When the nominations for the 88th annual Academy Awards were announced this past January and for the second year in a row included no minority nominees for any of the major performance categories, my first thought was here we go again. But my second thought was that Chris Rock would be hosting the Oscars’ award ceremony and that there might be fireworks.
I was not disappointed. Rock quickly let it be known that he would not be boycotting the ceremony (as he quipped during his Oscar monologue, “How come there’s only unemployed people that tell you to quit something?”) but also that his opening monologue would be addressing the #OscarsSoWhite controversy in a big way.
“I’m here at the Academy Awards, otherwise known as the White People’s Choice Awards,” Rock said, shortly after taking the stage, to the overwhelmingly white audience, resplendent in a white tuxedo jacket. His harshest phrase was probably, “This year, in the ‘In Memoriam’ package, it’s just going to be black people that were shot by the cops on their way to the movies.” But Rock’s most memorable line followed up immediately on his assertion that the motion picture industry is indeed racist (“You’re damn right Hollywood is racist”) even though it’s populated by “the nicest white people on earth” – Hollywood liberals. Rock insisted that while Hollywood isn’t “burning-cross racist” or “fetch-me-some-lemonade racist,” it is “sorority-racist,” as in, “We like you, Rhonda, but you’re not a Kappa.” To put a finer point on it, Hollywood and its denizens like to consider themselves utterly progressive, strong and courageous in furtherance of the progressive cause while unwittingly wallowing in their bias blindness.
“We want black actors to get the same opportunities as white actors,” Rock explained, echoing Viola Davis’s memorable Emmy speech last fall: “The only thing that separates women of color from anyone else is opportunity. You cannot win an Emmy for roles that are simply not there.” It was a brilliant opening with the added benefit of allowing us to see the reaction shots of A-list celebrities looking very uncomfortable.
Later in the show, Rock used various sketches to pound his message home again and again. Most powerful was a series of man-on-the-street interviews by Rock with moviegoers in Compton that exposed the wide gulf between non-white audiences and the nominated films. For example, when asked about Bridge of Spies, one woman responded incredulously, “Where are you getting these movies from?” And then, “You’re making up stuff. You’re messing with me right?” But every single interviewee acknowledged seeing Straight Outta Compton, an Oscar snub featuring many strong reviews and a predominantly black cast.
In an effort to mitigate the damage, the Academy clearly aimed for diversity in its choice of presenters and performers, about one-third of whom were people of color, including Morgan Freeman, who presented the Best Picture award. Cheryl Boone Isaacs, president of the Academy of Motion Picture Arts and Sciences, also felt the need to come onstage during the broadcast to explain changes to the Oscar process to try to increase diversity. But the winners, like the nominees, necessarily remained oh-so-white.
As the show ended, Rock signed off by saying, “Black lives matter!” Then, “Brooklyn!” In case anyone thought he was referring to the Oscar-nominated film of that name, the credits rolled to the sounds of Public Enemy’s Fight the Power, the anthem he had entered to as well.
Rock’s reviews were mostly positive, but far from everyone agreed that Hollywood is racist. Famed director and three-time Oscar winner Steven Spielberg was one. “I don’t believe that there is inherent or dormant racism because of the amount of white academy members.” Best Actress nominee Charlotte Rampling claimed that calls for an Academy Awards boycott were “racist to white people,” a comment she no doubt would like to take back. Two-time Oscar winner and six-time nominee Sir Michael Caine said that, “I think, in the end, you can’t just vote for an actor because he’s black.” But the apologists for the Hollywood system spectacularly miss the point.
Academy Award-winner (and four-time nominee) as well as noted Hollywood liberal and nice guy Matt Damon told reporters at the Sundance Film Festival that the Academy’s move to diversify its voting membership is “a wonderful first step,” but noted that there’s still “a long, long, long way to go.” But that was the very same Matt Damon whose comments last fall on diversity during the fourth season premiere of HBO’s “Project Greenlight” make Chris Rock’s Oscar point perfectly. Damon sparked controversy after the actor interrupted a (black female) colleague’s concerns about the need for diverse hiring practices only to dismiss them. In the reality show, new and emerging filmmakers are given a chance to direct a feature. Show producers Damon and Ben Affleck enlisted a group of other Hollywood producers to help them choose their director finalists. Not surprisingly, the group included a bunch of white guys, just one white woman and no people of color. The finalists were flown to Los Angeles to meet in person with the producers. At these meetings, they introduce Effie Brown, an experienced Hollywood producer and a black woman, to the mix. Watch what happened.
Note the Damon quote (which is not completely captured in the video above): “I’m glad Effie flagged the issue of diversity for all of us, because filmmaking should throw a broader net and it’s high time for that to change. But ultimately, if you suddenly change the rules of this competition at the eleventh hour, it just seems like you would undermine what the competition was supposed to be about, which is about giving somebody this job based entirely on merit, and leaving all other factors out of it. It’s just strictly a filmmaking competition. I think the whole point of this thing is that you go for the best director, period. This is what we have and this is what we have to choose, and the only thing I can go by is the work that they’ve done.” Brown later acknowledged that the edited version that aired (and which is shown and quoted above, in part) was more benign that what happened in real time: “That was a more polite version of that exchange.”
It seems clear that Damon was convinced of his own pristine purity as well as his team’s lack of bias and, therefore, there could be no problem with his simply picking the “best” candidate. Then – surprise! – they picked a white male for the highly coveted directing assignment. Indeed, Damon and Affleck selected a top four and each of them was white and male. Damon never considered the possibility that he – like all of us – is afflicted with a variety of inherent biases and is utterly blind to them. As Chris Rock so succinctly put it, Hollywood may not be as clearly and aggressively or even intentionally racist as in times past, but it remains “sorority-racist,” as in, “We like you, Rhonda, but you’re not a Kappa,” or “We like you, minority director X, just not as much as these guys who look more like us,” or “We’re not racist, we have black friends.”
The poet Alexander Pope put it about as simply as possible: “To err is human.” The Apostle Paul’s related point was theological: “For all have sinned and fall short of the glory of God.” Matthew Henry, in his Commentary on the Whole Bible (1708), made a moral judgment by explaining that there are “none so blind as those who will not see.” Canadian writer William McDonnell, in his novel Family Creeds, was less concerned with blame and more focused upon false certainty: “There are none so positive as those who are but half right.” And, as Orson Wells threateningly intoned about the narrative overlay of pretty much all we do and are in the sort-of documentary F For Fake, “almost any story is almost certainly some kind of lie.”
The obvious conclusion should be clear to all of us. We are all deeply flawed. Some of our woundedness is self-inflicted. Some of it is unseen and unknown to us, even after the fact. And some is simply self-descriptive. All is utterly human.
Nobel laureate Saul Bellow’s A Silver Dish is a masterful short story about a South Chicago tile contractor named Woody Selbst who is moved by honesty but unsure how he can and should mourn his con artist father, who “wanted what he wanted when he wanted it.” Pop didn’t just abandon Woody and his family when the boy was a teenager, as Pop himself had been abandoned. Woody even “bankrolled his own desertion,” a cruel ruse perpetrated by a father that permanently thwarted his son’s ambitions in the process. Bellow’s story ends as Pop pulls off one last con on his deathbed. Woody’s conclusion is expressed in this simple final line: “That was how he was.”
We’re flawed. That is how we are. But it isn’t a mere propensity. It is our default setting. It’s not intentional but rather an inherent condition. It abhors complex thinking and assumes that what we see is all there is. And, finally and devastatingly, these weaknesses leave no cognitive trace; it is mostly opaque to us.
For well more than five decades, the Nobel laureate Daniel Kahneman has been examining and explaining human attitudes and behavior. His disarmingly simple experiments and profoundly expert analysis have dramatically altered the way we see human reason. Philosophers and social scientists had assumed for centuries that humans are inherently rational. Kahneman’s powerful legacy (largely created with his late colleague Amos Tversky) comes in two parts. The first is that we are not nearly as rational as we tend to assume. Relatedly, we also aren’t as smart and skilled as we readily assume. We are routinely burdened by the “hubris hypothesis” (for example, as an important study found, physicians “who were ‘completely certain’ of the diagnosis ante-mortem were wrong 40 percent of the time”). Thus, as Martha Deevy, director of the Financial Security Division at Stanford’s Center on Longevity points out, “investment fraud works best on highly educated men, who think they’re too smart to be scammed.”
Up until a bit more than 40 years ago the study of economics – to pick a subject matter example close to home – was fundamentally based upon the idea that people acted in accordance with their own rational self-interest. That view has been utterly shredded by the evidence, essentially beginning with a 1974 Science article by Tversky and Kahneman arguing that common rules of thumb (mental shortcuts) lead to systematic and predictable errors and biases. As subsequent research has clearly (and often painfully) shown, people are inherently irrational creatures highly susceptible to such biases and errors held despite contrary evidence.
Thus homo economicus is a myth. This alleged “rational man” is as non-existent as the Loch Ness Monster, Bigfoot and (perhaps) moderate Republicans. Yet the idea that we’re essentially rational creatures is a very seductive myth, especially if, as and when we relate the concept to ourselves (few lose money preying on another’s ego). In fact, we tend to think that – personally – we’re almost superhuman in our ability to invoke reason to our advantage.
“What a piece of work is a man! How noble in reason! how infinite in faculties! in form, in moving, how express and admirable! in action how like an angel! in apprehension how like a god! the beauty of the world! the paragon of animals!”
Of course, there are some very good reasons to stand awestruck at what human reason can accomplish, particularly in the areas of science, technology and engineering. But we should also recall what became of Hamlet. We are much less rational than we assume.
We love to think that we’re like judges, objective and rational actors carefully examining and weighing the available evidence in order to reach the best possible conclusions. Instead, most of the time we’re much more like lawyers, running around in search of something (anything!) that we can manipulate to the advantage of our preconceived notions while ignoring or denying any and all contrary evidence. As John Kenneth Galbraith put it, “Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.” In other words, I’ll see it when I believe it. Or, to look at it from the opposite perspective, as the psychologist Daniel Gilbert has observed, disbelieving is very hard work.
Thus we remain hunkered down in our own ideological teams with our own echo chambers of alleged truth and right-thinking. As CBS President and CEO Les Moonves told CNN about television news, “people like to see people who agree with them.” If we aren’t really careful, we will remain convinced that we routinely see things the way they really are when the truth is much more complex. Most of the time we see things the way we really are and want the world to be.
The second part of Kahneman’s powerful legacy is more insidious and more vexing still. Kahneman’s great memoir of his life’s work, Thinking Fast and Slow, begins as follows. “The premise of this book is that it is easier to recognize other people’s mistakes than your own.” Or, in the careful prose of scientific research, “people who were aware of their own biases were not better able to overcome them.” Kahneman admits as much even for himself. “My intuitive thinking is just as prone to overconfidence, extreme predictions, and the planning fallacy as it was before I made a study of these issues.” As I note repeatedly, we might grudgingly concede that we hold views that are wrong. The problem is in providing current examples. Even worse still is the unfortunate and shocking reality that the smarter and more self-aware we are the more vulnerable we are to these sorts of errors. Bias blindness impedes us all.
Warren Buffett put it really well. “What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact.” And who better to demonstrate it than Dr. Sheldon Cooper?
“Don’t you think if I were wrong I’d know it?”
We all tend to share this foible — the inability to recognize that we suffer from the same cognitive distortions and behavioral biases that plague other people. As one prominent piece of research puts it:
“We cannot attribute [our adversaries’] responses to the nature of the events or issues that elicited them because we deem our own different responses to be the ones dictated by the objective nature of those events or issues. Instead …. we infer that the source of their responses must be something about them.”
In essence, if we believe something to be true, we quite naturally assume that those who think otherwise are the ones with some sort of problem. Our beliefs are deemed merely to reflect the objective facts simply because we think they are true. Our thought process goes something like the following.
“I’ve thought long and hard about it [biases leave no cognitive trace, after all] and I’m convinced I’m not a bigot. Some of my best friends are __________.”
Of course, that line of thinking works really well internally but doesn’t convince anybody else. The research again:
“We are not particularly comforted when others assure us that they have looked into their own hearts and minds and concluded that they have been fair and objective.”
“Of course not — they’re biased (but I’m not).”
It’s the same kind of thinking that allows us to smile knowingly when friends tell us about how smart, talented and attractive their children are while remaining utterly convinced as to the objective truth of the amazing attributes of our own kids.
Since it was uploaded Tuesday morning, the above video – which purports to tell the story of rock ’n’ roll through a cool, clever and creative mash-up of 348 different rock stars, 84 guitarists, 44 drummers and 64 different songs – has been going viral, posted by sites such as Mashable, Fast Company, BroBible (which claims it includes “every notable act”), Team Rock and Gizmodo, and being named a “Staff Pick” by Vimeo. Both Mashable and Laughing Squid praise the video for being “comprehensive,” while the Canadian music site Exclaim! exclaims, “This Video Will Make You a Rock Music History Expert in 15 Minutes.” If you’re of a certain age (as I am), you’ll recognize essentially all of the great artists included even without the helpful explanatory faux Facebook postings, doubling the pleasure.
But as pointed out by Slate, this seemingly harmless and engaging trifle is more than a little offensive and a lot just plain wrong. The whole video only includes two bands with black artists in them – the Jimi Hendrix Experience and Rage Against the Machine. No Slash. No Sly & the Family Stone. No Billy Preston. No Lenny Kravitz. No Isley Brothers. No Temptations. No Four Tops. No Spinners. No James Brown. No Michael Jackson. No Earth, Wind & Fire. No Ray Charles. No Prince. No Tina Turner. No Stevie Wonder. And it’s even more male than white. Perhaps worst of all, except for the Slate piece, nobody seems to have noticed.
Now, before you start in with excuses – like trying to force a clear distinction between rock ‘n’ roll and R&B – note that the video pretends that rock ‘n’ roll started with Elvis and was pioneered exclusively by white artists. No Little Richard. No Ike Turner. No Sister Rosetta Tharpe. No Fats Domino. No Big Joe Turner. No Bo Diddley. No Chuck Berry (but for a “post” that Jimi “likes” him).
There are no plausible excuses. Unless the video producers set out to be racist (which I doubt), it seems that the producers were simply blind to their inherent biases (just like Matt Damon).
Kahneman’s conclusion – which entirely accounts for the example above – is a depressing one indeed, especially when we carefully consider its implications. “Most of us view the world as more benign than it really is, our own attributes as more favorable than they truly are, and the goals we adopt as more achievable than they are likely to be.” Even worse, the research also shows that the more objective people think they are relative to others, the more they are likely to support violent solutions to problems (such as wars), and the more hostility they show towards people who disagree with them.
The world is almost always more biased than we think. For example, job applicants with seemingly “white” names (like Emily or Greg) need to send about 10 resumes to get one callback while those with apparently African-American names (like Lakisha or Jamal) need to send around 15 resumes to get one callback. And males enrolled in undergraduate biology classes consistently ranked their male classmates as more knowledgeable about course content, even over better-performing female students. Or consider a recent study on racial discrimination and NBA referees which found that white referees called substantially fewer fouls on white players and black referees called substantially fewer fouls on black players.
All of this is consistent with in-group favoritism, whereby members of a group favor their own over outsiders in evaluations, resource allocation and more. It applies to friends, teams, clubs, schools, towns, political parties, ethnic groups and even nations. It also applies to police investigations and judicial decisions. Bias persists even for matching gender and ethnicity. We are inherently tribal.
Like Matt Damon, most of us think we’re unbiased and, as such, in cases like that in Project Greenlight, need simply choose the person we think is best to act in an unbiased way. But because bias is so insidious and because it leaves no cognitive trace, it always remains highly likely that bias remains a factor in our decision-making. Damon and Affleck may indeed have chosen the best directors available to them and the motion picture Academy may have chosen the best performers from 2015 – all of whom just happened to be white. They probably believed that they had intended to be and in fact were fair and balanced. But especially because art and taste are inherently subjective, it’s impossible to know for sure. There’s no clear way to check their work. That said, the data suggest otherwise.
A study by the Directors Guild of America, released in January 2015, found that 87 percent of 487 first-time directors in network TV (over five seasons from 2009-13) were white while women made up 18 percent of those first-timers, both far outside their demographic distributions. “Every director needs a first shot to break into the business,” DGA president Paris Barclay said at the time. “What this report reveals is that studios, networks and executive producers need to challenge their own hiring practices and offer talented women and minority directors the same opportunities they are giving white males.”
Even when we don’t think we’re biased and are sure that we’re committed to avoiding bias, we probably are. That’s why Damon’s conclusion was so tone deaf to minorities and so misguided. We must act aggressively to counter bias even when we’re sure we don’t have any.
Scientist Vivienne Ming and her team have analyzed huge amounts of data and calculated the average cost – she calls it a “tax” – that women, people of color, and other minorities pay for the extra education, training, and experience they need to get the same jobs and promotions as straight white men. It’s the cost of being different. For example, women in the U.S. tech industry pay a tax of between $100,000 and $300,000. If you are different, Ming says, “you have to go to better schools for longer and you have to work for better companies to get the same promotions, to get the same quality of work.”
It’s a tax, Ming continues, that doesn’t pay for anything, like roads or schools. In scientific terms, “it’s heat loss in our economy,” she says. Worse still, the tax is superlinear, which means that a black woman pays more than a white woman and a black man combined. In a truly sad summary, Ming adds that, “We are bad at valuing other people and we are worse the more different they are than us.” Accordingly, “Discrimination is not done by villains,” she says. “It’s done by us.” To paraphrase Bellow again, that is how we are.
Crucially, Ming argues, ‘[t]he tax is largely implicit. People needn’t act maliciously for the tax to be levied.” Thus “we are requiring different levels of proof without realizing it. ‘I’ll hire José…when he’s sufficiently proved his value.’ Imagine how many Josés gave up long before that point in the process, disincentivized by the enormous tax they sense ahead of them.” This is precisely Effie Brown’s point to Damon. Ming estimates the economic cost of this unrealized human potential to be nearly $1.5 trillion per year. Indeed, “reams of research” establishes that there is tremendous “bottom line value” to real creative diversity.
This tax weighs particularly heavily on the financial services industry. Wall Street is overwhelmingly white and male. Black financial advisors who worked for Merrill Lynch reached a $160 million settlement for racial discrimination back in 2013. Financial services as a whole is 76 percent male, even though women are decidedly better investors than men (they aren’t nearly as likely to harbor what Kahneman calls the “illusion of skill”). Nearly 80 percent of the nation’s financial advisors are white (even though only 63 percent of America’s population is) while only 8 percent are black and only 8 percent of financial planners are from any minority group. Asset managers are at least as bad (nearly 90 percent of senior money managers in the U.S. are white while African Americans make up just 1 percent of top investment roles) and hedge funds are even worse.
A 2011 report on workforce diversity by SIFMA surveyed 18 large financial services firms and found that only 8 percent of financial advisors at those firms were “people of color.” And at independent financial advisory firms, African-Americans most likely make up just 1 to 2 percent of all advisors, according to industry executives interviewed by Financial Planning. Yet in an Investment News survey of more than 700 advisers, only 36 percent of whites agreed or strongly agreed that diversity was a problem in the industry and, quite obviously, many fewer are doing anything about it as only 27 percent of respondents report any attempts to foster diversity at their firms. Moreover, a lack of diversity makes us susceptible to affinity fraud.
No one should be surprised that there is an entirely human, often unconscious tendency to associate with, do business with and hire people who are in our networks and who thus tend to look the same as we do. But such in-group favoritism is a big mistake. If we aren’t prepared aggressively to try to make our lives and our businesses more diverse because it’s the right thing to do or because we have decided that the routine biases to which we are all subject simply don’t apply to us, we might consider doing so to be more profitable.
Study after study show that firms with diverse leadership perform better. Diversity improves decision-making at the firm level and companies with more diverse workforces are more profitable (more detail here, here and here). Indeed, racial diversity is associated with increased sales revenue, more customers, greater market share, and greater relative profits while gender diversity is associated with increased sales revenue, more customers, and greater relative profits. We don’t often do it naturally, but real diversity is worth going way out of the way to achieve. Yet at our current pace (for example), it will take another full century for the U.S. to achieve gender parity in the C-suite. Meanwhile, programs that encourage gender diversity in hiring and promotions still center their narratives on men in precisely the same way that movies focusing on blacks fighting for equality are so often told from the perspective and with the support of a saintly white person.
From an investment perspective, we all understand the value of diversification. Bear that in mind while taking a look around. If your reading lists, your colleagues, your friends, your department or your firm aren’t at least as diverse as you want your portfolio to be, you’re missing a major opportunity and making a major mistake. I dare say they probably aren’t. Chris Rock is right – and we should all be working actively to change that.