Franklin’s Gambit and political decision making

John Kay has written an excellent article on decision making in business and politics. His main point, which he refers to as Franklin’s Gambit, is that, even when we appear to follow a rational process for making a decision, we are often looking merely to justify a decision we have made already.

A typical rational decision-making process would be:

1. Scope problem
2. Decide options for solving problem
3. Decide evaluation criteria and relative weightings of these criteria
4. Establish facts
5. Evaluate options based on facts, criteria and weightings
6. Make decision.

In fact, what can often happen is:

1. Scope problem
2. Make decision
3. Decide options for solving problem
4. Establish facts
5. Decide evaluation criteria and weightings which support decision made in step 2
6. Evaluate options based on facts, criteria and weightings
7. Confirm decision made in step 2.

In particular, the weightings of evaluation criteria are always subjective, so they can be chosen, or adjusted after the fact, to produce any desired outcome.

The Civil Service prides itself in its neutrality, and I have worked with many Civil Servants with impeccable ethics. They produce rational reports to support government decisions. Nevertheless, the conclusions of these reports almost invariably support the ideology of the government of the day, and, when the government changes, the conclusions change as well.

In business decision making, reports have an uncanny ability to reflect the views of the Chief Executive and other senior managers. On-message reports can result in promotion. Off-message reports can end careers.

In personal decision making, we often interpret new facts as confirmation of an existing bias. This extends from major decisions through to the trivial. For example,

• When we cast a vote in an important election, we may choose the candidate with the same background or ideology as ourselves irrespective of the merits of the debate during the election campaign. Alternatively, we persuade ourselves that the candidate who offers us the biggest cut in taxes, or increase in benefits, or the ability to buy our council house at a knock-down price, has the best policies for the broader community
• When a player from our favourite football team dives in the penalty area, we see an obvious penalty. However, when a player from an opposing team dives in the same situation, we see a cheat.

We exhibit this type of behaviour in making even routine decisions, so what happens when we have to make an important decision relating to a complex system which we don’t fully understand, such as the climate or the economy?

A 2011 report (pdf) shows that there is a strong correlation between views on climate change and political ideology. If significant future man-made climate change could be proven beyond doubt, we might require expensive new government interventions and many new regulations on private sector businesses. Of course, it is not possible to prove, beyond doubt, the extent to which the climate will change over the next 50 or 100 years. Neither is it possible to prove, beyond doubt, the impact of specific changes in human behaviour. As a result, people on the right of politics, who don’t like the political implications, are mostly sceptical of climate change, while people on the left, who are more comfortable with the implications, tend to be believers.

Correspondingly, in economics, politicians on the right have decided that the solution to the current economic crisis is for government to spend less, while politicians on the left have decided that the solution is for government to spend more. Despite the fact that economists provide conflicting advice on both the causes of, and solutions to, the crisis, the political left and right agree on two things:

• The correct policies are clear and beyond doubt
• The correct policies are the ones which are consistent with their existing ideological beliefs.

The most interesting aspect of this is that there are at least two conflicting aspects of any solution to the economic crisis: the need to create jobs and the need to reduce debt. Policies to create jobs include increasing government spending to provide a stimulus to the economy, and reducing taxes to encourage entrepreneurs and to stimulate demand. Policies to reduce debt include decreasing government spending and increasing taxes. The policies required to solve one of these problems are the opposite of those required to solve the other. Solving both problems at the same time is anything but clear and beyond doubt.

As a result, both left and right justify their policies mostly by pointing out the flaws in their opponents’ policies:

• The right says that the left prioritises jobs over debt. Increasing government spending in the hope of creating jobs will increase the debt further. This will lead to disaster. Look at Greece!
• The left says that the right prioritises debt over jobs. Reducing government spending in the hope of reducing the debt will increase unemployment further. This will increase the level of unemployment benefit payments, so might not even reduce the debt (or the annual deficit). Austerity leads to more austerity!

Both sides argue convincingly that their opponents’ policies won’t work, so their own policies are the best ones. This is false logic. It doesn’t occur to either ideological wing that they may both be correct in assessing that their opponents’ policies won’t work, and that we may be facing a Sophie’s Choice where there are no good outcomes.

Richard Feynman would point out that a search for the truth, in the face of complex systems which we don’t fully understand, should involve both humility and doubt. These qualities appear to be entirely absent in our politicians and their ideologies.