The Bizarre Economics of Tax Havens and Pirate Banking: James S. Henry at TEDxRadboudU 2013

James S. Henry introduces a hot topic: offshore banking. The G8 and G20 are planning meetings to discuss it. Even the Netherlands is a tax haven for certain types of companies. The huge amount of numbers and graphs tells us that we are confronted with nothing less than a global tax haven industry. For example, Apple makes 100 billion dollars a year of tax free profits because of the games private bankers know how to play.

In medieval times people couldn’t hide their wealth when tax collectors came to inventory it. Nowadays they can. It is said that 64 percent of the global profits are parked offshore, for an important part by multinationals from the first world.

The third world is the victim of this practise. An example from the banana industry: exporting a banana from the Cayman Islands costs 13 pence. When it arrives in the UK to be consumed, the costs have grown to 60 pence. All of this money goes to other parties than the Cayman Islands.

Because of the tax havens, countries from the Third World are not able to receive the tax incomes they are entitled to. Henry even concludes that the debt problem of the third world is not a debt problem, but a tax problem. Both amount to almost the same.

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Impeach Trump. Then Move On.

Stop distracting from the core issue, elite negligence and national decline.

Is it possible that more than 20 Republican senators will vote to convict Donald Trump of articles of impeachment? When you hang around Washington you get the sense that it could happen.

The evidence against Trump is overwhelming. This Ukraine quid pro quo wasn’t just a single reckless phone call. It was a multiprong several-month campaign to use the levers of American power to destroy a political rival.

Republican legislators are being bludgeoned with this truth in testimony after testimony. They know in their hearts that Trump is guilty of impeachable offenses. It’s evident in the way they stare glumly at their desks during hearings; the way they flee reporters seeking comment; the way they slag the White House off the record. It’ll be hard for them to vote to acquit if they can’t even come up with a non-ludicrous rationale.

And yet when you get outside Washington it’s hard to imagine more than one or two G.O.P. senators voting to convict.

In the first place, Democrats have not won widespread public support. Nancy Pelosi always said impeachment works only if there’s a bipartisan groundswell, and so far there is not. Trump’s job approval numbers have been largely unaffected by the impeachment inquiry. Support for impeachment breaks down on conventional pro-Trump/anti-Trump lines. Roughly 90 percent of Republican voters oppose it. Republican senators will never vote to convict in the face of that.

Second, Democrats have not won over the most important voters — moderates in swing states.New York Times/Siena College survey of voters in Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin found that just 43 percent want to impeach and remove Trump from office, while 53 percent do not. Pushing impeachment makes Democrats vulnerable in precisely the states they cannot afford to lose in 2020.

Third, there is little prospect these numbers will turn around, even after a series of high-profile hearings.

I’ve been traveling pretty constantly since this impeachment thing got going. I’ve been to a bunch of blue states and a bunch of red states (including Kansas, Missouri, North Carolina, Tennessee, Texas and Utah). In coastal blue states, impeachment comes up in conversation all the time. In red states, it never comes up; ask people in red states if they’ve been talking about it with their friends, they shrug and reply no, not really.

Prof. Paul Sracic of Youngstown State University in Ohio told Ken Stern from Vanity Fair that when he asked his class of 80 students if they’d heard any conversation about impeachment, only two said they had. When he asked if impeachment interested them, all 80 said it did not.

That’s exactly what I’ve found, too. For most, impeachment is not a priority. It’s a dull background noise — people in Washington and the national media doing the nonsense they always do. A pollster can ask Americans if they support impeachment, and some yes or no answer will be given, but the fundamental reality is that many Americans are indifferent.

Fourth, it’s a lot harder to do impeachment in an age of cynicism, exhaustion and distrust. During Watergate, voters trusted federal institutions and granted the impeachment process a measure of legitimacy. Today’s voters do not share that trust and will not regard an intra-Washington process as legitimate.

Many Americans don’t care about impeachment because they take it as a given that this is the kind of corruption that politicians of all stripes have been doing all along. Many don’t care because it looks like the same partisan warfare that’s been going on forever, just with a different name.

Fifth, it’s harder to do impeachment when politics is seen as an existential war for the future of the country. Many Republicans know Trump is guilty, but they can’t afford to hand power to Nancy Pelosi, Elizabeth Warren or Bernie Sanders.

Progressives, let me ask you a question: If Trump-style Republicans were trying to impeach a President Biden, Warren or Sanders, and there was evidence of guilt, would you vote to convict? Answer honestly.

I get that Democrats feel they have to proceed with impeachment to protect the Constitution and the rule of law. But there is little chance they will come close to ousting the president. So I hope they set a Thanksgiving deadline. Play the impeachment card through November, have the House vote and then move on to other things. The Senate can quickly dispose of the matter and Democratic candidates can make their best pitches for denying Trump re-election.

Elizabeth Bruenig of The Washington Post put her finger on something important in a recent essay on Trump’s evangelical voters: the assumption of decline. Many Trump voters take it as a matter of course that for the rest of their lives things are going to get worse for them — economically, spiritually, politically and culturally. They are not the only voters who think this way. Many young voters in their OK Boomer T-shirts feel exactly the same, except about climate change, employment prospects and debt.

This sense of elite negligence in the face of national decline is the core issue right now. Impeachment is a distraction from that. As quickly as possible, it’s time to move on.

“It’s created an atmosphere in which no-one believes what Boris Johnson says”—Parliament rebels

Also on the daily podcast: where America’s longest war went wrong and the economics of unreadably long terms and conditions

BORIS JOHNSON has lost his parliamentary majority. Conservative party rebels will now help push for a bill precluding a no-deal Brexit, making an early election look even more likely. Violence in Afghanistan continues, even as America’s negotiations with the Taliban wrap up; we ask where America’s longest war went wrong. And, unreadably long terms and conditions lead to more than consumer confusion—they break some basic economic principles. Runtime: 20 min

Boris Johnson Loses to Democracy

The prime minister is effectively at war with the Parliament for which he once promised to “take back control.”

LONDON — Boris Johnson has begun with defeat.

Legislators voted last night to seize control of Parliament, alarmed by the prime minister’s insistence that he will take Britain out of the European Union on Oct. 31, even if no deal with the bloc has been reached. On Wednesday, opposition legislators and rebels from Mr. Johnson’s own party will try to pass a law mandating the prime minister to ask for an extension to the deadline if he still has no deal.

It promises to be a week of high political drama in Westminster — and the culmination of over two years of intricate tactical maneuvers and procedural minutiae that have marked British politics.

Time is so short because Mr. Johnson last Wednesday “prorogued” parliament, mothballing it for five weeks from next week: If the bill fails to become law by that point, it automatically falls. The unusual length of the suspension has already occasioned protests across Britain. Demonstrators called it a “coup,” and the speaker of the House of Commons called it a “constitutional outrage.”

Yet on Tuesday night, with Parliament having again flexed its long dormant democratic muscle, it was Mr. Johnson who looked isolated. Furious, he vowed to seek new elections, and stripped the whip from all his rebels — including prominent party grandees — effectively barring them from running again as Conservative candidates.

The conflict has laid bare deep tensions in Britain’s democracy — between the prime minister and Parliament, and between the people and the politics that claims to represent them.

Britain’s Parliament is anomalous. Having failed to sustain its 17th-century deposition of the monarchy, and having been the imperial power rather than the colonized one, Britain has never had a founding constitutional moment. Instead its democracy has evolved within an accreted mass of archaic institutions, including an unelected upper chamber that was until the late 20th century composed of hereditary aristocrats. This grandeur itself has sometimes been thought to be a powerful conservative influence: The Labour politician Nye Bevan once wrote it “lies like an Alp” on the mind of a new member of Parliament.

Under its ritual pomp, Parliament’s curious evolution has made it unusually powerful. A prime minister with a substantial majority has broad latitude to remake the country, as Margaret Thatcher and to a lesser extent Tony Blair did. But without a solid majority, Parliament has great power to resist even the most ambitious leader.

Legislators’ tactics this week are not entirely new: A similar procedure was used to take control and force Theresa May, Mr. Johnson’s predecessor, to seek an extension in April. But the complexity of the new bill — which intends to prescribe Mr. Johnson’s approach to the European Union in exacting detail — reflects the total breakdown in trust between executive and legislature.

April’s version of the bill passed partly because Mrs. May recognized she had lost; Mr. Johnson will use every means at his disposal to frustrate the new bill, including attempts to filibuster its progress in the unelected upper house. Promising a scorched earth, the prime minister is effectively at war with the Parliament for which he once promised to “take back control.”

Despite the throng of demonstrators outside Parliament — roared slogans and vast European Union flags are a daily backdrop to news broadcasts — the political progress of Brexit has been a markedly institutional affair, conducted through arcane procedural instruments and prominent court battles. The alien language of parliamentary procedure — “prorogation,” “humble addresses,” “paving motions” — is parsed for an unfamiliar public by constitutional experts who have rarely been in such demand.

The interviews with members of the public that dot the news vary from bafflement to outright loathing of politics; enthusiasm is a rare beast. According to Hansard Society research, civic trust is threadbare: Only a third of people trust politicians to act in the public interest, and just under half feel they have no influence at all on decision-making.

Britain’s withdrawal from the European Union was always likely to be a vastly complex technical matter, and the bloc’s tendency to conduct politics through intricate sequencing lends itself to squabbles over procedural minutiae. But the cause of the proliferating conflict in British politics has always been domestic: Despite losing her majority in 2017, Mrs. May’s conduct of Brexit was distinguished by her autocratic instincts and determination to avoid parliamentary consultation.

The same highhanded conduct saw her first dragged to the Supreme Court to assert Parliament’s right of a “meaningful vote,” and then locked in a battle with Parliament over the disclosure of the attorney general’s legal advice. That battle saw her censured for “contempt of Parliament.” The phrase epitomizes her successor’s entire attitude.

One consequence of the prominence of procedural conflicts since the Brexit referendum has been to transfer the political questions which drove it into arguments about legal permissibility. Questions about

  • the kind of state the Britain wishes to be,
  • relations among its constituent nations, its
  • draconian attitudes to migrants, its
  • vexed history in Ireland,
  • how it makes domestic political choices and
  • how far it wishes economic integration with other European states —

all are folded into, and sometimes disappear in, conflicts over parliamentary rights and legal obligations.

It is then no wonder that apparently arid matters suddenly take on intense but displaced political energy — the kind that saw High Court judges branded “enemies of the people” on the front pages of the tabloid press and that turned usually pacific sections of society into ardent protesters.

The institutional confinement of the Brexit process has been seized on by Dominic Cummings, the former director of Vote Leave, now Mr. Johnson’s chief adviser and architect of his hard-line strategy. Mr. Cummings recognizes a fault line in Britain’s democratic structure: between an exercise conducted by plebiscite — the Brexit referendum — and the conventional, deliberative methods used to interpret and deliver the consequences of that vote.

By painting the referendum as the sole truly democratic exercise, with all subsequent debates and concerns over rights a matter of cynical pettifogging and anti-Brexit trickery, he believes he can deliver a reconfigured political landscape, straddled by Mr. Johnson as a flaxen-haired avatar of the popular will.

Perhaps Mr. Cummings has in mind that half the people surveyed by Hansard claimed they longed for a strong leader to “break the rules” of politics. Yet the strongman has feet of clay. If suspending Parliament was intended to demonstrate Mr. Johnson’s credentials as a champion of the people, it managed to unite only 27 percent of them. Further overreach as the prime minister attempts to break Parliament to his will is unlikely to improve that number.

Nobody doubts new elections are on the horizon, the central issues of which will be shaped in the next weeks. It will be an election that Mr. Johnson intends to fight on a narrow Brexit question. To beat him, the Labour Party, which has been as troubled by division between the two Brexit camps as the country as a whole, will not only need a clear message on Brexit but also some means of bridging its divide. Democracy could be a powerful theme: not just its defense in Parliament but its extension beyond Parliament’s feudal residues and monarchical hangovers, into Britain’s regions and its antiquated electoral system.

It is widely known that Mr. Johnson wants a “people versus politicians” election. Perhaps it is time for the opposition to push for “the country versus Boris Johnson.”

Brexit Vote Goes Against Boris Johnson, and He Calls for an Election

British lawmakers on Tuesday rose up against Prime Minister Boris Johnson, moving to prevent him from taking the country out of the European Union without a formal agreement. The epic showdown has Britain on the verge of a snap general election.

After losing his first-ever vote as prime minister, Mr. Johnson stood up in Parliament and said he intended to present a formal request for an election to lawmakers, who would have to approve it.

A little over a month ago, Mr. Johnson, a brash, blustery politician often compared to President Trump, swept into office with a vow to finally wrest Britain from the European Union by whatever means necessary, even if it meant a disorderly, no-deal departure.

Now, Parliament has pulled the rug out from under him, and Mr. Johnson is at risk of falling into the same Brexit quagmire that dragged down his predecessor as prime minister, Theresa May.

The lawmakers forced his hand by voting by 328 to 301 to take control of Parliament away from the government and vote on legislation as soon as Wednesday that would block the prime minister from making good on his threat of a no-deal Brexit.

That prompted an angry response from the prime minister.

“I don’t want an election, the public don’t want an election, but if the House votes for this bill tomorrow, the public will have to choose who goes to Brussels on Oct. 17 to sort this out and take this country forward,” Mr. Johnson said, referring to the next European Union summit.

Tuesday was a critical moment in Britain’s tortured, three-year effort to extract itself from the European Union. The saga has divided Britons, torn apart the ruling Conservative Party and prompted complaints that Mr. Johnson has trampled the conventions of the country’s unwritten constitution.

A majority of lawmakers are determined to block a withdrawal from the European Union without a deal, which they believe would be disastrous for the country’s economy. Tuesday’s vote suggested they have the numbers to succeed.

Mr. Johnson’s aides had made clear that, in the event of a defeat on Tuesday, he would seek a general election on Oct. 14 — just a little over two weeks before the Brexit deadline of Oct. 31.

Phillip Lee with the leader of the Liberal Democrats, Jo Swinson, after defecting from his Conservative Party on Tuesday.
CreditRoger Harris/U.K Parliament

The accelerating pace of events suggests that Britain’s Brexit nightmare may finally be approaching an endgame after years of paralysis.

Tuesday’s vote also marked the moment when Mr. Johnson’s hardball tactics, for once, were met with equal resistance.

On a day of high drama, Mr. Johnson lost his working majority in Parliament even before the vote took place, when one Conservative rebel, Phillip Lee, quit the party to join the Liberal Democrats, who have managed to stage a resurgence by positioning themselves as an unambiguously anti-Brexit party.

The practical effect of Mr. Lee’s defection for Mr. Johnson was limited, however, because the government would fall only if it were defeated in a confidence motion.

But in moment weighty with symbolism, Mr. Lee walked across the floor of the House of Commons and sat beside Jo Swinson, the leader of the Liberal Democrats, as the prime minister was speaking about the recent Group of 7 summit. Mr. Lee accused Mr. Johnson of pursuing a damaging withdrawal from the European Union in unprincipled ways, and of “putting lives and livelihoods at risk.”

Mr. Lee’s break with the Tories was most likely just the first of many.

On Tuesday, Downing Street said it would press ahead with plans to discipline those rebels who voted against the government by expelling them from the Conservative Party in Parliament. They include two former chancellors of the Exchequer, Philip Hammond and Kenneth Clarke, and Nicholas Soames, the grandson of Winston Churchill.

That could threaten Mr. Johnson’s ability to manage day-to-day business in Parliament, underscoring the need for a new election.

The extent of the Tory civil war was on full display as several of Mr. Johnson’s Conservative critics, including the former chancellor of the Exchequer, Philip Hammond, lobbed hostile questions at him, making it plain that they had not been brought back into line by threats of expulsion from the party.

Opponents of a no-deal Brexit argue that Mr. Johnson’s promise to leave the bloc without a deal, if necessary, would be catastrophic for the British economy. Many experts say it could lead to shortages of food, fuel and medicine, and wreak havoc on parts of the manufacturing sector that rely on the seamless flow of goods across the English Channel. Leaked government reports paint a bleak picture of what it might look like.

Mr. Johnson says he needs to keep the no-deal option on the table to give him leverage in talks in Brussels, because an abrupt exitwould also damage continental economies, if not as much as Britain’s. The prime minister appealed to his own lawmakers not to support what he called “Jeremy Corbyn’s surrender bill,” a reference to the leader of the opposition Labour Party.

“It means running up the white flag,” he said.

Mr. Johnson also claimed to have made progress in talks with European Union leaders, although his own Brexit secretary, Stephen Barclay, on Monday gave a much less rosy assessment of the state of negotiations.

Demonstrators protesting Mr. Johnson and Brexit marched outside Parliament on Tuesday.
CreditAndrew Testa for The New York Times

Britain’s main demand is for the European Union to ditch the so-called Irish backstop, a guarantee that the bloc insists it needs to ensure that goods flow smoothly across the Irish border whatever happens in trade negotiations with Britain. Mr. Johnson said he planned to visit Dublin next week for talks with his Irish counterpart, Leo Varadkar.

Conservative rebels believe Mr. Johnson is more interested in uniting Brexit supporters behind him ahead of a general election than in securing an agreement in Brussels.

One former chancellor of the Exchequer, Kenneth Clarke, accused Mr. Johnson of setting impossible conditions for the negotiations, attaching as much blame as possible to the European Union for the failure to get a deal and then seeking to hold a “flag-waving election” before the disadvantages of leaving without an agreement become apparent.

The bitter dispute has taken Britain into new political territory.

Last week, Mr. Johnson provoked outrage by curtailing Parliament’s sessions in September and October, compacting the amount of time lawmakers would have to deal with the most crucial decision the country has faced in decades.

Mr. Johnson’s allies argue that it is the rebels who are subverting the principles of Britain’s unwritten constitution by seizing control of the proceedings of Parliament that are normally the preserve of the government.

The European Commission said on Tuesday that while the frequency of meetings between its Brexit team and the British negotiator, David Frost, had increased, little headway had been made toward avoiding a hard border between Ireland and Northern Ireland.

Asked whether the British government was using reports of its talks with the commission for political purposes at home, the commission’s spokeswoman, Mina Andreeva, said that the body was “an honest broker, as always.” She said she could not “report any concrete proposals having being made that we have seen.”

Mr. Hammond, a senior member of the cabinet two months ago, told the BBC on Tuesday that Mr. Johnson’s claim of progress on the negotiations was “disingenuous.”

To add to the turmoil and confusion, the opposition Labour Party suggested it might thwart Mr. Johnson’s attempt to push for a general election, should it come to that. Under a 2011 law, the prime minister needs a two-thirds majority to secure a snap election, although it is possible that the government might try to legislate to set that provision aside, a move that would mean it needs only a simply majority.

There is so little trust in British politics that Mr. Johnson’s opponents fear that he might request an election for Oct. 14 but then switch the date until after Oct. 31 as part of a move to lock in a no-deal withdrawal.

Labour has said that its priority is to stop Britain leaving the European Union without a deal, because of concerns about what such a departure would mean for the economy.

But Labour’s stance underscores that the backdrop to everything in British politics is a sense that a general election is looming, with key players maneuvering for the most advantageous moment.

The ‘Billy Graham rule’ doesn’t honor your wife. It demeans her — and all women.

It’s charitable to first assume our fellow humans are acting in good faith, so let’s first assume that Robert Foster genuinely believes he is the hero of this story. Let’s assume that when the Mississippi gubernatorial candidate denied a female journalist access to his campaign because she is female, he truly saw himself as a bulwark against moral decay. This doesn’t make him right, of course, but it does give context to the problem — albeit a context that should terrify us all.

Larrison Campbell, a female reporter with Mississippi Today, revealed this week that she had asked to shadow Foster for a day on the campaign trail. Two of her colleagues were already following other contenders, but Foster turned down Campbell’s request — unless, that is, she brought along a male colleague. The reason? He obeys the “Billy Graham rule,” refusing to be alone with any woman other than his wife, or, as he put it, “avoid any decision that may evoke suspicion or compromise of our marriage.”

Criticism followed, and Foster bristled at it: “The liberal left . . . can’t believe, that even in 2019, someone still values their relationship with their wife and upholds their Christian Faith,” he tweeted.

But unfortunately, there’s not a single inch of moral high ground achieved via the Billy Graham rule, which purports to honor marriage vows. In similar fashion, Vice President Pence once said he would not dine alone with a woman to whom he wasn’t married. But rules like these don’t honor your wife. They just presume that your marriage vows are so flimsy that you can’t be trusted to uphold them unless a babysitter monitors you. It’s rather like a thief sanctimoniously announcing that he brings a parole officer every time he goes to the bank to make sure he doesn’t rob it. Good for you, dude, for knowing your own limitations — but it doesn’t make you better than the rest of us, who manage to regularly not steal things even when we’re completely alone.

Or, as writer Jeremy White offered: “[The rule] presumes either:

A) you can’t be trusted or

B) women can’t be trusted.

Everyone invoking that rule should be prepared to answer which is true.”

At other points, Foster’s camp seemed to imply that the issue wasn’t about his marriage vows but about optics. “We’re really concerned about bad publicity,” Campbell said Foster’s campaign director told her. The director mentioned the possibility of a rival campaign taking photographs of the pair together, which would put Foster in a “compromising position.”

There’s so much wrong with this logic that it’s difficult to know where to start.

It implies that a man and woman together are necessarily engaging in compromising activities. Even if they are in public. Even if one of them, like Campbell, is gay. Even if one of them is a candidate on the campaign trail and the other is holding a notebook and wearing a press badge, and they’re making the rounds of public events and rubber chicken dinners. (Truly, if this is what Foster considers being caught in flagrante, I feel deeply sad about his sex life.) It implies that Campbell is a love interest before she’s a journalist, even when she’s specifically there as a journalist.

This logic further implies that Foster’s silly, specious perception of a “compromised position” is more important than the actual compromised position that his policy creates for Campbell. She has been assigned a job that she is now unable to do. Her news outlet must decide whether to short its readers on coverage of a gubernatorial candidate on a matter of principle or capitulate to the candidate’s insulting demands. (They rightly chose the former and skipped the assignment).

The most harmful aspect of the Graham/Pence rule is this: It keeps women out of the room. It says that men can forward their careers via mentoring sessions, golf games and brainstorming lunches, but women cannot.

Are we to gather that, because of this rule, Foster would also never employ a female chief of staff, attorney or accountant and never visit a female doctor, dentist or physical therapist, since all of those roles would necessitate occasional alone time?

These might be acceptable, if dispiriting, choices for a private citizen to make in his own life, but a governor making them has cascading effects for hundreds of thousands of people within his bureaucracy. The Graham/Pence rule prevents women from climbing to the top of their careers because the men who have the power to help them get there won’t even let them in the room.

To add insult to injury, the men barring the door get to use their faith as the deadbolt. Their discrimination is wrapped in piety; their disdain for women is disguised as honor for wives. Rather than figuring out how to do something truly moral, like create a world in which all genders are equally able to succeed, they create a delusion where women must be protected into oblivion.

Can you imagine if Foster’s faith-based rationale was rooted in any faith but Christianity? Can you imagine if a Muslim male candidate refused to be shadowed by a female reporter? What then do you suppose would be the reaction of far-right conservative evangelicals?

Can you imagine what a positive impact Foster could have had if he’d chosen a different route — highlighting his respect for women in professional roles, for example, or building enough trust in his marriage that it didn’t need to be governed by arbitrary rules? If he was uncomfortable with Campbell coming along alone,

  • he could have provided his own campaign staffer, rather than asking her to bring a colleague.
  • He could have brought his wife.
  • He could have live-streamed the trip for video evidence of its propriety. He had options.

But late Wednesday night, Foster was still defending his position, presenting himself as the wronged party. “My wife and the State of Mississippi deserve a governor who doesn’t compromise their beliefs,” he wrote. And then, a vaguer tweet that also seemed to allude to the incident: “I will not be intimidated into a corner of silence by a group of radical Socialists and Communists whose goal in life is to dismantle America.”

Dismantle America. Two professional, clothed, adults riding together in a car, in the process of doing their respective jobs, is dismantling America.

The only upside of Foster continuing to dig this hole was that, by the end of the day, it was difficult to imagine any woman wanting to spend 15 hours in a car with him. Not alone, not with a chaperone, not for work, not for fun. He can’t be in a car with a woman doing her job? Fine. Leave him in the dust, by the side of the road.

Consumers Are Becoming Wise to Your Nudge

“Only 2 rooms left? They don’t expect me to believe that do they? You see that everywhere.”

I leave with a wry smile. The client won’t be happy, but at least the project findings are becoming clear. Companies in certain sectors use the same behavioral interventions repeatedly. Hotel booking websites are one example. Their sustained, repetitive use of scarcity (e.g., “Only two rooms left!”) and social proof (“16 other people viewed this room”) messaging is apparent even to a casual browser.

For Chris the implication was clear: this “scarcity” was just a sales ploy, not to be taken seriously.

My colleagues and I at Trinity McQueen, an insight consultancy, wondered, was Chris’s reaction exceptional, or would the general public spot a pattern in the way that marketers are using behavioral interventions to influence their behavior? Are scarcity and social proof messages so overused in travel websites that the average person does not believe them? Do they undermine brand trust?

The broader question, one essential to both academics and practitioners, is how a world saturated with behavioral interventions might no longer resemble the one in which those interventions were first studied. Are we aiming at a moving target?

.. We started by asking participants to consider a hypothetical scenario: using a hotel booking website to find a room to stay in the following week. We then showed a series of nine real-world scarcity and social proof claims made by an unnamed hotel booking website.

Two thirds of the British public (65 percent) interpreted examples of scarcity and social proof claims used by hotel booking websites as sales pressure. Half said they were likely to distrust the company as a result of seeing them (49 percent). Just one in six (16 percent) said they believed the claims. 

The results surprised us. We had expected there to be cynicism among a subgroup—perhaps people who booked hotels regularly, for example. The verbatim commentary from participants showed people see scarcity and social proof claims frequently online, most commonly in the travel, retail, and fashion sectors. They questioned truth of these ads, but were resigned to their use:

“It’s what I’ve seen often on hotel websites—it’s what they do to tempt you.”

“Have seen many websites do this kind of thing so don’t really feel differently when I do see it.”

In a follow up question, a third (34 percent) expressed a negative emotional reaction to these messages, choosing words like contempt and disgust from a precoded list. Crucially, this was because they ascribed bad intentions to the website. The messages were, in their view, designed to induce anxiety:

 “… almost certainly fake to try and panic you into buying without thinking.”

“I think this type of thing is to pressure you into booking for fear of losing out and not necessarily true.”

For these people, not only are these behavioral interventions not working but they’re having the reverse effect. We hypothesize psychological reactance is at play: people kick back when they feel they are being coerced. Several measures in our study support this. A large minority (40 percent) of the British public agreed that that“when someone forces me to do something, I feel like doing the opposite.” This is even more pronounced in the commercial domain: seven in ten agreed that “when I see a big company dominating a market I want to use a competitor.” Perhaps we Brits are a cynical bunch, but any behavioral intervention can backfire if people think it is a cynical ploy.

Heuristics are dynamic, not static

Stepping back from hotel booking websites, this is a reminder that heuristics are not fixed, unchanging. The context for any behavioral intervention is dynamic, operating in “a coadapting loop between mind and world.” Repeated exposure to any tactic over time educates you about its likely veracity in that context. Certain tactics (e.g., scarcity claims) in certain situations (e.g., in hotel booking websites) have been overused. Our evidence suggests their power is now diminished in these contexts.

Two questions for the future

In our study, we focused on a narrow commercial domain. It would be unwise to make blanket generalizations about the efficacy of all behavioral interventions based on this evidence alone. And yet nagging doubts remain.

#1: Like antibiotic resistance, could overuse in one domain undermine the effectiveness of interventions for everyone?

If so, the toolkit of interventions could conceivably shrink over time as commercial practitioners overuse interventions to meet their short-term goals. Most would agree that interventions used to boost prosocial behavior in sectors such as healthcare have much more consequential outcomes. In time, prosocial practitioners may be less able to rely on the most heavily used tactics from the commercial domains such as social proof and scarcity messaging.

#2 : How will the growing backlash against big tech and “surveillance capitalism” affect behavioral science?

Much of the feedback from the public relates to behavioral interventions they have seen online, not offline. Many of the strategies for which big tech companies are critiqued center on the undermining of a user’s self-determination. The public may conflate the activities of these seemingly ubiquitous companies (gathering customer data in order to predict and control behavior) with those of the behavioral science community. If so, practitioners might find themselves under much greater scrutiny.

Feedback loops matter

There probably was never an era when simple behavioral interventions gave easy rewards. Human behavior—context-dependent, and driven by a multitude of interacting influences—will remain gloriously unpredictable.

Marketers should design nudges with more than the transaction in mind, not only because it is ethical or because they will be more effective over time but also because they bear responsibility toward the practitioner community as a whole.

The lesson I take from our study? Feedback loops affect the efficacy of behavioral interventions more than we realize. Just because an intervention was successful five years ago does not mean it will be successful today. Practitioners should pay as much attention to the ecosystem their interventions operate in as their customers do. There’s no better place to start than spending time with them—talking, observing, and empathizing.

We should also consider our responsibilities as we use behavioral interventions. Marketers should design nudges with more than the transaction in mind, not only because it is ethical or because they will be more effective over time but also because they bear responsibility toward the practitioner community as a whole. We owe an allegiance to the public, but also to each other.