Yielding to temptation

An introduction to behavioural economics.

One human weakness that we are all familiar with is that we are forever making plans for the future that involve some kind of self-improvement, but later on we renege on these plans and yield to temptation, taking an "easy way out". For example, we plan on going for a run this evening, but then decide to lay back on the couch and watch TV instead; we may go to bed planning to rise at 6am, but when the alarm rings we rapidly hit the snooze button and end up oversleeping. On a more long-term basis, we plan to make regular savings for retirement, but then decide we should spend our money on new furniture for the living room, a new set of golf clubs, and so it goes on. In general we make plans to achieve a larger benefit later, but then change our minds and settle for a smaller benefit sooner.

For a long time, economists have abstracted from such complexities of human decision making. The standard model of economic rationality suggests that we should only change our minds if and when appropriate new information is received. But often the change of mind is not caused by new information. Why humans tend to behave in this way is still a subject of controversy. However, rather than continuing to regard them as an anomaly, economists have begun treating these variations in our behaviour more seriously. Under the label of behavioural economics, new approaches to the study of decision making have been emerging which are catching the imagination of politicians.

Saving for retirement for example is a serious problem for many. Much evidence from the UK and US suggests that a large proportion of people do not save sufficiently for retirement. Various measures that have become known as ‘nudge’ policies are being suggested to address this as an issue of public policy. Unlike traditional regulation by government, nudge policies do not seek to compel us to behave in certain ways, but change what is called the ‘choice architecture’ of the situation, providing incentives for us to act in certain ways. A common nudge policy is to change the default option in a choice situation. Thus, if employers’ pension plans require employees to opt in, there will be a tendency for many to go with the default of remaining outside the scheme. Evidence from the US suggests that the simple measure of reversing this option can substantially increase the number of employees contributing to retirement plans. Furthermore, options can be framed in a way to encourage greater contributions than employees might otherwise make. For example, if people are given 3 options in terms of size of contribution, say £100, £120, and £140 per month, many will choose the middle option. Simply changing the options to £160, £180, and £200 per month automatically increases people’s willingness to contribute, as once again people tend to go for the middle option.

The UK government has taken some of these findings of behavioural economists on board. The 2011 Pensions Act has established default enrollment options which will be implemented in the UK economy over the next six years. A Behavioural Insights Team attached to the Cabinet Office is exploring further applications of nudge policies in other areas such as eating habits or organ donation. However, their effectiveness remains controversial. Many doctors doubt that nudge policies are sufficient to encourage people to change their dietary or smoking habits, and believe that more radical intervention is necessary. Wider debates have focused on the merit and scope of the underlying 'benevolent paternalism' and its implied call for the large scale engineering of choice architectures across the economy. But this does not detract from the fact that the behavioural turn in economics is proving to have a lasting impact on public policy and is rapidly reshaping the economics curriculum taught at universities today.

Nick Wilkinson and Matthias Klaes are the authors of An Introduction to Behavioral Economics, 2nd ed, (Palgrave Macmillan) which will be published in April. A companion blog to the book can be found at http://economicbehavior.wordpress.com/

Decisions, decisions, Getty images.

Nick Wilkinson and Matthias Klaes are the authors of An Introduction to Behavioral Economics, 2nd ed, (Palgrave Macmillan) which will be published in April. A companion blog to the book can be found at http://economicbehavior.wordpress.com/.

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One Day Without Us reveals the spectre of Britain without immigration

Imagine a country without its NHS workers, its artists and even its consumers. That's why immigrants are striking today. 

What’s the best way of making yourself heard in politics? Protesting in the street, or contacting the media? Writing to politicians? A badge?

One option, of course, is to walk out - and give people a chance to recognise what they’d be missing if you weren’t there. In the labour movement, that’s long been an option – a last-case option, but an option nevertheless – when your contribution isn't being recognised.

A strike is a tit-for-tat negotiation and a warning shot. “I’ll work properly when you employ me properly”, it says, but simultaneously: “Here’s what you’d lose if I stopped”. Done right, the worker’s absence can shift the power balance in their favour.

Normally, people strike according to their role, in pursuit of certain conditions – the tube strikes, or last year’s teacher's strike.

Yet there is also a long and rich history of walk-outs whose terms are broader and boundaries hazier. One of the most famous is surely the 1975 Women's Strike, in Iceland, during which 90 per cent of the country's women refused to participate in either paid or unpaid work.

In 2016, the formula was repeated in Poland, where women went on strike to protest against a draconian change being proposed to the country's already-strict abortion laws. (It worked.)

Immigrant strikes, too, have a history. In 2006, for instance, a coalition of Los Angeles Catholic groups, unions and immigration reform groups proposed a boycott in opposition to a bill which, among other things, called for new border security fences to be built between America and Mexico. (Ahem.)

The action grew to become a national event, and on May 1, the “Great American Boycott” took place, with immigrants from Latin America and elsewhere leaving work, skipping school and refusing to buy or sell goods.

Now, with Donald Trump in the White House and Brexit looming, some have decided it’s time for another strike. Enter “One Day Without Us”.

Today, immigrants here in Britain will strike not for pay conditions or holiday allowances, but for basic recognition and respect. Across the country, businesses will close and immigrants will leave work, many of them to take place in alternative actions like rallies or letter-writing campaigns.

The name of the protest pulls no punches. This, it says, is what it would be like if we all went away. (Subtext: “like some of you want”.)

Because – and let’s be honest here – it’d be bad. In hospital this summer, I was treated by migrants. After 24 hours in NHS, I took a count, and found that only about one in five of the staff who had treated me were identifiably English. Around 4.6 per cent of NHS staff nationally are from the EU, including 9 per cent of doctors. Immigrants clean buildings, make our food, and provide a whole host of other vital services.

One Day Without Us, then, could do Britain a huge favour - it provides us with a quick preview function before anyone ups and leaves for good, taking the heart of our health service, or our food supplies, with them.

In recognition of this, some businesses are actively giving their workers the day off. One 36-year-old owner of a support services company, for instance, is giving her staff a paid holiday.

“Not all my colleagues are taking up the offer not to come in”, she explained. “Some, both British and foreign-born, would prefer to work. That’s fine, I wanted to give colleagues the freedom to choose.

 “It will cause some inconvenience and I’ve had to explain to clients why we aren’t offering all our services for one day, but I feel doing this is the only way to show how much this country relies on migrants. I may be a businesswoman, but I’m a human being first, and it hurts my heart to see how foreign-born colleagues are being treated by some people in the current political climate."

The woman, whose staff is 65 per cent foreign born, has asked her company not to be identified. She’s heard her staff being abused for speaking Polish.

Of course, not everyone is able to walk out of work. I write this from Chicago, Illinois, where last week activists participated in an American predecessor to One Day Without Us called “Day Without Immigrants”. Type “Day Without Immigrants" into Google followed by the word "Chicago" and you will find reports of restaurants closing down and citizens marching together through the city.

But search for just "Day Without Immigrants", and the top stories are all about participants being fired.

One Day Without Us, then, encourages any form of engagement. From human chains to sessions during which participants can write to their MP, these events allow immigrants, and supporters, to make themselves known across the country.

Businesses and museums, too, are involved. The Tate, for instance, is offering free tours showing visitors artworks created or influenced by migrants, showing Londoners which of the paintings that they’ve seen a dozen times only exist because of immigration.

Because paintings, like people, come from everywhere, whether or not you remember. Britain is a mongrel country, and so its art and culture are as mongrel as its workforce: a persistent thread through the country’s history.

We risk a lot forgetting this. At its best, assimilation provides a way of integrating without forgetting one’s own unique identity. In a world where immigrants risk threats or violence, however, invisibility can be the best option. For some, it is better not to be recognized as an immigrant than be abused as one.

Those of us who don’t risk threats have a duty to recognise this. I dislike the glibness of “we are all migrants” – maybe, technically, but we’re not all getting slurs shouted at us in the high street, are we? Still, I also don’t like anyone forgetting the fact that their existence, in all probably, is contingent on someone once being given clemency in a place that was their own. The movement of people is woven into the fabric of society.

Of course, it is impossible to say how successful One Day Without Us will be, or how many people’s lives will be directly affected. But I hope that, even as a gesture, it works: that people think of what would be missing from their lives without immigration.

We ignore it at our peril.

You can view all the One Day Without Us events on the organisers’ website, or contribute to a fund to support businesses which are closing for the day here.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland