Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.

 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate


On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.


RSS 2.0

Reduce demand to limit supply: the economics of hate

By Andrew Leigh and Justin Wolfers - posted Tuesday, 12 November 2002

In the wake of the Bali bombing, Australians have confronted the difficult question: "Why do they hate us so much?" while politicians have asked, "What can we do to stop this happening again?" Yet these questions are two sides of the same coin: to determine how to respond to October 12, we must first understand its causes.

While intellectuals have often claimed that hatred defies comprehension, a recent study by Harvard economist Edward Glaeser argues just the opposite – contending that the market for hate is amenable to economic analysis.

Hatred, Glaeser argues, is supplied by political entrepreneurs to satisfy demand from citizens. Extremist political figures sow hatred against minority groups as a means of gaining political support. Why? Because redistributive policies help one group, but harm others – politics usually requires tradeoffs. Yet by fostering hate, politicians can get credit for both those they help and those they hurt.


The supply of hate can be directed not merely against minority groups, but also against powerful outsiders. As Glaeser points out, there was very little anti-Americanism in the Middle East in the 1950s and 1960s. But following the US-backed coup in Iran, and subsequent support for the Shah, opposition politicians were able to exploit anti-Americanism to undermine their more moderate opponents.

How can hatred be tackled? Economics tells us that raising costs can lower demand. Glaeser notes that hatred usually involves extreme characterisations of the hated, and as such, repeated social interactions can make the beliefs of haters both more costly and harder to sustain.

Another effective way of reducing hatred is by turning the very same emotional mechanisms against the haters themselves – Glaeser terms this "hating the haters". The images of Ghandi’s supporters being clubbed by British troops in India, or of Martin Luther King’s followers being attacked by hoses and police dogs, fuelled hatred against the perpetrators of such violence. When these self-correcting forces are absent, hatred is likely to prosper. Australia is an outsider in Indonesian politics, and as Glaeser’s analysis predicted, hatred has prospered.

Since it appears likely that some element of anti-Australianism was behind the attack in Bali, we believe that there are three lessons our policymakers can draw from Glaeser’s research.

The first is that we should raise the "cost" of hating Australians by increasing the number of interactions between ordinary Indonesians and ourselves. While it may be prudent for some Australians to leave now, it is in our long-term interest to foster closer social and cultural ties between our two nations. This may also be an opportune time to expand Radio Australia’s Indonesian language services.

Second, by eliminating arbitrary redistribution between groups and requiring equal treatment, the rule of law reduces the scope for policies that profit from hate. As the International Crisis Group pointed out in a report released two days before the Bali bombing, rivalries between the Indonesian army and police are rife. Australia should consider providing resources to help build the troubled Indonesian police force, with the aim of re-establishing the rule of law, and thereby reducing the scope for hateful policies.


The third lesson is perhaps the most counter-intuitive. Because of the way in which hatred is fostered, Australia should avoid being seen to publicly oppose fundamentalist Islamists. Doing so only makes it more profitable for fundamentalists to exploit anti-Australian sentiment, instead of seriously engaging the issues.

When we contacted him this week, Glaeser argued that Australia faced the same challenge in Indonesia as the US does in the Middle East: "I think that the worst thing that the US can do, from a hatred point of view, is to embrace the moderate Iranians. As much as we in our hearts applaud what they are doing, by publicly supporting them, we doom them." For Australia, Glaeser’s view was that this meant that we should be perceived as "supporting both sides". He suggested that Australia might want to "publicly appear to radical Muslims and talk about how while you condemn violence, you support their rights".

Thinking about the factors underpinning the supply and demand of hatred is a complex and uncomfortable exercise. But we are now in a year of living dangerously, and Australian policymakers must understand the factors that produce hatred before they decide how to respond.

  1. Pages:
  2. Page 1
  3. All

This article first appeared in the The Australian Financial Review on 1 November, 2002.

Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

Share this:
reddit this reddit thisbookmark with Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Authors

Andrew Leigh is the member for Fraser (ACT). Prior to his election in 2010, he was a professor in the Research School of Economics at the Australian National University, and has previously worked as associate to Justice Michael Kirby of the High Court of Australia, a lawyer for Clifford Chance (London), and a researcher for the Progressive Policy Institute (Washington DC). He holds a PhD from Harvard University and has published three books and over 50 journal articles. His books include Disconnected (2010), Battlers and Billionaires (2013) and The Economics of Just About Everything (2014).

Dr Justin Wolfers is an Assistant Professor of Economics at Business and Public Policy Department of the Wharton School, University of Pennsylvania.

Other articles by these Authors

All articles by Andrew Leigh
All articles by Justin Wolfers
Related Links
Andrew Leigh's home page
Justin Wolfers's home page
Malcolm Weiner Center for Social Policy
Stanford Business School
Photo of Andrew LeighAndrew LeighPhoto of Justin WolfersJustin Wolfers
Article Tools
Comment Comments
Print Printable version
Subscribe Subscribe
Email Email a friend

About Us Search Discuss Feedback Legals Privacy