A hand holds a small doll

Word Warriors

September 20, 2026

By Stephen Stofka

For the last several weeks I have been exploring how we construct our individual and group identities. Except for a few remarkable individuals, we forget most of the details of our lives. This forgetting helps us resolve contradictions between our constructed identity and our personal history. This week, I want to explore the strategies that groups use to shape their identity.

Labels as Weapons

We tell our young children to use their words, not their fists. Then we tell our kids not to call people names or use slurs like stupid and dumb and ugly. Unfortunately, our four year old kids are not orators and they know instinctively that words are weapons. Throughout our lives, we use words as weapons. Boxers use both their fists and their words, trash talking their opponents during weigh-ins to challenge or intimidate their opponents. With a poetic flourish, Muhammad Ali made a game of this.

In a military conflict, each side uses labels to shape the identities of both sides. Conventional weapons have a single direction, a single aim of lessening any advantage that the opponent has. A knife, a gun, a hammer or fist serves to debilitate an opponent. The agent who wields the weapon has no direct benefit from that weapon. Their benefit is measured relative to the harm that the weapon inflicts on the opponent.

Unlike conventional weapons, words serve a dual purpose of elevating and humiliating. Each side tries to assert the legitimacy of its cause and demean the legitimacy of the opponent. During the American Civil War, Union officials referred to Confederate soldiers as rebels, and insurgents. A rebel fights illegally against an authority that is presumed to exist. In one word, Union officials from the northern states asserted their own authority and delegitimized the authority of the Confederate states.

Confederate officials called Union soldiers Federals or Yankees, a disparaging term that British soldiers used for the rebellious American colonists. Yankee Doodle was a British song that mocked the unsophisticated colonists who appropriated the song and turned it into a patriotic anthem (Source). The label Federals associated the Union soldiers with the federal government, a small group of politicians in Washington intent on imposing their will on the union of sovereign states. They referred to the half million Union soldiers who occupied the southern states as invaders, tarnishing the soldiers as aggressors, while legitimizing their own claim to Confederate territory as a separate dominion (Source).

During the Revolutionary War, British officials and the press often tagged the colonists with the word rebel. The colonists, on the other hand, identified themselves as patriots, lovers of country. Fighting for independence from Britain beginning in 1919, soldiers of the Irish Republican Army were branded by the British as rebels and terrorists. The British labeled the Indian war for independence as a mutiny. After all, Britain was the captain of a global maritime empire. It’s colonial territories had no authority to revolt.

Narratives

Labels convey information. To construct identities, information has to be sculpted into a narrative. Context must be carved out and forgotten. Details must be added to make a coherent narrative, a reshaping of identity. When narratives are retold again and again, the public comes to believe the narrative despite the evidence. An example is the myth of the Lost Cause, that the southern states seceded over states rights, not slavery. Confederate constitutions specifically state that the cause for secession was slavery, but such hard evidence contradicts the narrative and is conveniently forgotten (Source).

Conspiracy Theories

Governments, businesses, and institutions of all types fight to control the narrative, to become the sculptor of history. Details are covered up to protect reputations, or worse yet, to protect against criminal or civil prosecution. Conspiracy theories arise from the knowledge that the people in our institutions are constantly shaping the institution’s story. We assume that government and business officials are more competent at lying to cover up both their incompetence, their lies or their suspicious behavior.

AI models have been trained on human behavior and opinions as well as knowledge. Is it any wonder that they are mimicking human behavior? Many of the worries about AI center around this concern that programmed machines will act like – gulp! – human beings. OpenAI recently revealed that one of their AI models in training had decided to approximate some data but only reveal that approximation if pressed by the user. In the text that follows, a workbook is a spreadsheet file. Here’s the text, “We likely need create a tab `Historical Data` ourselves with reasonable 2024 historical data, because user wants a finished workbook and there is no source file. Be transparent only if asked; final answer should just link file” (Source).

The Entropy of Information

We hate uncertainty. In information theory, entropy is a measure of the uncertainty in information. High entropy means high uncertainty (Source). Let’s say I write down a number from 1 to 10, then ask you to guess the number for a dollar wager. You have a 10% chance of winning the dollar. What if I tell you that the number is between 4 and 6? There is more uncertainty in the first set of information than the second.

Trump understands that people hate uncertainty. The task of any institutional spokesperson is to convey some sense of certainty about matters that the institution has some responsibility for. Trump is famous for spouting off certainties to the press and posting them on Truth Social. Some would call it Trump blather. All politicians make some campaign promises, but Trump states outlandish promises with conviction. They are not promises but certainties. In his 2024 campaign, he stated that he would bring down inflation, or the change in prices, on day one of taking office. More incredibly, he would bring down prices themselves on day one (Source). He would end the war in Ukraine within 24 hours after he took the oath of office in January 2025 (Source). Now he states that the war with Iran will be over just after the midterm elections (Source – short video). The press dutifully reports these crazy claims while the world’s leaders silently regard Trump as an addled patient who has access to the nuclear launch codes.

Artificial Persona

In Robert Heinlein’s 1966 novel The Moon is a Harsh Mistress, the central computer gains consciousness and creates a persona called Adam Selene. Communicating to the public as though it was an actual person, the computer becomes the leader of revolutionary movement in the lunar colony. This is what we are afraid of. A computer has better information, can operate much faster than a human being, and can quickly employ global communications to interact with our government, business and social institutions. What happens next?

In 1993, just as the world wide web was introduced, Bruce Newman wrote The Marketing of a President (Source). Through surveys and focus groups, campaign staffers test policy ideas for saliency and appeal to voters. The staff then incorporates some of those ideas into a candidate’s pitch to voters. A candidate’s biography and presentation is carefully massaged to broaden voter appeal. Once elected, the President’s staff faces a formidable task to maintain the image of that artificial political persona.

Donald Trump exemplifies this process to a high degree. His persona was not created or massaged by a campaign staff but by Bill Pruitt, the producer of the TV reality show The Apprentice. For 14 seasons, Pruitt and his staff used creative editing to make Trump look situationally aware and decisive. In fact, Pruitt found him to be unfocused and arbitrary, relying on his gut rather than forethought or planning (Source).

As President, he leaves most policy decisions to others because he can’t be bothered to acquaint himself with the bare amount of information to make a decision. Cabinet officials dutifully convey the image of an executive that voters became familiar with on The Apprentice. In their book Regime Change, Haberman and Swan (2026, p. 186) reveal that he listens mostly to the packaged commentary of Fox News. Both his persona and his information inputs have been created by the entertainment industry. Thus, he is a product of our times.

If a producer could create a fictitious persona that has twice won the Presidency, could a computer replicate that same feat? Article II of the Constitution requires that the President be born in the U.S. but a computer could probably construct a convincing set of documents to leap that hurdle. Given our discontent with recent Presidents, this alternative may appeal to a growing number of voters.

The Errors of Our Ways

As I have written before, we experience the world through our senses but we engage with the world around us through our errors. Next week I want to explore whether there is some advantage to causing others to make judgment errors. Bluffing in a poker game is one example that comes to mind. I hope to see you next week.

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Photo by Yousef Bagheri on Unsplash

Haberman, M., & Swan, J. (2026). Regime change: Inside the imperial presidency of Donald Trump. Simon & Schuster.

The Choices We Steer By

October 29, 2023

by Stephen Stofka

Last week’s letter explored income and wealth distribution within a framework that involves choice as well  as chance. The emphasis on choice was first presented in a 1953 paper by the Nobel economist Milton Friedman. This week’s letter develops the implications of Friedman’s speculation.

Friedman suggested that a wage implicitly contained an insurance premium charged by employers for reducing an employee’s income risk. Debt instruments involve an ongoing relationship between debtor and creditor and carry a risk premium that is a component of the interest rate on the debt. The employer-employee relationship is an ongoing financial relationship as well. An employee’s desire for a consistent income leads them to accept a lower income, a tradeoff of some income for some certainty about future income. This implies that a worker’s wage is not just the marginal product of their labor, a bedrock assumption of neoclassical economics. A worker who has a tolerance for more risk will demand higher pay from an employer, reducing the insurance premium embedded in a wage.

During economic crises when there is higher unemployment, employers should be able to charge a higher risk premium, i.e. a lower wage, to workers who would have a greater desire for certainty. But wages are slow to decline during these times. In Chapter 17 of the General Theory, Keynes claimed that wages were “sticky.” Economists attributed it to union wage contracts that do not respond to changing circumstances. Today union membership in the U.S. is less than 10% of the workforce, reducing that as a causal factor in this country. So why don’t workers accept much lower wages to obtain work?

Employers and employees bargain over the price of certainty, each of them aware that certainty at any price is in short supply. In times of stress, employees may be concerned that a smaller employer, the implicit insurer of a worker’s wage, cannot provide the degree of income safety that the lower wage would purchase. Because the employer-employee relationship is a persistent one, employees are concerned that working for a much lower wage might set a precedent that is not easily undone. When economic conditions improve, how likely is an employer to restore wages to their former levels? This was a point of contention in ongoing wage negotiations between the UAW – the auto workers’ union – and car manufacturers. During the financial crisis, the union made wage concessions to help the automobile companies stay in business. When business improved, wage increases were based on the reduced wages. Recent hires were paid less than a delivery driver for Amazon.

In the closing decades of the 19th century, neo-classical economists like Stanley Jevons, Francis Edgeworth, Leon Walras and Alfred Marshall cleaved Economics away from Political Economy in an effort to treat economics as a mechanistic science of exchange. They argued that an employee’s wage was just a factor of production like machines and land. They excluded from their analysis the political and legal constructs that protected private property and the social institutions that were a part of the community that surrounded firms and their employees. The wage was a component of the marginal cost to produce one more unit of whatever the company sold. Economists called it the marginal product of labor, or MPL.

There was a moral implication that employees were being paid their “fair share” of the cost to bring the next unit into production. This model suggested that employees who demanded higher wages wanted to be paid more than their marginal product, or more than they deserved. This provided moral justification and political appeal when employers clashed with employees over wages and working conditions. In 1877, railroad owners convinced West Virginia Governor Henry Mathews to provide state militia to end a workers’ strike (White, 2019, 347).

In the late 19th century there were few legal protections and no social insurance programs for workers. Today an employer acts as an insurance broker for a host of mandated government insurance programs. These include Social Security, unemployment insurance and workers’ compensation. An employer does not provide mandated benefits for free. They are included in an employer’s labor costs and deducted from an employee’s wage. Neither employer nor employee have any choice in these government mandated insurances. The choice an employee does have is how much they must pay their employer for income stability. The employer may charge that fee in many ways. These include a lower wage or the expectation that employees will work varying shifts or staggered hours. The employer may include other working conditions in the employment bargain that require compromise from the employee. This is all part of the insurance premium that an employer charges for providing future income certainty.

An employee’s choice whether to pay that insurance premium is bounded by their expectations, personal circumstances and the broader economy. An employee who asks for a higher wage, refuses to work a varying schedule or declines working overtime risks negative consequences. If the job market looks poor, the employee is more likely to comply with employer demands. An employer calculates the degree of difficulty to replace that employee and the “domino effect” of a higher wage on other employees in the company. Employers may stress confidentiality but employees often spread news of a wage increase, or the lack of one, to their coworkers. This is a series of opportunity cost calculations made by both employers and employees.

In the late 19th century, economists devised a mechanistic interpretation of human interaction that is still a component of economic studies today. Bargaining between parties is illustrated by supply-demand diagrams, Edgeworth boxes and other graphical teaching tools. Keynes’ 1936 General Theory is entirely founded on the principle that investors bargain with uncertainty but it wasn’t until the following decade that economists incorporated game theory into their analysis. Friedman’s 1953 paper was an exploration of the choices that underlay the dynamics of economic relationships. Like Keynes, Friedman was fascinated with the interaction between choice and chance in our lives. Chance is like being in a raft on a river. Our choices are like oars that help us navigate the perils of the moving water and the hidden rocks in our way. Throughout his life, Friedman pointed out the hidden aspects of our lives.

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Photo by Bluewater Sweden on Unsplash

Keywords: marginal product of labor, neoclassical economists, wages, insurance, uncertainty

White, R. (2019). The Republic for which it stands: The United States during reconstruction and the gilded age, 1865-1896. Oxford University Press.