Copycats and Contrarians
Page 14
Beating the crowd links to reputation. Reputation is not unimportant to mavericks, but their reputation-building strategies are distinctive. As we saw in chapter 1, copycats’ reputations are less vulnerable because they have ensured that when they are wrong, lots of other copycats are wrong too and in the same way. Mavericks take a different perspective on reputation. They prioritise their contrarian reputations so that, when they are right when others are wrong, they can reap large rewards. They build their reputations around being different rather than similar. Just as reputation can be protected by copying others’ actions, so it can be enhanced when a person develops a new, original idea. Inventor of Post-it notes Alan Amron demonstrates the importance of reputation to trailblazers. In his battles with 3M over the provenance of his investment, Amron was concerned as much about 3M’s claims that they had invented Post-its as he was about his $400 million financial settlement: ‘I just want them to admit that I am the inventor and that they will stop saying that they are the inventor . . . Every single day that they keep claiming they invented it damages my reputation and defames me.’ Amron lives in a social world, and so being recognised as the product’s inventor was essential to his reputation and pride.12
Expected utility theory can explain only some of these links between anti-herding and risk-taking. Beyond standard economics, behavioural economists and economic psychologists have developed critiques of expected utility theory – perhaps most famously the psychologists Daniel Kahneman and Amos Tversky, as a background to their alternative theory of risk, prospect theory.13 Kahneman and Tversky conducted some experiments that identified shifting and unstable attitudes towards risk, contrary to expected utility theory.14 Expected utility theorists assume that people’s risk preferences are stable – if someone is risk-averse then they are risk-averse, and simply reframing the choice will not change their minds. Against this, Kahneman and Tversky provided evidence that our preferences for risk-taking are determined by the way in which choices are framed, particularly in their concept of loss aversion. For an expected utility theorist, if someone is asked to take a bet on winning $10 versus winning nothing then they will make the same choice if they’re asked to take a bet on losing nothing versus losing $10, because in either case, the difference between winning and losing is $10. Kahneman and Tversky’s experiments suggested something different. Our risk preferences shift depending on whether we are deciding about gains or losses. We care much more about losing $10 than we care about winning $10. As Kahneman and Tversky succinctly describe it, for most of us ‘losses loom larger than gains’.15 How does this help us to understand the differences between copycats and contrarians? Copycats may be more concerned about what they might lose if they rebel than about the prospect of risk-taking. As we have seen in previous chapters, with self-interested herding each individual can collect information, find safety and power, safeguard their reputation and avoid the costs of not conforming: social exclusion and ostracism. Copycats worry about all that they might lose from rebellion. Contrarians may be less concerned about the losses they incur. They might actively invite being set apart from the crowd, or may be happier taking risks by deviating from social norms and hierarchies. This phenomenon is more consistent with Kahneman and Tversky’s psychological analyses of risk than with economists’ expected utility theory.16
Other biases may be driven by social comparisons, triggering contrarian responses. A US field experiment conducted by a group of economists from Harvard and Yale tested the impact of social comparisons on employees’ contributions to their retirement savings. They gave employees information about the retirement-savings decisions of their peers. For the low-income employees, the outcome was unexpected: providing information about some of their peers’ ample retirement savings was associated with lower retirement savings for the low-income group. The researchers explained this behaviour as a contrarian ‘oppositional reaction’. The relatively low-paid group did not want to engage with information that highlighted social comparisons with their richer colleagues. Information about their richer peers’ choices just reminded low-income employees of their relatively low status, and so they resisted copying their colleagues.17
Maverick minds
Our different attitudes towards risk also connect to our personalities, as they do to demographic characteristics including age, gender and educational attainment. Experimental and anecdotal evidence confirms that contrarians do have the traits we would expect them to have: lower levels of risk aversion, lower levels of conformity and greater optimism – as measured via standard personality tests. Mavericks in the business world illustrate some of these traits. Often, business leaders and CEOs are expected to lead rather than follow. Evidence suggests that CEOs are also more likely to be risk-takers and are also likely to be good team-builders and optimists.18 At a more personal level, business leaders often have distinctive qualities and attributes – many linking to maverick and antisocial tendencies – which may offend some and charm others. Entrepreneurial mavericks are not universally popular. Take the extraordinarily successful entrepreneur Steve Jobs. People who worked with him had very differing experiences of his personality: some thought him inspirational, others found him difficult and uncompromising. As one of his biographers, Karen Blumenthal, has observed, he was a man who thought differently.19 He was a contrarian.
What is driving this maverick behaviour? What maverick psychology underlies the maverick personality? In chapter 3, we explored how different thinking styles can explain the different facets of copycats’ characters. When we decide to copy others, sometimes it is more conscious and deliberate – consistent with Kahneman’s System 2 slow thinking. Other times it is more intuitive, unconscious and/or instinctive – consistent with Kahneman’s System 1 fast thinking.20 These insights can be reversed for contrarians and mavericks. Some mavericks might thrive on the System 1-thinking physiological rewards associated with the buzz of taking risks, following your gut, doing something new and totally different.21 These System 1 influences will operate alongside System 2 thinking: the deliberation and deep intelligence that the maverick taps into when developing new ideas and innovations. Mavericks may be consciously, deliberately taking risks and/or focusing on the future because they believe that their risks today will deliver rewards in the long term. For successful mavericks, there is a balance between the two. Instinctive risk-seeking is moderated by careful reflection in developing ideas and strategies.
If mavericks are driven by a System 1–System 2 interplay between emotion and cognition, then the standard economic theories of expected utility may need a rethink. The neuroscientific concept of reward better captures what mavericks are about. There is an extensive neuroscience literature on risk and reward, and much evidence has shown that dopamine pathways are involved in the processing of reward from risk-taking. These include the rewards we get from satisfying hunger, thirst, desire and other basic drives. Modern behaviours also engage the dopaminergic pathways – including overeating and drug-taking. Reward engages a complex series of neural structures implicated both in basic, instinctive emotional responses and in higher-level cognitive decision-making. For contrarian decision-making, similar interactions will play a role. Whether we are herding or anti-herding we are balancing the rewards against how we feel when we take risks. Some will enjoy risk-taking, others not so much. Perhaps the difference between copycats and contrarians is mainly that the latter viscerally enjoy risk-taking more than the former.
There are some nuances, however. As we saw in chapter 3, research into the neuroeconomics of herding reveals interesting neuroscientific data on activations in reward-processing areas of the brain when mavericks are anti-herding. Contrarian choices were associated with relatively stronger activations in the anterior cingulate cortex. As we noted in chapter 3, this is an area associated with higher levels of cognitive functioning, and so may suggest that contrarians are making cognitive effort to dampen down their ingrained impulses to follow the crowd. This would be
consistent with the hypothesis that mavericks taking risks via their contrarian choices are not being impulsive in the way that risk-taking might be impulsive in other decision-making domains, such as gambling.22
Why we need mavericks
The maverick’s incentives and motivations to rebel are clear from the perspective of the individual, but there are also some important implications for society at large. Mavericks can bring external benefits to the world around them. Mavericks may be independently minded, but this does not preclude them from pro-social desire to make a difference, be useful or inspire others. Mavericks can bring to the world new ideas and fresh approaches. Sometimes independence of thought is in harmony with the needs and choices of the herd.
Some mavericks can change our lives partly because they shift the balance of opinion. Cass Sunstein has explored some of the trade-offs between conformity and dissent. Most of us choose conformity as the most rational strategy, but from a wider perspective, conformity can lead society into big mistakes. Conformity sometimes reflects a lack of information but the problem of well-intended conformity driven by social learning is compounded because people are not always honest about what they believe and what they know. Most people’s need to conform intensifies this dishonesty. In this way, Sunstein explains that widespread conformity exacerbates information gaps and encourages opportunistic behaviours associated with concealing information. Society’s institutions can provide a partial solution. When democracies are working well, institutions such as the press and the legislature will help to ensure that we identify the truth. Institutions do not always work well, however, and then contrarian dissenters have an essential role to play, especially in the echo chambers of social media. Mavericks can be more honest and transparent because they care less about how people will respond to their dissent, and societies need dissenters prepared to resist social pressures.23 Mavericks also serve important social purposes in challenging convention and preserving private information to ensure that it is not swamped by herds of conformist copycats chasing social approval. Mavericks and contrarians help to ensure that important information, ideas and principles are not lost to society at large.
Maverick dissenters have improved our social and political lives in many ways. But they can also create confusion, chaos and, at worst, destruction. Whom we label as maverick dissenters may itself be politically motivated. Different types of maverick change our world in different ways, for better and for worse. We can learn more about their impacts by looking at some specific types, from inventors through to whistleblowers.
Inventors
‘Mad’ inventors are the archetypal mavericks. They think laterally and are not wedded to how things have been done in the past. These instincts and abilities enable them to develop genuinely useful inventions. They are driven by their own intrinsic motivations to solve intellectual, mechanical or business challenges that they have set themselves. They do not always act in opposition to the crowd. Rather, they seem to act independently of the crowd.
Modern civilisation is characterised by the varied partnerships between inventors and entrepreneurs.24 We have maverick inventors, engineers, chemists, physicists, computer scientists, biologists and medical scientists to thank for many of our everyday conveniences – everything from electricity, railways, antibiotics, computers and the internet through to can-openers and zips. In his fascinating account of some modern inventions, historian Gavin Weightman explains how the ‘eureka’ moments that gave rise to many of the inventions we take for granted today were in gestation for many years and sometimes decades. Sometimes this was because the ideas came from maverick amateurs who had the spark of originality but lacked the practical skills and knowledge needed to bring a product to market.25 But none of the things that improve our lives significantly would exist if mavericks of one form or another had not come along and decided that we needed something novel and different.
Rebels
Rebels are the superstars of the maverick world, and their rebellious acts have been glorified – and vilified – for millennia. Over human history, our philosophical, religious and political lives have been driven by rebels, from Socrates and Galileo to Martin Luther King and Nelson Mandela. Rebels obviously share with other mavericks an independent nature, but unlike inventors and entrepreneurs they are driven by a desire not to produce new ideas, but to struggle against old ones. Given that the rebel’s raison d’être is to be in contra-position to the rest, to go against the herd and to oppose convention, the power of their actions depends on the existence of a status quo to oppose. The status quo, which for copycats is a reference point, becomes an inverted reference point for rebels. They use the status quo to identify what they don’t want, or don’t want to be.26 So, whilst rebels are motivated by a desire to act contrary to the crowd, they are not completely independent of it. Successful rebel leaders need a keen social intelligence and an awareness of the sentiments of the crowds around them. In this sense, they are as dependent on crowds as copycats, but in a different way. Without a crowd to watch, support and follow them, rebels have neither purpose nor much chance of success.
We need rebels because they have the capacity to change our world, sometimes for the better. By taking a maverick and contrarian view, these thinkers, activists and revolutionaries have not just been propelled by a desire to do something different and unusual. As important, possibly more important, is their willingness and capacity to do something to transform people’s lives. We may judge some rebels to be good, evil or misguided, depending on our particular perspective. But, at heart, many rebels probably thought they were on a right and just path. And they are intrinsically valuable because they force the herd into that important balance identified by Cass Sunstein – between conformity and dissent.
History’s most famous rebels have well understood their symbiotic relationship with the copycats following them. The Argentine Marxist revolutionary and cult hero Che Guevara was perhaps the archetypal twentieth-century rebel – and he exhibited all of the maverick traits we have described earlier in this chapter. His colleague Fernando Barral described him as being ‘incredibly sure of himself and totally independent in his opinions. He was very dynamic, restless and unconventional . . . the most striking thing about him was his absolute fearlessness.’27 But Che also recognised that his comrades were just as important as he was in supporting his rebellion against capitalist governments in Latin America. Che’s own accounts suggest that he had a high degree of social intelligence, captured in his descriptions of the emotional impact he had on his comrades as a guerrilla doctor:
in the early nomadic phase of guerrilla warfare, the guerrilla doctor must go everywhere with his comrades . . . He must undertake the exhausting and sometimes heart-breaking task of looking after sick men without having in his possession the medicine that would enable him to save a man’s life. During this stage, the doctor has the most influence on the other men and their morale, because, to a man in pain, a simple aspirin takes on importance, if it is administered by someone who identifies with his suffering. During this phase, the doctor must identify completely with the ideals of the revolution, for his words will have more impact on the men than anybody else’s.28
Che’s social intelligence helped him to understand what motivates and drives people, how to secure his comrades’ loyalty, and how to build solidarity with the revolutionary cause. Yet he never became part of the crowd. Even at his most selfless, when caring for and medically administering to his men, uppermost in Che’s rebel mind was his individual impact and influence in leading, not following, the herd.
Rebels do not have to be famous revolutionary combatants to play important roles in social and political change. Sometimes, seemingly small acts of rebellion can have a large political impact. Though fashion is often dismissed as an ephemeral or trivial matter, historically, fashion statements have played crucial roles in political and social change – most strikingly in the context of women’s rights. Amelia Bloomer, born i
n the United States in 1818, rebelled against the fashion constraints that (literally) bound women of the day. A leader of suffrage campaigns and influential in the women’s rights movement, she demanded clothing for women very different from the tight corsets that then dominated women’s fashion. When the women’s rights activist Elizabeth Miller introduced loose-fitting trousers for women, designed to enable more freedom of movement and healthier living, Bloomer promoted them enthusiastically – and gave her name to them. Bloomers became not only a more comfortable alternative to the women’s dresses of the time, but also a symbol of the women’s rights movement. As is often true of maverick ideas and inventions, bloomers fell out of fashion – though the essential idea that propelled them to fame, that women should be enabled to live their lives more easily and comfortably, did endure, alongside the significant political and social changes associated with the emancipation of women.29
Whistleblowers
Whistleblowers are another type of maverick with a capacity for changing our world for the better. But, unlike rebels, they are reluctant mavericks. They do not create, but they do throw light on problems that the rest of us might be tempted to bury. They share the autonomous nature of other mavericks. Whereas rebels have an inherent, irrepressible instinct for rebellion, whistleblowers are more likely to be hostages to fortune. Sufficiently independently minded and principled, they are willing to call out the transgressions of others, but often do so hesitantly. In other circumstances, many whistleblowers might be happy just to blend with the crowd. They often act anonymously and off-the-record because they rationally fear the consequences of overt rebellion, even though, through their self-sacrificing actions, they can have significant impact on improving the welfare of others.