Friday, February 17, 2017

Maitreesh Ghatak's bus

We have enjoyed this week the presence of London School of Economics scholar Maitreesh Ghatak at my UAB department's seminar series. He presented a paper on intrinsic motivation, extrinsic incentives and social distance, which is part of his research agenda on non-conventional incentive issues. Professor Ghatak not only has a very ambitious and fascinating research agenda, but has been increasingly involved in making his voice heard on a number of issues that have to to with the rise of national-populism in many regions of the world, including his country of origin, India. His opinions on issues that combine concerns of income distribution and concerns about identities are shaped by his personal experience as a young left-wing activist in India who went to study a PhD in Harvard and had a first academic job at the Chicago economics department. He then moved to London, where he has gone through the sad experience of the Brexit referendum. He is a vocal critic of Indian Prime Minister Modi, another nationalist that shares some features with other national-populists. Maitreesh Ghatak told us an interesting metaphor at lunch time about identities and scapegoats. I have seen that he wrote about it in an article before: "Consider the following example. Suppose you are waiting at the bus-stop, along with some people who are visibly different from you. If buses keep on coming, whether you feel positively towards these outsiders or not, you will mind your own business and focus on your journey. Now consider a scenario where buses come infrequently, and when they do, they are terribly crowded. The bus stop will get more and more congested and you are going to get more and more frustrated and ready to vent your anger if you found a target. If everyone around you looks the same, then you are more likely to blame the bus company rather than fight among yourselves. However, if there is a small but visibly different group of “outsiders,” then as a member of the majority group, you might begin to find their presence highly annoying.
If we take the arrival of buses as a metaphor for economic opportunities, so long as the buses keep coming – or as long as there is the prospect of economic mobility -- you do not want to disrupt the system even though you do not necessarily like people who are visibly different from you. But as growth slows down, you are likely to get angrier at visible scapegoats whose ethnic and cultural differences now seem more salient than their class affinities with you. The immigrants then become symbolic of all that is wrong with the “system”. Not just that; earlier, you may have tolerated the rich driving in cars while you waited for a bus, thinking one day you or your kids will have cars. When that possibility becomes increasingly remote, other than being upset with the “others” at the bus-stop, you also become angry at those driving cars since you feel the whole system is unfair."

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