We have hit this idea in passing a few times in the past (particularly when discussing the Ponzi threshold), but I don't believe we've ever done a post on it. While there's nothing especially radical about the idea (it shows up in discussions of risk fairly frequently), it is different enough to require a conscious shift in thinking and, under certain circumstances, it can have radically different implications.
Most of the time, we tend to think of rational behavior in terms of optimizing expected values, but it is sometimes useful to think in terms of maximizing the probability of being above or below a certain threshold. Consider the somewhat overly dramatic example of a man told that he will be killed by a loan shark if he doesn't have $5000 by the end of the day. In this case, putting all of his money on a long shot at the track might well be his most rational option.
You can almost certainly think of less extreme cases where you have used the same approach, trying to figure out the best way to ensure you had at least a certain amount of money in your checking account or had set aside enough for a mortgage payment.
Often, these two ways of thinking about rational behavior are interchangeable, but not always. Our degenerate gambler is one example, and I've previously argued that overvalued companies like Uber or Netflix are another, the one I've been thinking about a lot recently is the Republican Party and its relationship with Trump.
Without going into too much detail (these are subjects for future posts), one of the three or four major components of the conservative movement's strategy was a social engineering experiment designed to create a loyal and highly motivated base. The initiative worked fairly well for a while, but with the rise of the tea party and then the Trump wing, the leaders of the movement lost control of the faction they had created. (Have we done a post positing the innate instability of the Straussian model and other systems based on disinformation? I've lost track.)
In 2016, the Republican Party had put itself in the strange position of having what should have been their most reliable core voters fanatically loyal to someone completely indifferent to the interests of the party, someone who was capable of and temperamentally inclined to bringing the whole damn building down it forced out. Since then, I would argue that the best way of understanding the choices of those Republicans not deep in the cult of personality is to think of them optimizing against a shifting threshold.
Trump's 2016 victory was only possible because a number of things lined up exactly right, many of which were dependent on the complacency of Democratic voters, the press, and the political establishment. Repeating this victory in 2020 without the advantage of surprise would require Trump to have exceeded expectations and started to win over non-supporters. Even early in 2017, this seemed unlikely, so most establishment Republicans started optimizing for a soft landing, hoping to hold the house in 2018 while minimizing the damage from 2020. They did everything they could to delay investigations into Trump scandals, attempted to surround him with "grown-ups," and presented a unified front while taking advantage of what was likely to be there last time at the trough for a while.
Even shortly before the midterms, it became apparent that a soft landing was unlikely and the threshold shifted to hard landing. The idea of expanding on the Trump base was largely abandoned as were any attempts to restrain the president. The objective now was to maintain enough of a foundation to rebuild up on after things collapsed.
With recent events, particularly the shutdown, the threshold shifted again to party viability. Arguably the primary stated objective of the conservative movement has always been finding a way to maintain control in a democracy while promoting unpopular positions. This inevitably results in running on thinner and thinner margins. The current configuration of the movement has to make every vote count. This gives any significant faction of the base the power to cost the party any or all elections for the foreseeable future.
It is not at all clear how the GOP would fill the hole left by a defection of the anti-immigrant wing or of those voters who are personally committed to Trump regardless of policy. Having these two groups suddenly and unexpectedly at odds with each other (they had long appeared inseparable) is tremendously worrisome for Republicans, but even a unified base can't compensate for sufficiently unpopular policies. Another shutdown or the declaration of a state of emergency both appear to have the potential to damage the party's prospects not just in 2020 but in the following midterms and perhaps even 2024.
So far, the changes in optimal strategy associated with the shifting thresholds have been fairly subtle, but if the threshold drops below party viability, things get very different very quickly. We could and probably should frame this in terms of stag hunts and Nash equilibria but you don't need to know anything about game theory to understand that when a substantial number of people in and around the Republican Party establishment stop acting under the assumption that there will continue to be a Republican Party, then almost every other assumption we make about the way the party functions goes out the window.
Just to be clear, I'm not making predictions about what the chaos will look like; I'm saying you can't make predictions about it. A year from now we are likely to be in completely uncharted water and any pundit or analyst who makes confident data-based pronouncements about what will or won't happen is likely to lose a great deal of credibility.
On Tuesday, a California superior-court judge ruled that the state’s teacher tenure system discriminates against kids from low-income families. Based on testimony that one to three percent of California teachers are likely “grossly ineffective”—thousands of people, who mostly teach at low-income schools—he reasoned that current tenure policies “impose a disproportionate burden on poor and minority students.” The ruling, in Vergara v. California, has the potential to overturn five state laws governing how long it takes for a teacher to earn tenure; the legal maneuvers necessary to remove a tenured teacher; and which teachers are laid off first in the event of budget cuts or school closings.— Dana Goldstein writing for the Atlantic.
The Vergara vs. California decision has garnered a great deal of media attention. It has been covered as an education story, a labor story, a legal story, but the connection to another highly topical subject has been largely overlooked: Vergara vs. California is an income-inequality story.
Put another way, the decision, the course of the trial, even the very existence of the case were largely the result of actions of a small set of very wealthy men. What’s more, this is true for almost every major education reform initiative from Common Core to L.A.’s billion-dollar iPad program to endless charter school pushes. Though the list of names does vary somewhat from story to story, the same figures keep popping up. For instance, it is rare to find a major reform initiative that does not involve someone who has worked for or received support from Eli Broad or the Bill and Melinda Gates Foundation.
Perhaps more importantly, even when the faces are new, the résumés are remarkably similar: extremely wealthy present or former CEOs, usually male and from the tech industry, with a proclivity for MBA-style rhetoric and approaches. Given the importance of the CEO demographic, it is not surprising that arguably the most powerful figures in the education reform movements of the United States and Britain (David Coleman and Michael Barber, respectively) both worked at McKinsey and Co., the definitive management consulting firm. (Definitive does not mean non-controversial. Barry Ritholtz has a good overview, and you can see my more education-centered take here and here.
The pair of education advocates [Gene Wilhoit, and the previously mentioned David Coleman] had a big idea, a new approach to transform every public-school classroom in America. By early 2008, many of the nation’s top politicians and education leaders had lined up in support.— from “How Bill Gates pulled off the swift Common Core revolution” by The Post’s Lyndsey Layton.
But that wasn’t enough. The duo needed money —tens of millions of dollars, at least — and they needed a champion who could overcome the politics that had thwarted every previous attempt to institute national standards.
So they turned to the richest man in the world.
Of course, presence does not equate to influence, and influence is not necessarily bad. In order to get to a discussion of social good, we need to start by asking:
Does this group have a disproportionate influence over the current direction of education?
And, if so, is this disproportionate influence in some way undemocratic?
Consider the cases of Common Core and Vergara vs. California. With the former, it is important to note how unlikely it would have been for this program to get off the ground without Bill Gates. Both Coleman and Common Core have always been controversial. Coleman came into the education field strictly on the weight of his work with McKinsey, having no experience either as a teacher or a researcher. As for Common Core, almost immediately after gaining national attention, the proposed standards were greeted with considerable opposition. Here’s popular EdWeek blogger Anthony Cody writing in July 2009:
Sixty individuals, ONE teacher among them, will write national education standards in the next five months, in a secret process that excludes effective input from students, parents or teachers.Along with the standards, a great deal of additional related material (curricular suggestions, sample lessons) were released, often to extremely negative reviews (including a particularly harsh reaction toward a scripted lesson that made the “odd” decision to teach the Gettysburg Address without referring to the Civil War).
Given the scale of Common Core, the speed of its adoption and, to put it mildly, its lack of grass-roots support, it is difficult to imagine that the initiative would be where it is today if not for Gates’s influence. By the same token, it is equally difficult to argue that competing ideas with more popular support but less influence behind them have gotten the same chance.
With Vergara, the difference is even starker, since it raises questions of equal access to the courts. Virtually every aspect of the case, from the founding of the organization Students Matter to the selection of plaintiffs to the quality of representation to the key witnesses to the research cited in the decision were influenced and, in some cases made possible, by a handful of large personal fortunes.
Students Matter was founded by David Welch, a Silicon Valley entrepreneur of considerable wealth and even more formidable connections. From the Mercury News:
And wealth has attracted more wealth — the Broad Foundation, a controversial education reform organization opposed by most teachers unions, and the Walton Family Foundation, started by Walmart founder Sam Walton, have donated to Students Matter. The nonprofit faced costs including a $1.1 million bill in 2012 from Gibson Dunn & Crutcher, the high-powered law firm that argued the court case.The selection of defendants appears to have been based on their willingness to challenge the statutes Welch et al. wanted overturned, not on the level of harm they suffered. There does not seem to be any evidence that any of the students had a tenured but grossly ineffective teacher. Four of the nine weren’t even attending schools that had tenure. From the defense’s post-trial brief:
Plaintiffs Monterroza and Martinez both attend charter schools that are not subject to the challenged statutes at all. Beatriz and Elizabeth Vergara both attend a “Pilot School” in LAUSD that is free to let teachers go at the end of the school year for any reason, including ineffectiveness.Actually, one of the “grossly ineffective teachers” had earlier been named teacher of the year (you can see an example of her work here).
In the trial itself, perhaps the most damning testimony came from Harvard professor Thomas Kane and LAUSD Superintendent John Deasy (previously best known for his disastrous iPad initiative). The quality of their testimony is outside of the scope of this conversation; what is relevant is that much of Kane’s research was funded by the Gates Foundation while Deasy is a former deputy director of the education division of the Gates Foundation and a graduate of Broad’s superintendent academy.
Common Core and Vergara are, of course, isolated instances, but they are both important and representative. In case after case, theories and approaches favored by a handful of very wealthy individuals received preferential treatment in the education debate. You cannot call that a democratic process.