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Welcome to A Luckier New Year

I received a newsletter from the Economist, which noticed one thing I was not thinking of: 2021 is a lucky year by the sequential number, “The number 21 is connected with luck, risk, taking chances and rolling the dice. It’s the number of spots on a standard die, and the number of shillings in a guinea, the currency of wagers and horseracing. It’s the minimum age at which you can enter a casino in America, and the name of a family of card games, including blackjack, that are popular with gamblers.” Let’s sincerely hope 2021 to bring all the luck we can have, as we all had enough bad luck in 2020.

Working Against Disinformation

Fighting against disinformation should be our top New Year’s Resolution if 2021 is truly to be a lucky year. This report is absolutely right that facts alone won’t fix the problem, because disinformation is not a fact problem but rather a people problem. People are packages filled with cognitive and emotional elements, both current and in the past. Therefore, there does not seem to have a quick and easy solution because while facts can be quickly loaded, people are hard to change in a short time.

From Distrust to Disinformation

It doesn’t take a genius to figure out that disinformation is deeply rooted in distrusts among people. Anything from the distrusted people would be garbage, while anything from trusted people will be taken as given. The question is what caused distrusts in a country known for high social trusts. The deviations from social equilibria had to take the blame.

Using racial justice as an example. Justice for all (i.e., treating all racial groups equal) is the equilibrium. When a minority group is treated favorably over others one way or the other, for one reason or the other, even the best intentions in the world would not save us from getting the worst results in the end, all because members of different racial groups become suspicious of each other. They no longer trust the society to distribute social gains with fairness.

By the same token, the civil right movement in the 1960s deserved credits as it fought against racial discrimination to help establish the “justice for all” equilibrium.

The same holds for globalization, another key issue that divides us. The equilibrium here is based on a tradeoff between labor productive and allocative efficiencies. If a large number of (manufacturing) jobs had flowed to other countries like China, a domestic demand has to be satisfied for workers’ re-assignment, re-employment or reallocation in order to maintain equilibrium. Otherwise a disequilibrium is bound to arise with miserable consequences like pushing Trump to the power.

Other ways of maintaining an equilibrium in globalization include phasing out overseas’ job exodus over time, so workers had the time to prepare themselves for new positions. Even more importantly, as we have learned from a small crisis in PPE supplies for healthcare professionals during the pandemic, moving entire industries out of a country is not wise or safe.

On my theoretical paper on backlash, I pointed out that when we get to a category of goods or an entire industry, full specialization is neither safe nor efficient. “It is unsafe because it can only rely on imports to meet domestic demand for the industry foregone, making itself vulnerable to the manipulation of others.”

With the US being the most powerful country in the world, this may not present as many problems as would be to any other countries, because relatively few countries in the world would dare mess around with the US. But the issue of inefficiency remains because full specialization “rules out the complementarity that exists between industries.” This complementarity matters because industries enhance each other to make the total larger than the parts. China’s manufacturing super power for example is partly derived from the fact that it has become “the only country in the world to obtain all the industrial categories listed in the United Nations industrial classification.”

Full specialization is also inefficient because we can safely assume that people possess different interests, preferences and talents, therefore “having multiple industries helps raise efficiency of production because people with different interests and talents will select themselves into the industry that fits them the best, far more efficient than allocating everyone to the same single industry.” In the rust belt of the US, many workers apparently are only good at manufacturing and would have a hard time finding anything drastically different.

Finally, the backlash taught us that once an industry leaves a country, it costs much more to bring it back.

Ways to Reduce Distrusts

Knowing the root problem in distrusts, what can we do to solve the problem to raise the trust level? The first way is to reduce social distances. That is, both sides make moves to draw nearer to each other. One of the easiest things to do along that line is to admit our own weaknesses and limitations and accept the virtues of others. Joe Biden did it right when he praised Trump for getting the vaccine moving fast.

It also helps to show empathy to anyone accepting or spreading disinformation. We could say they are forgivable as fake news and conspiracy theories are everywhere, that it is easy to believe when your friends and relatives all do, that the truth has not been readily available and, in relation to globalization, that the Obama administration did not do a good job getting workers trained for new positions.

Here is a good study we can use to show your understanding. It explains why so many Americans believe the election is not fair. Psychologically, it has been proven that “when people get an unfavorable outcome but believe the process used to make the decision was fair, they react more positively.” “This is known as the ‘fair process effect‘: the tendency for fair procedures to mitigate negative reactions to an unfavorable decision.” However, when the issue involves core identify of people, the fair process effect no longer works. Instead, people will try to find holes in the process as the legitimate reasons against the unfavorite conclusions.

In the above report, experts offered suggestions emphasizing social connections, relationships and love. My own idea of having a digital domestic version of the Peace Corps is exactly the same line of thinking. Simply letting people talk to each other can reduce the sense of alienation and division, take their guard down and open up to different views, at least no longer see them as enemies.

Finally, we may not eliminate all the disinformation overnight, but can control its damages. For example, anyone can doubt the usefulness of wearing masks in public, but in California, at least in the Bay Area, I have seen many (most?) places posting a sign requiring face covering or no entrance of the building. This decentralized social control fits the American culture better.