On information asymmetry and the social good
Justice Antonin Scalia’s death at a West Texas resort last Saturday jolted the American political landscape. Within hours, however, virtually all relevant actors had retreated to easily predictable stances. Republicans – especially those running for president – adamantly refused to consider any replacement nominated by President Barack Obama, while Democrats equally vociferously argued that leaving a Supreme Court seat vacant for a year would be a gross violation of constitutional obligations.
The relative merits of the opposing arguments are both well-known and well-described in dozens of outlets, so I won’t get into them here. Of more interest to me personally is the fact that the two parties’ positions are so immediately transparent and predictable. As Jonathan Chait notes, this was not always the case:
The consistent pattern in Washington over the last two decades is that any social norms that stand between one of the parties and power inevitably falls by the wayside…Senators used to furnish what were viewed as qualified mainstream appointees with wide, bipartisan support. Increasingly, Senators vote against any justice nominated by a president of the opposing party. The notion that the Senate needs to let the president appoint somebody to a vacant Supreme Court seat is nothing but a social norm, and social norms in modern politics have a short lifespan.
This is a particularly insightful observation. In the polarized milieu of 2016 politics, it’s almost hard to believe that such an antiquated concept as ‘gentlemen’s agreements’ or ‘social norms’ ever existed in the unruly halls of Congress. But they very much did.
Chait doesn’t spend any time investigating why these gentler times disappeared, but I have a theory: I think it has a lot to do with ideological sorting. Specifically, Republicans and Democrats today are each far more politically cohesive ideological units than they have ever been before. And this efficiency has the effect of removing much uncertainty from political calculations.
This begs yet a further question, which is: well, what is causing the sorting? How did we move from congenial, smoke-filled corridors on Capitol Hill to the partisan trench warfare in vogue today?
There are, of course, many contributors – from gerrymandering to mid-twentieth century racial politics to corporate funding of elections and a million things besides.
I would argue, however, that there is an additional pair of factors causing the sorting, and thus indirectly precipitating the near-constant deadlock that we now see as a routine feature of American political life: 1) the digital proliferation of freely accessible information on voting records, speeches and interviews, donor data, and related material, and 2) the existence of determined political actors incentivized to disseminate that information to the most interested recipients.
Put more broadly, information asymmetry is slowly disappearing from many facets of modern life. And the implications of this transformation extend well beyond politics.
Back in the halcyon days of yore (say, thirty years ago), you likely had very little idea of your hometown senator’s exhaustive voting record. A politically engaged citizen may have read local newspaper articles about her senator’s votes on national hot-button issues. But column constraints, budgetary limitations, and a lack of targeted reader interest data meant the local press was unlikely to expend much time reporting on more than a few dozen bills per year at most. This left large swathes of elected officials’ activity in the dark.
Among other things, this state of affairs made compromise a lot easier: without intensive public attention being paid to every aspect of a Congressman’s record, informal deals were worked out between members of opposing parties. A vote on one party’s pet issue could be exchanged for a vote of similar importance to the other party. This carried risks but, on many occasions, positions at odds with party orthodoxy could be safely embraced without fear of electoral consequences. And this ideological flexibility was part of the oil that kept the engine of national government operating smoothly.
Like everything else it touched, the Internet transformed this process in profound ways. First, it became trivially easy to catalogue every vote taken by every member of Congress and make it easily searchable for anyone to use. Campaign donation histories, legislators’ speech and interview transcripts, and a host of related data suddenly saw the light of day in the era of Google. This is what I mentioned in the first factor above: the digital proliferation of freely accessible information. (I know whereof I speak: I’ve personally been involved in developing these types of tools.)
In parallel, a variety of entities committed themselves to ferreting insights from these rich digital datasets to the citizens most likely to care about them. These entities – the muckraking press, late-night comedians on the hunt for political hypocrisy, opposition researchers, lobbyists and interest groups, and passionate citizens – collectively comprise my second factor: determined political actors incentivized to disseminate information to interested recipients.
So what effect did these changes have? After all, it’s not as if the Internet eliminated most voters’ chronic ignorance of basic policy positions. And yet newly accessible information, transmitted by interested participants to specially targeted audiences, didn’t need to reach everyone. It only needed to reach the right people: those whose mobilization had the potential to affect the political outcome in a specific way.
MoveOn.org, Swift Boat Veterans for Truth, Media Matters, The Heritage Foundation, and hundreds of organizations like them collectively enforce an artificial uniformity on national politicians. They accomplish this by blasting even the most trivial politically advantageous news at high volume in sensationalist terms, simultaneously feeding and reacting to a bottomless reserve of public anger.
Relatively obscure Congressional representatives and senators from rural districts no longer principally fear the editorial board of their hometown newspaper: they now worry more about the specter of a gaffe going viral nationally, perhaps sparking widespread ridicule and, most nightmarishly, the prospect of floods of cash flowing into opponents’ campaign coffers. And thanks to ever more sophisticated data science techniques, those opponents know exactly which voters are most susceptible to persuasive marketing.
And so we wallow in bitter political stalemate, each side wedded firmly to ever more maximalist positions in order to prove fealty to the cause and outflank agitator interest groups. But if my theory holds water, the problem is in fact much larger than politics: countless industries and spheres are subject to the same information-induced pressures. Remember the concept of ‘security through obscurity’? In most cases it no longer applies: obscurity can’t be assumed to exist in a world in which, for example, passwords can be searched instantly by thousands of users on GitHub.
Or consider what it means for a record to be ‘public.’ For most of modern history, ‘public record’ was a misnomer: finding a specific case file, for example, usually meant traipsing down to the local courthouse, rifling through cabinets or drawers, manually copying down material, and so on. Today, the public has yet to fully grapple with the reality of how accessible a public record truly is.
Indeed, even a product as evergreen as insurance is not immune to the dissolution of information asymmetry. Insurance is, almost by definition, based on an informational imbalance: the insurer can’t possibly be certain about every client’s exact risk. So it forms pools of clients and charges everyone within each pool a similar or identical fee that will make the insurer profitable overall, even if it loses money on individual risky clients.
But today, with auto insurers incentivizing drivers to install data-collection hardware in order to reduce costs and health insurers attempting to examine risk factors in order to minimize their own exposure, information asymmetry is trending downward. In plain terms, this means end users, not large insurance firms, are likely to bear increasing amounts of risk in the form of individually varying fees.
Is all this information asymmetry reduction good for society? In politics it certainly seems not to be. We’ll eventually find out whether the status quo is a permanent state or whether, as I hope, the general public grows tired of hallucinatory demagoguery and rediscovers the joys of productive compromise. (Hint, hint: one party never really fell out of love with it.)
More often than ever before, society finds itself grappling with an entirely new economy of information. Demand for information has always been high, but the explosion of supply has overturned decades (if not longer) of assumptions about politics, insurance, and much else besides.
Will we successfully come to terms with this realignment? It’s too soon to tell: the future, unlike so much else, still retains an enormous informational advantage over the present.