Thursday, May 20, 2010

Book review: The Social Atom

Book review published in The Kathmandu Post

Bricks in the wall

There is a pattern to everything

Have you ever wondered why hundreds of thousands of people join protests and participate in riots? Or, why ordinary people plunge headlong into collective madness (ethnic cleansing, ethnocentric violence, and vandalism)? Also, why do some societies achieve results that others envy of (such as in 1991 Kerala became the world’s only 100 percent literate state)? Why human beings act in the way they do, i.e. they cooperate but at the same time fight with each other; they assume rationality but act based on pure instincts; and they adapt to different situations and imitate others.

To comprehend this range of confounding issues Mark Buchanan uses tools and insights from physics, economics and other social sciences in his book The Social Atom: Why the Rich Get Richer, Cheaters Get Caught, And Your Neighbor Usually Looks Like You. It is about what Buchanan calls “social physics”, which basically is social science along the lines of physics, i.e. trying to find mathematical regularities in social life. One of the core themes of the book is that there is a pattern to everything that happens in nature.

By viewing humans as “social atom”, Buchanan, a theoretical physicist and former editor of Nature and New Scientist, offers an enriching and stimulating discussion of events ranging from literacy campaigns in Kerala to sudden riots in the most unexpected regions of the world to natural segregation of societies along racial and ethnic lines to genocide in Rwanda.

The message directed at social scientists is simple: Understanding human behaviour might seem a daunting, complex task but, like in physics, if we go to the most simplest unit—treating each human being as atom, thus social atom—then it might not be as complex as it sounds. Complexity is rooted in simplicity.

He argues that by looking at patterns behind the origin and functioning of both usual and unusual events, social scientists can discover mathematical laws like the ones we find in physics. No wonder, the failure to look at patterns might have resulted in a lack of laws in economics and social sciences. This is not the case in pure sciences such as physics, chemistry and biology. By flatly assuming that people are self-interested and that they make rational decisions, the mainstream economists ignore the fact the human beings are a part of the nature and there is a pattern on how they learn, act and behave. In fact, human beings are not rational calculating machines, but biological pattern recognisers who are able learn from their mistakes.

He advises the mainstream economists to think of people as if they were atoms or molecules following simple rules in society. Failure to do this is clearly visible in economics: even the most sophisticated economic theory lacks the kind of understanding found in pure sciences. Humans are not rational calculators, but crafty gamblers. They are skilled at recognising patterns and adapting to changing world. Sadly, most of the economists have failed to recognise this simple behavioural pattern.

Interestingly, our collective behaviour follows mathematical patters of surprising precision. He argues that the most common one of them is power law. It emerges “naturally in systems that are decidedly not in equilibrium.”

The book is filled with enriching discussion about the occurrence of power law in the distribution of wealth and inequality, power and politics, class hatred, racial segregation, fads, fashion, riots, spontaneous outbreaks of goodwill and hatred within communities and financial markets.

There are three kinds of social atoms: (i) adaptive atom, (ii) imitating atom, and (iii) cooperative atom. Human beings are adaptive rule followers, not rational automations. The rationality assumption incorrectly presupposes that people do not learn, form hypotheses and tests, and change their decisions frequently.

People are fundamentally adaptive and their decision accords with reality, even if their choice might look irrational to economists. People have to make decisions in an uncertain and ever-changing setting of markets. Their decision, however irrational it may look like, comes from adaptive behaviour, i.e. they make mistakes, rectify their actions, and adapt to changing environment. It is not unusual that large movements in the market seem to take place in the absence of any big event, he argues.

In addition to being adaptive, we are also born imitators. Imitation does not generate any new information but it amplifies the consequences that a little bit of information can have. Coming back to the point of public protesting and rioting, it is by constant interaction and imitation that hundreds and thousands of protesters and rioters take on to the streets, irrespective of their awareness of the main causes of riots and strikes. This behaviour of social atoms is usually ignored by economists. Buchanan argues that what gets a riot going at the outset isn’t necessarily the same as what keeps it going or determines how big it eventually gets.

The decision of the first person to join riot might be his own but after 50 people start smashing things up, the decision for 51st to join the riot is completely different. It is not “nearly so hard to join in when everyone you know is doing it.” The imitative behaviour of Kerala resident in achieving high levels of education has made it one of the most literate states in the world.

Next comes the cooperative atom, who is an altruist defying the assumption of self-interested agents. Humans are not as self-interested and greedy as economic theorists assume. This has been well documented by game theorists and behavioural economists. The assumption of self-interested agents fails to account for selfless actions that millions of people undertake every day without any strategic hope of future reward. Many of us are “biologically predisposed to such altruistic acts.”

With a combination of adaptive, imitative and cooperative behaviours, human beings are equally skilled at making peace for the same reasons that they are skilled at making war. Even blind prejudice helps people to cooperate and participate in things that are usually not expected of them. This is why ethnocentric movements have large number of participants cooperating with each other even in the face of incomplete or manipulated information.

Repeated interactions between people of opposing ideals and values, and the imposition of effective social norms help to keep ethnocentrism at bay. May be this is what we need to defuse the tense crisis in Nepal right now!

The crux of the book is that social scientists need to view human beings as atoms and molecules following fairly simple rules, that there is a pattern to everything, and that even oversimplified models can go a long way “if social scientists can get right the few details that really matter.”

Perhaps economists need to pay more attention to realistic assumptions, simplify their models to reflect reality rather than to fit elegant mathematical models, and view human interactions as complex but having some pattern to it.

[Published in The Kathmandu Post, May 15, 2010, pp.7]