A politician who has risen despite everyone predicting otherwise. This article explores Donald Trump’s rise through the views and perspectives of famous French philosopher Roland Barthes, American economist Hyman Minsky and other political theories
“The virtue of all in wrestling is that it is the spectacle of excess.”
Events, scenarios, and agendas today, reveal and unfold at the end of spectrum of excess and show. The end of the debate helps segregate people into two groups: people who win and people who do not win. The results are insignificant when the audience is small. However, a debate involving an audience of 84 million+ viewers and candidates for future presidency holds different implications altogether.
Hillary Clinton and Donald Trump battled out on the ground zero in the first presidential debate. The Wall Street gave out its winners and losers and set the score 1-0. However, this article is not about who won and by what margin; there are millions who have already sealed the deal on that one. I want to point out to a completely different phenomenon, unravelling, unnoticed, by the larger segment of the ‘politically and socially’ aware segment of our society.
It all started when I was twenty three minutes and fifty three seconds into the debate. An intriguing idea materialised in my head: how did this actually happen? And if this did happen, then what more can possibly happen? I might have found an answer in one of Nobel Laureate Robert Shiller’s lectures. The American economist, in a lecture on behavioural economics, mentioned an interesting theory which I thought might hold the key to a possible explanation for what more can possibly happen. But before we move on to the theory, by the statement what more can possibly happen, I also want to explore the answers as to why we as a society are not ready to accept the mere possibility of unwanted events taking place.
Shiller mentions the Prospect Theory in his lectures of Financial Markets. The Prospect Theory was created in 1979 and developed in 1992 by Daniel Kahneman and Amos Tversky. It provides an interesting and opposing view to the previous ‘Expected Utility Theory’. Under expected utility theory (EU) decision makers weight probabilities linearly. However, the evidence suggests that decision makers weigh probabilities in a nonlinear manner (which is what the Prospect Theory suggests). To put it simply, consumers do not weigh the probability of events happening proportionately. I can provide an example (at the risk of being crude and over-simplistic). Suppose you are in an airplane and the probability of the airplane crashing is 0.000001. The expected event is not a favorable one and so you will disregard the low probability and assume the probability of expected outcome to be zero. Similarly, in a casino the probability of hitting for another card and winning in a game of BlackJack is 0.001. Since the expected event is a favorable one, the you might appreciate the probability to as high 0.5 (Author’s note: The numbers taken in the example are not accurate and just used to explain the concept). What this means is that if the expected outcome is undesirable, consumers tend to negate the possibility of the event happening exponentially and vice versa.
Now let me come back to our topic and connect the dots for those of you who are still wondering what is happening. The following two headlines, not from many months back, will make everything crystal clear:
None of them turned out to be true, right? So where did all the intellectuals go wrong? You know a possible answer: The Prospect Theory. After all, how can a man clouded with controversy and tons of hate remarks be standing on the podium as a prospective candidate. Who voted and if so then why did someone vote for him? The Brexit happened and people responded. Peers and colleagues endlessly discussed the possible future scenarios; sometimes at the cost of the most bizarre arguments but no one who I met thought about the underlying reasons that actually drove the movement which was predicted to fail till the very end. Trump is happening and it is time to respond and understand it. This article is not advocating a particular candidate; rather it is trying to explore the rise of the billionaire real estate developer who, most thought, did not stand a chance even to win the primaries till a few months back.
Why People Support Trump?
The Atlantic conducted a survey where they asked American voters why they support the real estate moghul and here are a couple of responses:
- Why trust Trump? The political system has been set up against the public for years. There is no difference between the Republicans and Democrats; they are just tools to divide & conquer the people. The presidency is a joke! Trump is the wild card. Do I trust him? Not necessarily, but I definitely don’t trust a lot of the other “candidates”.
- It really isn’t about Donald Trump. It’s about the fact that many thought and believed President Obama was the “change” that they wanted in 2008. We still trusted him in 2012. All of that “hope” has died. This administration keeps telling everyone that things are better, but the middle class now knows that isn’t quite true. Wall Street, the banks, and even illegal immigrants seem to be prospering more than the average American citizen. We are desperate. Desperate people do desperate things.
There are a many more responses which you can check out at their official website. I went through almost all of the 30 responses that were posted on the website and what I discovered was not something very different that what I had expected: the need for change. The average American voter backing Trump is a citizen who feels that the political system set in place is designed to dupe and kill the American Dream for the middle class. I chalked out the following core reasons:
- People have started to believe that they do not have equal opportunity and that the current political and legislative system runs against them,
- The government program schemes in place are just not benefitting anyone in real terms,
- Politicians are working for the business elite who fund their campaigns,
- The society does not allow enough freedom of speech and goes along a set line of thoughts. Most believe Trump is a person who speaks against the flow and is a circuit breaker.
One might still be thinking, ‘Well OK, but do these people not see that he is highly under informed on global affairs and that most of his economic policies are hollow’. In fact, people do see that but here is another answer from one of the supporters I found on the website Quora. (I will rephrase it but you can read the original one online):
I know that he is not the best but once he gets elected to the office he has the best economic advisors and best policy makers to advise him. Obviously he won’t start a nuclear war. There is a board sitting there to advise him on those issues. He is smart businessman and know to listen to people who know their stuff. Plus, he is self funded (unlike others) and does not need to execute policies which help rich people. Trump doesn’t know much about international issues, true, and while this scares some people, it doesn’t scare me, at least we know going in that he doesn’t know that much and so he can rely on his competent advisers and task forces to help him make decisions.
It brings us to the next essential part of the Prospect Theory: The Value Function. It highlights the phenomenon of perceived gains over perceived losses. Tversky and Kahneman proposed that losses cause greater emotional impact on an individual than does an equivalent amount of gain, so given choices presented two ways — with both offering the same result — an individual will pick the option offering perceived gains. In other words, Trump supporters are ready to overlook the long term losses over the short term gains that Trump campaign promises to the middle class: Jobs, Jobs and Jobs.
Real Growth for the Middle Class
Let us take a look at some infographics to see where the crack develops from. PEW research has some really interesting graphs that actually show what has been happening in America for the past few years.
According to the BLS, the average hourly wage for non-management private-sector workers in December 2014 was $20.67, unchanged from August and 2.3% above the average wage a year earlier. That’s not much, especially when compared with the pre-Great Recession years of 2006 and 2007, when the average hourly wage often increased by around 4% year-over-year. (During the high-inflation years of the 1970s and early 1980s, average wages commonly jumped 8%, 9% or even more year-over-year.)
According to the website, the average hourly wage in 2014 (adjusted for inflation) gave the average American the same purchasing power as it did in the 1979. Majority of the increase in income has just been distributed to the top 1% of the American population. This is another graph that shows the average income for American households with respect to the percentage (in year 2014):
Is there reason to be surprised? Economist Hyman Minsky (who famously predicted the Great Financial Crash) points out to this phenomenon. In his book Why Minsky Matters, L. Randall Wray says that Minsky pointed to the side effects of excessive social welfare schemes over direct employment opportunities. Minsky believed that welfare schemes just teach the unemployed skills for jobs that do not actually exist. He also pointed out against the Keynesian perspective of demand fuel policies reducing unemployment. Minsky argues that such policies would only re-distribute the wealth amongst the elite of society leaving the lower strata unaffected or worse (since spending by the upper strata would fuel prices).
It is not surprising that creation of Jobs and Trade policies has been the fundamental on which Trump has spent majority of his campaign and time on. The Trump campaign can be related to a very interesting video which you can watch here. The video shows the company offshoring to Mexico and laying off around 1100 workers. The fear of losing jobs is increasing amidst the American middle class. With more and more people coming in and jobs coming out, confidence of the average household is at an all time low. In fact, a survey carried organised by Marketwatch bolsters this point. Barely more than one in 10 (13%) American adults believe their children will be better off financially than they were when their career reached its peak and just over half (52%) believe their children will have less disposable income than they did in the future. This was a survey of more than 1,100 American adults released Wednesday by life insurer Haven Life and research firm YouGov. What’s more, just 20% of Americans believe their children will have a better quality of life when they reach their age.
Student loans in America are at an all time high. Owing to the flat real incomes, the average student debt has tripled in the past two decades to almost $30,000! I was just listening to one of Trump’s more recent campaign speech in Chester Township, Pennsylvania. He talked about college debt and that resulted in an uproar from the crowd. All Trump had to say was that colleges cover billion dollar endowments in investments whereas they should be giving it to students to are under student debt. Trump feeds on the fact that he does not belong to the conventional politicians who have suppressed the middle class from ages. On solving the legislative blocks once he gets to the White House, Trump said and I quote, “Together we will have a conversation, but it will be a quick conversation and not a political conversation which carries on for years.” The list goes on.
From the same campaign I took out the following statements as well. “1/4 of manufacturing jobs have been lost since China joined the WTO. He blames Bill Clinton backed by Hillary Clinton. He says that all the hedge funds are donating to Hillary. “Everybody who are in the rich system are throwing the money in Florida.” He says that she is outspending him 50-1. A majority of supporters support Trump for the very fact that he is self funded unlike others. Supporters believe that this gives Trump the opportunity and incentive to not be pro-rich and pro-elite when he makes it to the White House for once.
Leader of Excess:
French philosopher Roland Barthes (1915-1980) talks about the era of spectacle and excess. He talks about wrestling and how the audience connects and immerses themselves in the display of excess going on. Barthes says that wrestling breaks the bounds of the ring, allowing the audience to become a part of the show. Excessive violence against one participant is justified in the eyes of the spectators till the time justice is served. That is exactly what is happening. One of the most important reasons why Barthes can be the key to explain the Trump phenomenon is this extract from one of his essays:
-The public is completely uninterested in knowing whether the contest is rigged or not, and rightly so; it abandons itself to the primary virtue of the spectacle, which is to abolish all motives and all consequences: what matters is not what it thinks but what it sees.
The supporters see fixed real incomes, rising debts, job losses and income inequality. Amidst all this Trump promises to provide them the excess to salvation! Trump represents the opportunity of excess. In this wonderful article on excess, psychoanalyst Harold Boris writes, “When we are greedy, we are in a state of mind in which we “wish and hope to have everything all the time”; greed “wants everything, nothing less will do.” The answer to Trump’s growing voter base lies in the fact that he promises to deliver the excess which people are increasingly desperate for.
Some events happen even in the unlikeliest of times. Brexit and Trump are just the more recent ones. It is important to explore the underlying reasons for the events happening despite the lowest or in some cases, zero probability assigned to them. What happens tomorrow, we can seldom predict precisely. But a look at the facts and history can often lead us to reasons for the event occurring. Barthes, Prospect Theory, and theories of political science are definitely tools which can be employed to understand the Trump phenomenon and many (unexpected) ones which are yet to unfold.