We must avoid further undermining of the social contract and the trust it depends on

We must avoid further undermining of the social contract and the trust it depends on

Dr Maureen Gaffney, Chair, Nat. Economic & Social Forum, Writer and Columnist

In the spirit of forgiveness, we might start by acknowledging that governing in a modern democracy is not easy. Governments are elected by an increasingly diverse and fragmented electorate to pursue a host of contradictory goals. Disagreement and conflict about how the government should go about fulfilling that mandate is inevitable. But that’s the job – to find ways to successfully harness the dynamics of cooperation, to manage conflict, to keep people hopeful and focused on a common purpose and, as one of the best studies of leadership shows, encourage the heart of those we lead. The introduction of water charges was a fairly spectacular case study in failure to do any of those things.

Apart from the well documented political and governance mistakes, it revealed a distinct lack of emotional intelligence, not least in understanding the psychology of recovery from crises and setbacks. During the worst years of the financial crisis and the bail out, Irish people responded in survival mode to the existential threat to the country and to their own and their family’s future. As they absorbed loss after loss, they focused on trying to hold things together; and they did this not just effectively, but heroically.

But by 2015, the ground had stopped moving under them, and, as the Eurobarometer survey in November 2015 showed, most felt something akin to stability. As anybody who has ever gone through a major personal or family crisis knows, a serious illness for example, once the worst of the crisis is over, you are still in a vulnerable state, and you cling tightly to the new, but only slightly improved, status quo.

During that early recovery period, with your personal resources still depleted, any setback, however minor, assumes huge threat potential. Rationally, this new setback may be far less than the much greater losses you dealt with during the crisis, but your reaction is not rational. It is emotional. And it is very negative. That is why, during the early recovery period, we try to keep the environment as stable as possible. If a new burden has to be introduced at that time, it has to be done in a very careful, cautious, and sensitive way. Neither caution, care, nor sensitivity were much on display in the introduction of water charges in a just recovering Ireland.

I want to focus today on just one aspect of the water charges debate: the effects of the continuing uncertainty about what will happen to the 64% of Irish people who have already paid their water charges. As I understand it, the position of Fine Gael, Labour and some of the Independents is that, in the event of water charges being abolished, those who paid should be refunded. The Fianna Fáil position is that those who paid should not be refunded, but that those who did not pay should be pursued. Sinn Féin is opposed to any refunds to those who paid. In one radio interview that I heard with one of the leading campaigners against the water charges, he said that those who paid ‘should have known better’ than to pay when they saw the thousands of people protesting on the street.

This political wrangling about whether people should be refunded is not a minor policy matter, or an administrative detail to be tidied up. Rather, I am concerned for what this issue means for politics, and the serious risk it constitutes to the social contract, which is the fundamental basis for government, law, and a functioning republic.

Trust underpins the social contract. It works on the basis that people consent to be governed, pay their taxes, and obey the law and because they trust that the government will use the people’s collective investment to build the common good, and that in turn will benefit them. But the social contract is also based on trust that the government will ensure that everybody else in society follows the same rules and makes their fair contribution.

If, in the case of water charges, that does not happen, if equity does not prevail, it will further damage trust in a country already dealing with a severe crisis of trust. I referred earlier to the Eurobarometer survey. Since 1973, the European Commission had carried this twice-yearly survey of EU countries on a variety of issues, including public trust. The last survey which came out in November 2015, showed that Irish people’s trust in political institutions – the Dáil, the Government, and political parties – is at an all-time low. Political parties come out the worst – 81% of people distrust them.

Compared to other EU countries, the Irish have a long tradition of distrust in politics, but that trust has further eroded since the onset of the global financial crisis. This distrust is accompanied by a general indifference about politics. A third of adults report they never discuss national politics, and only 20% talk regularly about local politics. And, of course, distrust and indifference feed on each other creating a downward spiral.

After a cheerless, vision-less election, the political wrangling and posturing during the long-drawn out process of government formation, and the continuing uncertainty and political maneuvering about Irish Water, this distrust in politics is likely to have deepened. What we have to now focus on is not making a bad situation even worse by further undermining the social contract and the trust it depends on.

The psychology of the social contract
When any group of people get together to organise their lives collectively, whether in a family, a community of interest, or as a whole society, the first and most basic issue they have to resolve is how to find ways of cooperating with each other. They have to agree what contribution is required from each member to make the group work. This contribution – time or money or other resources – inevitably involves a sacrifice with no immediate benefit to the person – but is made on the assumption that the contribution will increase the benefit to the whole group and, in time, to each individual.

I’m going to briefly describe a series of classic psychological experiments by behavioural economists that tried to replicate in a laboratory how this process of making a social contract works, and what destroys it. The results were revealing and we can consider what lessons we might draw from them for politics.

These behavioural experiments were done with multiple groups. In each group, each person is given the same amount of money or tokens, and in each round of the experiment, they can either keep the money for themselves or contribute money into a common pot that the experimenter will then double and distribute to each member of the group. So, there is an incentive to contribute to the common good. But, of course, to benefit everybody else also has to contribute. So, the whole process depends on trust and cooperation. Of course, that process is immensely more complex in a democracy, but the experiment is a reasonably good analogy for how the social contract works.

In any group, many people are initially willing to cooperate. In fact, there is some evidence that humans are wired not just to compete with each other but also to cooperate. But in any group, there is also a sizable minority of people who will only cooperate as long as they are assured that others also will, as well as some people who are tempted not to cooperate at all.

In the first round, most people did contribute substantially, giving between 40 – 60% of their money to the common pot. People made their contributions anonymously. But, of course, as soon as the pot was counted, it soon became clear to individuals that, in comparison to their own contribution, some others had contributed less or not contributed at all.

After a few rounds, some groups were given the option of imposing sanctions or punishment fines on those who had contributed less or not at all. Other groups were not given this option. And here’s what happened.

In the groups where people were not given the option of imposing sanctions, contributions dropped quickly and significantly in the subsequent rounds of the experiment. By the last round, three quarters of the group were contributing nothing and the remaining quarter next to nothing. Effectively, group cooperation had collapsed.

In contrast, now look at what happened in the groups where those who refused to contribute were sanctioned. In the subsequent rounds, everybody contributed substantially more, and the level of group cooperation shot up and stayed up.

In fact, people contributed between two and four times more than in the non -sanction groups. Even those who had initially not cooperated increased their contribution by between 50-60%. And, over time, average contributions of between 50- 95% were maintained. Moreover, when the group was given the chance to agree on a common standard, the group contribution reached almost 100%.

There are two lessons to be learned about human behaviour from these and many other similar experiments. First, people are generally willing to cooperate in a social contract and can achieve very high, stable cooperation if they believe they are operating in a fair system. The more they are engaged in constructing the rules of fairness, the more cooperative they become.

Second, people will not passively accept a situation where others are not cooperating or are contributing very little to the group, while continuing to reap the benefits. Unfairness rankles deeply with people. Nobody wants to be a sucker.

In the experiments, when the participants were asked how they feel about those who refuse to contribute, they expressed strong anger (6 out of 7 on an anger scale). Understandably, those who contributed a lot expressed the most anger, but even those who had contributed relatively little were also pretty angry. Nobody likes someone who is getting a free ride from the contributions of others.

Politicians should carefully consider these two lessons. Fairness and sanctions are key to securing high levels of social cooperation. And it is very unlikely that the 65% of Irish people who paid their water charges will passively accept being treated unfairly. And, like the people in the experiments, they are likely to react angrily.

As they see it, they obeyed the law and paid their water charges – among them people who may have disagreed with the principle of water charges, or were dismayed by how the government handled the whole issue. Whatever the future of water charges, they will expect justice and fairness with regard to the legacy issues of payment. If that does not happen, the consequences for public trust would be very serious indeed.

Reviewing his own and the other research in this area, Nobel Laureate, psychologist Daniel Kahneman, cautioned people against imposing losses on others that are perceived to be unfair, particularly if the victims are in a position to retaliate. And voters are. And he points out that even those who themselves do not incur any losses, but who see other people being treated unfairly, will often join in the punishment. So Irish politicians should not expect that those who did not pay their water charges, and got away with it, will be rushing to support them.

One further finding from all this research is that people are more than willing to sanction those who do not cooperate in a group, even when it brings no personal benefit to them, or actually costs them something. So if they are not doing it to further their own interests, why are they doing it?

The motivation appears to be altruistic – to protect other people against the unfairness that cannot just hurt them, but that can also destroy group solidarity. The way the human brain works helps to maintain that motivation. If you look at MRIs of people’s brains as they are engaged in punishing those who have behaved unfairly to others, you see increased activity in the pleasure centre of the brain. It appears our brain is wired in such a way that maintaining social order and the rules of fairness is its own reward.

People are motivated to create good societies for all kinds of positive and altruistic reasons. But to quote Kahneman: ‘Altruistic punishment could be the glue that holds societies together.’

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