Greed Is Good (Unless You’re Human)
Monkeys = Selfish Humans
Economists are obsessed with the idea of ‘Homo Economicus’: a model of human behaviour which assumes that we are rational, self-interested and able to make judgments which lead to our desired ends. This is the backbone of Economic thinking, and explains a surprising amount of human behaviour. However useful this is at predicting behaviour in aggregate, calculating what Homo Economicus would do and comparing it to the real world throws some exceptions: people tip waiters they are likely never to see again, they hold the door open for strangers, they donate money to victims of far off tragedies and put themselves at risk to help those in danger. Even staunch Nihilists have good manners… absence a belief in God or Karma, why would a person make a decision that benefits a stranger, particularly if it is at his or her own expense?
Hardcore proponents of Economics (particularly if they read too much Ayn Rand before bed) go as far as compelling people to act more like Homo Economicus in the interest of economic efficiency: to quote Gordon Gecko “greed is good”. This isn’t as horrifying as it sounds. With everyone acting in our self-interest, society becomes more productive and generates an economic surplus—the basis for our capitalist society. As the great economist Adam Smith explained that “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”. The opposite, working selflessly for the good of the nation (aka Communism), historically hasn’t turned out too well.
The super market
Before you head to the comments to quote Marx at me, consider this simple example: think about choosing a till at a supermarket. You can see all of the tills, how many people are in each queue and roughly how many items they have. From this you make a little estimation in your head and choose the queue that is likely to keep you waiting the least. In this situation you do not care about the other people in the queue, you just care about yourself and your free time. However, the result is remarkable: people arrange themselves naturally into the most efficient order, minimising the average time waited across the whole supermarket, with surprisingly minimal threat of violence. Self-organisation is a powerful concept — on a trip to Texas, Boris Yeltsin took an unscheduled detour and was bowled over at the efficiency of a local supermarket — he couldn’t believe the variety, the low cost and the short lines for checkout. He couldn’t believe that the manager was educated only to high school level, yet could run such a superior system. What was alien to him at the time, was that the manager didn’t need to perform complex calculations to determine the most efficient and fair way to organise the lines for the checkout — the manager just had to step back and let the shoppers act in their own interests.
If selfishness is an efficient and effective way to organize our society can we all gain by being a bit more selfish? Is there a place for altruism in the cold light of the market? There is no doubt that organization around self-interest can be hyper-efficient, but is our aim really to be hyper-efficient? In truth our goal is survival —your own survival being tantamount, then your family, your clan and eventually your species. Being super-productive is obviously useful, but there may be ways to survive that don’t involve productivity. There is evidence that as a species we’ve used our altruism as a survival superpower — a way to hack the system and dominate as a species.
Is it fair to be fair?
Economic studies regularly involve a test called the ‘ultimatum game’: there are two players, the proposer, who divides a payout of $100 between the two, and the decider, who either accepts the division, or rejects it, leaving both with nothing. In this game, Homo Economicus would never reject; anything offered is more than he had before. However studies consistently show that humans tend to reject offers lower than $20 to punish an unfair allocation. Why would we do this? Even a dollar is better than nothing. It also doesn’t make sense to offer anything more than a dollar as the proposer — you’re giving them something at least. In actuality the average proposal was between $40 and $50! This clearly shows human capacity for altruism, and a sense of fairness — both the offering of the money and the threat of punishment in an unfair allocation show that humans prefer to be fair.
While this is interesting, it becomes way more so if you adapt the game… for chimpanzees! Involving a system of ropes for decisions, and grapes as a reward (and possibly several utterances of the phrases “you stupid monkey” and “damn dirty apes”) researchers re-created basically the same game. The incredible result is that the apes actually behave like homo economicus would — they rarely rejected offers above zero and they displayed no regard for the rewards the other chimps gained. This is remarkable because, as our nearest living relative, chimps are relatively intelligent — relatively speaking one of the few things that separate us is this sense of fairness. To me the clear implication is that our willingness to stick to our principals and punish the injust at our own expense has a lot to do with our success as a species.
It’s good to be good
With this in mind, our society becomes a mind boggling achievement of human-y goodness: the fact that I can walk out of my house, take a bus to the city centre, buy a mocha and sit on a bench in the market square drinking it without high risk of being savagely attacked, is only possible thanks to those heroic people who, at intervals in history, punished injustice at sometimes great cost to themselves. Over time we’ve self-selected for generous, non-violent people — shunning offenders and putting those that think with their brains rather than their fists in charge. Without this selfless altruism, no science would ever get done and no progress would ever be made. Why invent something if someone’s just going to bash you over the head and steal it? Monkeys might use tools but they don’t have any incentive to build something permanent, or to pass on that knowledge — the stronger monkeys will just take it away.
Sure the vast majority of us should stay relatively selfish for efficiency’s sake (happy to keep doing my part), but without people fighting in wars, arresting criminals, whistleblowing, standing witness in court, enforcing queues, shouting at litterers and dressing up in bat costumes, civilization just wouldn’t be possible. It is not enough to co-operate with those we trust and know closely. This doesn’t go far enough to allow us to exist comfortably in anything other than a small cave at best. For civilization to develop over the ages there had to be people with a sense of purpose larger than themselves, who have consistently deterred potential criminals, leading by example and removing selfishness slowly from the gene pool… so while you sit in your warm and relatively poorly defended home recovering from the decadence of the weekend, spare a thought for all those anonymous heroes who made our society possible.
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