Saturday, May 18, 2024

OPINION AND ANALYSIS | 05-04-2024 10:00

Kahneman and Milei

Israeli-US psychologist and Nobel Prize winner Daniel Kahneman has shown that people make decisions in contexts of uncertainty, based on feelings of pleasure and pain, interest and boredom, joy and suffering, satisfaction and dissatisfaction. The communication of an election campaign focuses on promises, but people judge governments by hard facts.

Last week I was able to speak to leaders from different political sectors in Argentina, many of them from the opposition. What would describe their attitude in the face of Javier Milei’s Government? Bewilderment. There is no ‘coup’ attitude – even those who reject their ideas would like him to finish his term of office. But they all wonder, how much longer can people bear this brutal economic contraction and the environment of instability and hopelessness currently being experienced?

Normally, I try to use numbers to get closer to reality by overcoming prejudices. Prices are out of control, compared with those of other countries where I live. The medication package I buy daily costs US$775 in Argentina, US$323 in Ecuador, and US$221 in Mexico. Income is also different in all three countries: the minimum wage in Ecuador is US$460, US$450 in Mexico, and US$202 in Argentina. Specifically, Argentines have the same salaries as the poorest countries in the world – and the same product prices as those of the richest.

I remember that phrase by master US political consultant Joseph Napolitan: “The most sensitive place in a citizen’s body is his pocket.” How much more will Argentines take in this situation? What can the government do for people, before they react against it?

In no country in the Americas are economists given so much political stardom as in Argentina. There is also no other nation with such serious economic problems, with the exception of the military dictatorship in Venezuela. There is no other place where candidates are demanded to name their economy ministers before the election and to display economic programmes, which nobody reads. The authors of sensible programmes lose elections, which are won by those who know how to communicate feelings, imagery and mobilise voters. 

In politics, it matters little what the candidate says – what they communicate with their body language, attitude and memes is more important. The economy is even more subjective. Daniel Kahneman, a winner of the Nobel Prize for Economics in 2002, was an Israeli-US psychologist who never studied economics. A psychology professor at Princeton, he developed studies about the psychology of judgement, decision-making and economic behaviour, within a behavioural paradigm.

Rather than equations, Kahneman analysed how our brains work and how the attitudes we adopt from economic events are generated. After reading his work, I understood why I have such a mess at my home, full of things I bought because they seemed like a bargain, and also why most of humanity lived in poverty, assuming they were in a proletarian heaven, until 1990.

Kahneman explained, through prospect theory, how individuals make decisions in environments of uncertainty, straying from some basic tenets of the Theory of Probability. His theory was classified as hedonic psychology, which according to him, “is the study of what describes the pleasure or displeasure of an experience and life. They are feelings of pleasure and pain, interest and boredom, joy and suffering, satisfaction and dissatisfaction. It studies the entire range of circumstances causing suffering and enjoyment, from the biological to the social.” The author died last month, at 90 years old, during this time when the Third Industrial Revolution installed the search for pleasure as the north of human activity.

In the book we are preparing (La nueva comunicación política argentina, de Mauricio Macri a Javier Milei, or “The new Argentine political communication, from Mauricio Macri to Javier Milei”), we say that in election campaigns boring people are banned. In their old age, a sector of the PRO tried to hold rallies without music, joy, movement, trying to rescue the old values of work, saving and sacrifice, and lost an election they had practically won. It gave ground for Milei to become the head of a new phenomenon, where the candidate sang, danced and expressed himself spontaneously, breaking the mould of traditional society. It caused a whirlwind which raised the bar and replaced balloons with a chainsaw.

In the West, most people want change. They mock old values, including the recent progressive ones, dead almost at birth. Their expiration does not mean that people want to go back to the past, but that they need a change that is more radical in the change itself. The stork is not coming back, in vitro children are arriving.

A recent survey by Universidad de San Andrés states that 51 percent still have a good perception of Milei. The opinion regarding his image, both positive and negative, divides the population equally, but it has only been four months and that kind of opinion is volatile.  Alberto Fernández, Gabriel Boric, Pedro Castillo, Guillermo Lasso, Gustavo Petro, they had by that time a better opinion polling rating than Milei. But after a year, they fell apart. For Milei to have a positive image after three months in office is good, but it does not mean much.

The variables which help diagnose what can happen with the government are others, more tougher ones that to do with attitudes, not just with opinions. They are related to perceptions about the feelings of pleasure and pain, interest and boredom, joy and suffering, satisfaction and dissatisfaction, as mentioned by Kahneman in his theory. The methodology to study this subject is more complex than the programmes to make surveys, which can be bought online for US$100.

The survey found that 70 percent of Argentines claim they are dissatisfied with the way things have been going on in the country. Many of them do not demonstrate in favour or against the government because, for now, they are giving it time to defeat inflation. However, this problem is losing force in the hearts of citizens: it was the main one for 60 percent up until a month ago, now it is for 47 percent. It is being displaced by the feeling that income and unemployment are falling, and by the ongoing avalanche of bad news. If the government does not do something to reverse this trend, it may explode.

Most people know many changes are essential. A criminal legislation affecting minors, by declaring them immune from prosecution and thus providing hitmen and drug-dealers thousands of little soldiers, cannot remain in force. There cannot still be a labour law delivering unions to dinosaurs from the last century, allowing them to hunt for slaves by using mandatory affiliation and manipulating health insurance schemes. The state cannot maintain hundreds of thousands of party activists, who only use their bureaucratic position for activism. 

In these and other subjects there is a wide consensus, including Peronist, Radical, Jurassic PRO, Modern PRO leaders, as well as from a wide sector of society, artists, scientists, journalists, professionals, entrepreneurs and youths who want their country to progress. Milei’s big challenge is having the ability to separate the situation from substance. While laws about specific issues are still being discussed, a national agreement ought to be possible, not just to get a few votes in Congress, but to lay the foundations for deep change in the country.

It is too light to believe that there can be a long-lasting transformation in Argentina by adding the few libertarian legislators with some which can be bought for the occasion. Just as it was absurd for Peronism to claim, for decades, that a non-Peronist president could not finish their term, it is absurd to think that change can be brought without listening to Peronists. Sergio Massa was three points away from winning the election in the first round. Milei got 30 percent when his opponent asked the voters to choose whether to continue with transport fares then as they were, or to pay for new ones set by a new government. Two non-Peronist presidents have been elected this century, Macri and Milei, in both cases in the second round. All Peronist presidents won in a single round, sometimes in a landslide, like Cristina in 2011.

For change to be long-lasting, there must be great agreement about the bigger lines of development in the country, accounting for over 90 percent of the electorate, which I hope even includes the so-called “snowflakes” and Jones Huala’s Mapuche activists. Only that will bring safety for foreign investments to arrive.

It would be good for Milei’s discourse to not only be negative. On the campaign trail, he was able to communicate such a powerful illusion that it has carried support over for these first few months. He did not offer to batter the common folk, he said that politicians and the “caste” would pay for the adjustment – many applauded by thinking that the new government would take other people’s property, without affecting their own privileges.

The message of a government cannot only be negative: it cannot only say ‘I am cutting back on pensions, freezing salaries, leaving thousands of public employees unemployed, choking culture, concerts, films, I am closing public entities which were part of the previous government’s electoral apparatus.’ Even if all of that may be necessary, sowing some seeds are too, as is taking care of life, creating occupations. Not just destroying the past, but building a desirable future.

I am a nomad. I read the press and watch television in different countries. What little is published about Argentina is negative and false. It is a known fact that there were violent protests against the government, that all Argentine politicians claim that the others are rats, corrupt or crazy. Nobody knows how long the Government will last or what may follow it. Will there be someone who may want to invest in such a country?

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Jaime Duran Barba

Jaime Duran Barba


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