows or constriction. At the culmination point of anxiety these powers liberate themselves, and this liberation is always synonymous with a new mutation.

      The exhaustion of a consciousness structure has always manifested itself in an emptying of all values, with a consistent change of efficient qualitative to deficient quantitative values. It is as if life and spirit withdrew from those who are not co-participants in the particular new mutation. As mythic cultures declined, religious doctrine turned rigid and stagnant, locked into tradition rather than renewed through inner experience.

      In the movement from this mythic to the mental-rational mind-set, human thought was directed outward, discovering the external world, for the first time, as an object of inquiry in itself.

      Like a lamp switched on in a dark room, the mental-rational mind illuminated the physical world, which revealed itself, first of all, as a spatial reality. Magic occurs in the dark, indeed in darkness itself, while myth occurs in the night and dreams where a twilight is already present. But the mind or the mental presents itself in the brightness of daylight. In dividing itself from its past, the mental mind abandoned the ambivalent and ambiguous polarities that characterized the mythic world, based on its projections of the soul and psyche, for duality, a diminished and mentalized form of thought, separating matter and mind, rationality and intuition, organic and inorganic, and so on.”

  2. “So governments are not like Lord Keynes — when the facts change, they don’t necessarily change their minds.

    This is, of course, nothing new.”

    Then how possibly Keynesian model of governmental regulation of economy could work at all?! That model can suck blood for a while from a body of a healthy economy. It can sacrifice 5000 years old commodity money standard in a favor of governmental paper money, it can kill little by little free market in favor of governmental programs and regulations, but one day it will be out of bullets.

    Government is irrational? What are you talking about? Politicians are acting in interest of politicians from the beginning of a state. Perfectly rational. Only Keynes didn’t know that.

    1. Quick guess: you have never read anything Keynes wrote, and have near-zero understanding of Keynesian economics. Or economics, in general.

      “Government is irrational? … Politicians are acting in interest of politicians ”

      It’s a convention (ie, shorthand) to speak of “government”, and things like “government vs. the national (or people’s) interest”. We all know that the government is not a unitary entity, and is composed of individual people (of which politicans is one group). I think the meaning of that statement was quite clear to most readers, and there is no need for pettifogging level of explanation.

    2. Background on the nations goving off the gold standard during the Great Depression

      Keynes was not the prime mover; he was not highly influential in the early 1930s. It was certainly not Keynesian Economics, for which the foundational text General Theory of Employment, Interest and Money was published in 1936, after most nations had gone off the gold standard.

      Nations went off the gold standard because their economies were getting crushed, and monetary stimulus was not possible while fixed to gold. Going off brought immediate relief. The lines in color show industrial production after going off gold. (click here to see the graph more clearly)

      League Of Nations report, 1937

      For an introduction to this subject:

  3. 1. “We all know that the government is not a unitary entity, and is composed of individual people (of which politicians is one group).”

    It is very dangerous weasel-talk. And here is a rule of thumb: government – is the one who gives command, society are those who execute command (under duress of state enforcers).

    2. re: Great Depression (GD)
    You expressed (not more then) one of the several major outlooks at GD. Austrian School, for example clams that governmental manipulation with gold market turned regular recession into GD.

    Ron Paul vs. B.S. Bernanke:

    Paul: Is Gold – money?
    B.S.: No.
    Paul: Then why banks are still hoarding gold?
    B.S.: a…. it is tradition.

    LOL !!!

    1. “It is very dangerous weasel-talk. And here is a rule of thumb: government – is the one who gives command, society are those who execute command (under duress of state enforcers).”

      Government is a part of society. The primary reason COIN fails is for the very fact that we are NOT part of that society.

    2. The great question about responding to comments: how to handle comments advocating pseudoscience and even more outre beliefs. Creationism, barycenters, homeopathy, holocaust denial, gold bugs. These differ greatly (in moral effects, among other things), but the common factor is that they’re unreachable by facts or reason.

      The usual recommendation is to just ignore them (they tend hijack threads, resulting in long pointless debates). Any suggestions?

    1. We have a winner for best comment of the day. Week. Perhaps year.

      No, gold will not work. Only our commitment, courage, and wisdom will stand against the degradation of America.

    2. The problem with storing value in “precious metals” as a safe haven for assets in an emergency runs the risk of seizure by executive order similar to EO 6102 issued by FDR in 1933. That diktat criminalized the “possession of monetary gold by any individual, partnership, association or corporation.”

      Since the US abandoned the gold standard and convertibility of dollars into gold in 1971, its an unknown whether the US government would execute a similar policy in a future monetary and fiscal emergency. My suspicion is that this will probably happen again by executive order and legislation, revaluing and fixing gold at a lower price from whatever its than current, inflated value.

      Economic ideologues of all persuasions forget, especially the Austrian, Paulist and maniacal dogmatism of the ‘tea party’ faction on the far right that modern, high finance banking and monetary policy is a mixed, POLITICAL/economic system. As never before 1971, the value of the buck in peoples pockets and corporate accounts is based virtually and totally on the “full faith and credit” of the US government.

      When Republicans screw around with the debt ceiling, either finagling budgets or failing to compromise for political theater and gain for the sole sake of ideology, they risk the destruction of that “faith” and plunging the US economy into an immediate fiscal and monetary emergency, which could rapidly evolve into a national and global catastrophe far tougher than what anyone can now imagine.

  4. They act irrationally because the pantomime of governance is preferred to the admission of the truth followed by real governance probably by someone new. Thus Europe denies that they screwed up bad when they cobbled the EU together, and that the perifery is bankrupt. We deny that we are war mongering, trade deficit running, junkies strung out on capital injections we do not earn. Lie and posture as long as you can, then repeat after the great Homer Simpson:

    It was like that when I got here.
    Cover for me.
    Good idea boss.

  5. Election cycles don’t make for rational decision-making. Government was never rational. It’s about fear. In the bureaucracy, fear permeates every level of decision-making. In a command hierarchy, whether in government or the military, fear creates it’s own particular logic. I sometimes think it’s the oldest form of logic around because you can predict it, plan for it, grow it, kill it all in very rational, systemic ways. I’m not saying it’s healthy or good, just that it’s reliable. I think our leaders have always understood fear and how it works. So in that sense, it’s a pretty rational entity and governments have used it for a very long time. So based on that, I’m not sure we can point to a Golden Age to compare the present to? I think that may depend a lot of on the view you got from the ticket you were given. But it’s an interesting point to reflect on I agree.

    1. “Government was never rational”

      I think that’s a gross overstatement. Although people — as individuals and groups — are not always rational, “never” is too large a word, as both individuals and groups often act rationally. That view reflects the massive propaganda campaign of the past few decades to demonize government. It’s also false.

      Major nations become major by long-term rational grand strategies, both internal and external.

    2. I believe rational or irrational governance is a state of affairs depending upon whether a polity is viewed at the dawn of an era or its end state. Much bad mouthing of the early US republic is much the norm today, but undeniably it was guided by capable leaders and sound policies. If that weren’t the case we wouldn’t be here discussing it.

      1. That’s in interesting insight! The start of a entity “destired to grow” is distinguished by “rational” (in hindsight) reasoning. The end of its history by “irrational” (in hindsight) reasoning.

    3. More about “government was never rational”.

      This meme is politically inspired, exhulting private (ie, large corporate interests) over government (people’s collective action). It’s also largely false. America was built to a large extent by collective action, using government-built infrastructure. The classic analysis is “The Myth of Rugged American Individualism“, Charles A. Beard, Harper’s, December 1931. It’s as appropriate today as when written during the Depression. Excerpt:

      This is only one of the many straws in the wind indicating a movement to exult rugged individualism into a national taboo beyond the reach of inquiring minds. From day to day it becomes increasingly evident that some of our economic leaders are using the phase as an excuse for avoiding responsibility, for laying the present depression on “government interference,” and seeking to avoid certain forms of taxation and regulation that they do not find to their interest.

      Beard describes the many services the government provided during America’s development:

      • Government regulation of railroads
      • Waterways (harbors, improvements to rivers)
      • The United States Barge Corporation
      • The shipping business
      • Building airway infrastructure, which subsidizes airmail
      • Building canals
      • Building highways
      • The Department of Commerce, the bureau of standards, the Federal Trade Commission
      • Tariffs (the wall behind which American industry was built
  6. Fascinating to observe the various propaganda talking points foisted on the gullible public by Fox News, Koch-funded think tanks like the Heritage Foundation, etc., being regurgitated by commenters on this forum. “Government has never acted rationally,” “changing from fiat currency to gold would solve our economic problems,” ad nauseum.

    The assertion that “government doesn’t act rationally” requires us to erase from our memories such large-scale projects as the Erie Canal, the transcontinental railway, countless useful public health measures such as the distribution of polio vaccines (leading to the virtual eradication of polio as a disease today) and the treatment of municipal water supplies to eliminate bacteria (cholera used to be a big killer in the 19th century — when was the last time you had a neighbor who died from cholera?), and so on.

    The claim that “gold is a yellow rock” pretty much exemplifies the type of low-information voter targeted by right-wing propaganda. Gold is an element, with atomic number 79, and is a highly conductive and non-corrosive metal — which is its main use today, in electronics, and occasionally as a chemical catalyst.

    Government act irrationally because human beings find themselves prone to mass irrationality. If you want an eye-opener, take a look at the history of koro in asia.

    “Koro is a culture-specific syndrome from Southeast Asia in which the person has an overpowering belief that his penis (or other genitalia) is shrinking and will shortly disappear. Also known as shrinking penis, the syndrome is listed in the Diagnostic and Statistical Manual of Mental Disorders. In China, it is known as shuk yang,[1][2] shook yong,[1][2] and suo yang[1][2] (simplified Chinese: 缩阳; traditional Chinese: 縮陽); jinjinia bemar[1][2] (Assam); or rok-joo[1][2] (Thai: โรคจู๋), is to describe an individual overcome with such a belief. For females, the belief focuses on the nipples retracting or shrinking.” – Source: Wikipedia entry on “koro.”

    During a particularly large mass koro panic in the North Bengal region of India in 1988, trucks traversed the streets broadcasting penis measurements of residents to prevent riots.

    America of course is no different — we are just as prone to mass panics and irrationality as asians or south Americans or anyone else. Google the Seattle windshield pitting epidemic or 1956 or the June bug scare of 1963 or the Mad Gasser of Mattoon in 1948 or the Moaning Monster of Bonham Woods (turned out to be a crow with asthma) or the Satanic cult child molestation panic of the 1980s or flying saucer craze of the 1950s for examples, or peruse a book like Charles McKay’s 1841 book Extraordinary Popular Delusions and the Madness of Crowds for a list of examples going back centuries.

    1. Good point about gold.

      “In truth, the gold standard is already a barbarous relic.”
      Keynes, Monetary Reform (1924), p. 172 — Anticipating the damage the gold standard would inflict on nations during the Great Depression.

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