Greed is an Excuse, Not an Instinct
Douglas Rushkoff, the author of Life Inc., is a guest blogger.
I've been getting lots of great (and some angry-but-still-great) email from bb readers contesting and inquiring about a couple of the contentions I made in the Life Inc. movie posted on Monday. The two main areas of concern are:
1. My seemingly romantic, almost "noble savage" argument that human beings have been corrupted by our economic institutions. Why can't I just accept the fact that people are greedy, and that the economy is simply a reflection of this natural human state?
2. The general sense that I'm disagreeing with accepted economic theory, or contradicting what passes these days for Econ 101. Why can't I accept economics and its premise of 'utility maximization' as a science - an explanation of nature - rather than a crudely arbitrary stab at game theory?
So I thought I'd answer those repeating questions right here, with an argument from the book. Right before this section, I explore the work of RAND and Beautiful Mind subject John Nash, whose experiments attempting to prove core human selfishness all failed because the secretaries of the RAND corporation kept making cooperative choices instead of selfish ones.
...from Life Inc:
Thanks to the combined emergence of a computer culture capable of recognizing the power of emergent systems and a rising class of dot- com workers profiting off what appeared to them to be the exploitation of a free- market technology, libertarianism was in ascendance. In reality, the phenomena we were all celebrating in the mid- 1990s had little to do with the free market; the Internet had been paid for by the government, and dynamical systems theory was much more applicable to the weather and plankton populations than it was to economics. But as profits and stock indexes rose, the stars themselves seemed to be aligning, and systems theory was as good a way as any of justifying the same options packages that young programmers would have been embarrassed by just a few years before, when they were anti-establishment hackers.
While computer programmers were finding jobs in Silicon Valley, social scientists and chaos mathematicians won contracts at corporate-funded think tanks. The Santa Fe Institute studied complexity theory, and applied its findings to the market. The "four Cs," as they came to be known--complexity, chaos, catastrophe, and cybernetics--now dominated economic thought.
Building on the work of Hayek, the new science of economics held that there was no global, central controller in an economy--only a rich interaction between competing agents. Order, such as it was, emerged naturally and spontaneously from the system--the same way life evolved from atoms or organization emerges from an anthill.
For those of us who had witnessed the Internet come to life or who had watched a simple fractal equation render an entire forest or ocean on a computer screen, the case for a bottom- up economy based on nothing but a few simple rules was compelling. If, as the anthropologists and social scientists were now telling us, human beings followed the same sorts of simple rules for self- preservation that ants and slime molds used to build their colonies and distribute scarce resources, then all we needed to do was let nature take its course. A great society would emerge much faster and better than it could ever be legislated into existence by intellectuals or social reformers.
Richard Dawkins's theory of the "selfish gene" popularized the extension of evolution to socioeconomics. Just as species competed in a battle for the survival of the fittest, people and their "memes" competed for dominance in the marketplace of ideas. Human nature was simply part of biological nature, complex in its manifestations but simple in the core commands driving it. Like the genes driving them, people could be expected to act as selfishly as Adam Smith's hypothetical primitive man, "the bartering savage," always maximizing the value of every transaction as if by raw instinct. Even the people who are crazy enough to behave differently end up testing new market strategies in spite of themselves. Best yet, according to Dawkins, "the whole wave keeps moving." In spite of local and temporary setbacks-- like what's happening in the United States at the moment--the trend is our friend, and undeniably progressive. Let her rip.
Freakonomics, the runaway best seller and its follow- up New York Times Magazine column, applied this model of "rational utility-maximization" to human behaviors ranging from drug dealing to cheating among sumo wrestlers. Economics explained everything with real numbers, and the findings were bankable. Even better, the intellectual class had a new way of justifying its belief that people really do act the way they're supposed to in one of John Nash's game scenarios.
Ironically, while the intelligentsia were using social evolution to confirm laissez- faire capitalism to one another, the politicians promoting these policies to the masses were making the same sale through creationism. Right- wing conservatives turned to fundamentalist Christians to promote the free- market ethos, in return promising lip service to hot- button Christian issues such as abortion and gay marriage. It was now the godless Soviets who sought to thwart the Maker's plan to bestow the universal rights of happiness and property on mankind. America's founders, on the other hand, had been divinely inspired to create a nation in God's service, through which people could pursue their individual salvation and savings.
As the best-selling Christian textbook America's Providential History explains, "Scripture defines God as the source of private property. . . . Ecclesiastes 5:19 states, 'For every man to whom God has given riches and wealth, He has also empowered him to eat from them.' . . . Also in I Chronicles 29:12, 'Both riches and honor come from Thee.' " America is God's true nation because it is the bastion of the free market through which He can exercise His divine will. Socialism (and American liberals) set up the state as provider instead of God. Bureaucrats end up intervening in the sacred relationship between the Lord and His creations, usurping His role, and interfering in the process of salvation. Charity is an opportunity for people--not governments--to care for their fellow men. Social-welfare programs, like evolution, implied that God had not created a perfect world in the first place. The free market, on the other hand, gave human beings the opportunity to exercise their free will in pursuit of personal salvation as well as a personal piece of God's good earth. No engineering or central planning was required.
The same right- wing think tanks writing white papers justifying game- theory economics through bottom- up social Darwinism were simultaneously advising conservatives on how to leverage Christian Fundamentalists in support of the resultant ideals. What both PR efforts had in common were two falsely reasoned premises: that human beings are private, self- interested actors behaving in ways that consistently promote personal wealth, and that the laissez- faire free market is a natural and self- sustaining system through which scarce resources can be equitably distributed.
For all the ability of genes and even memes to battle for survival against one another, human beings are just as likely to share and cooperate as they are to cheat and compete. But the ascendance of market rhetoric in America and Britain was accompanied by the assertion of some decidedly antiromantic science. University anthropologists seemed determined to correct the hopeful impressions that so many still clung to of peaceful, vegetarian gorillas enjoying one another's company in the jungle. Like stories of supposedly peaceful aboriginal tribes as yet untainted by corrupt Western civilization, such visions-- according to the new social Darwinists--were pure fantasy.
The people-are-actually-really-mean hypothesis was supported by the anthropologist Napoleon Chagnon's observation of violence among the Yanomami people of South America. Chagnon's documentary footage depicted tribesmen attacking one another with machetes. He demonstrated that the seemingly random violence had broken out along complex familial lines, supposedly proving that the tribesmen's genes were still competing for dominance. Buried deeper in his documentation was the real reason for these attacks: Chagnon had distributed a small number of machetes to just one of the tribes. The neighboring tribes wanted the machetes, too. Although the study has been argued over for decades now, the artificially introduced scarce resource was at least part of the reason they were fighting.
Paleontologists and social biologists such as Lucifer Principle author Howard Bloom present contagiously popular evidence of violence among competing gorilla and chimpanzee groups, going as far as to describe the steps by which a certain female chimp dashed out the brains of its rivals. That the chimps were fighting over rights to a human garbage dump isn't considered germane. Perhaps predictably, Bloom's follow- up work, Reinventing Capitalism, applies these same insights - ones I believe are skewed - to the market. He is not alone.Volumes could be filled (and actually are) with essays and studies about the violent, self-interested behaviors of monkeys and indigenous peoples, written by prominent scholars and directed to policy- makers and economists.
Just because many participants in leading intellectual forums such as The New York Review of Books or Edge.org (a website on which I participate) consider these proudly unromantic views of human nature more consistent with a godless universe doesn't make them any more true. More scientifically gathered evidence points the other way.
A South African archeologist and Harvard professor named Glynn Isaac based his own studies of human behavior less on abstract models or analogies with apes than on hard evidence from fossils and archeological digs. By focusing on the evolutionary record, Isaac showed how social networks and food sharing were the deciding factors in allowing early hominids to succeed over their peers. Researchers at Ohio State University studied sex- based size differences in human fossil remains, concluding that competition between males for mates was much less prevalent than earlier believed. "Males were cooperating more than they were competing among themselves," the researchers concluded.
Studies by psychologists at the University of Chicago in which researchers measured subjects' ability to see problems from the perspective of others demonstrated how "cultures that emphasize interdependence over individualism may have the upper hand." (In their conclusions, the psychologists noted the individualistic bias of Western corporations compared with those of Asia. A Texas corporation "aiming to improve productivity told its employees to look in the mirror and say 'I am beautiful' 100 times before coming to work. In contrast, a Japanese supermarket instructed its employees to begin their day by telling each other 'you are beautiful.' ")
While legends of violent meat- eating Homo sapiens vanquishing tribes of Neanderthals still garner rapt attention at dinner parties, there is little evidence that such events ever took place. On the other hand, there's plenty of evidence for the less dramatic assertion that a combination of tools, hunting, gathering, and food- sharing permitted what we now think of as civilization to evolve out of cooperative human activity. In certain circumstances, the tendency toward conflict with neighboring tribes inhibited survival, while cooperation within a social group and beyond promoted it.
We shouldn't be too shocked that the industrial world's intellectuals would be so prone to perceive humanity as driven by instinctual, self- interested violence. This behavior is as old as colonialism itself, and calls to mind wealthy plantation owners arguing that Africans were better equipped anatomically--by the Maker or by evolution-- to pick cotton. Today's equivalent, however well masked in scientific jargon, is no better supported by the facts. As a cultural mythology, however, it helps assuage any residual guilt the rich might feel over the inequitable distribution of wealth built into the existing economic order.
Or perhaps the wealthy obsess over what they hope is an entirely dog- eat- dog reality because their participation in the culture of money hasn't ended up making them any happier. According to a study conducted at the height of the market, 23 percent of brokers and traders at the seven largest firms on Wall Street suffered from depression--more than three times the national average. Scientists and United Nations sociologists alike have concluded that affluence produces rapidly diminishing returns on happiness. After achieving an income per capita of about $15,000, any increase in wealth makes little difference to a nation's total happiness metrics.
Among the six articles I found from Forbes in 2006 fiercely criticizing this "swath of studies" as well as the whole notion of "happiness research," none mentioned any of them specifically, or their findings. The libertarian think tank the Cato Institute similarly criticized these studies along with any attempt to measure subjective well- being--but concluded that even if they were true and money didn't make people happier, this would only support the libertarian position that wealth redistribution by government was unnecessary. Still others have criticized happiness research because it could lead to the implementation of authoritarian policies by central governments under the pretense that they were trying to make people happier.
But it's disingenuous to equate any critique of the theory of "rational utility- maximization" with efforts to construct a socialist welfare state. And it's especially cynical to do so while marketing and defending financial instruments intentionally designed to take advantage of consumers' irrationality when making economic decisions.
(after this comes a section on Behavioral Finance, and how credit card companies and banks used language to exploit what they know about our propensity to make bad decisions.)
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So, "Never attribute to malice that which can be adequately explained by stupidity"... right?
Doug, have you read The Lucifer Principle, by Howard Bloom? I found it an eye-opening read on why people are biologically predisposed to be a-holes.
Greed and cooperation are both instincts. The instincts themselves are the result of "cooperating" genes, their chances of replication are better functioning in concert than against each other. Sometimes they compel people to work together to exterminate their rivals.
You're ascribing morality to natural selection, and then equating the materialistic worldview with right-wing social darwinism. Dude, just stop.
There is a better way to frame your argument: Status-seeking behavior is an instinct, and it drives most of human society. But to promote it to the exclusion of everything else is pathological, like saying that because sex is good we should all masturbate constantly, or because food is good we should binge constantly. Right-wingers aren't wrong because they're greedy, they're wrong because they take their ideology to an aberrant extreme (in much the same way as the communists of yore).
I'm reminded of some of the questions that economist Russ Roberts has been asking in his Econ Talk podcast lately. I take it he comes from a libertarian perspective with a conservative bent (like a lot of economists) but he's been bothered by the failure of his own profession in the recent crisis. He's also been doing a series of podcasts on Adam Smith's Theory of Moral Sentiments, in which the father of free-market theory explains that people are not merely selfish utility maximizers, but must act according to conscience.
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#5 omg can you just leave boingboing please. more Rushkoff, less you. who cares about your bad attitude? go be mindboggling rude elsewhere you goon. christ.
btw, nm n cnmst bsds krgmn wh grs wth y. bryn cpln? dvd frdmn? ny rspctd cnmst nywhr? y sck, y'r lm, nd y'r fx-ntllctl wth nthng f vl t ffr. rlly, 'm srry t pt t s blntly, bt fr rl, bngbng sd t b gd, nw thrs ll ths nnsns n th frnt pg. whr's th cl shzz nd gdgts nd cry?
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bt vn f y wr rght, ths srt f thng s nt wht blngs n bngbng. hp tht, vn f y blck ths cmmnt, y t lst rd ths nd stp pstng bllsht.
ps-y sck.
Robert, have you read the above article, in which Rushkoff explains why The Lucifer Principle is so much high-tone bullshit?
Good grief, man. Did your momma not teach you an iota of manners? Would you say these things to his face?
I sense a disemvowelling.
Drum-roll, please...
BRBRBRBRBRBRBRBRBRBRBRBRBRBRBRBRBRBRBRBRBRBRBR
TSCH!
Would you say these things to his face?
of course not, this is the internet. I would smile politely and shake his hand and say "oh you know I was only kidding about those things I said". Then I would race home and blog about it.
I don't think people are corrupted by economic institutions; I think they're corrupted by social institutions. So the 'flavor' of the corruption is different these days because social institutions -- everything from the family to the nation states to (of course) the multinationals -- are increasingly dominated by economics.
Heck, even saving the planet has become largely an argument about how much it would cost.
As for economics itself, pah! My contempt is boundless. It's not a science, it's a fantasy. Now behavioral economics, that's a science.
Evolution neither requires Malthusian economic theory nor demands that Nature be red in fang or claw. Evolution requires only a certain genetic plasticity and a complex ecosystem in which that plasticity is expressed. By focusing on the Nouns Imperial, the Victorians twisted the natural world into taxidermy — hence, the bones of T. Rex enshrined on iron armatures in the lobbies of great museums. By concentrating on verbs drenched in time, evolution demonstrates a continuity of generation between T. Rex and the baka bird attacking its own reflection in my picture window this morning. Process is vastly more entertaining than watching obsessive/compulsive categorizers name the things they point at with the hidden digits of Adam (Smith).
Mr Rushkoff,
I find what your saying here interesting, but you have The Selfish Gene completely wrong. The whole point of it is that natural selection over evolutionary time-scales will lead to genes that promote their own "selfish interests" but that this doesn't necessarily scale to organisms (including people) doing the same. Indeed Dawkins spends many pages discussing the evolution of cooperation and the strength of collaborative strategies in game theory (specifically iterated prisoners dilemma, which can model all sorts of real world situations). As Dawkins has said himself, the stress in the title is on "gene", as opposed to "organism centred" understandings of evolution which struggled to explain why there aren't only "selfish organisms".
It's true that cut-throat laissez-faire fans did take the book as support for their ideas, and that certain critics accused it of encouraging the same. I can only assume that reading for comprehension was not their strong point. TSG is very much on your side here.
Conservatives' proclivity for black and white thinking forces them to choose between cooperation and competition. In the real world, of course, each has great value. A corporation is collaborative within but competitive in the market. A belief in savage competition as the sole driver of human behavior in the market is as silly as the Star Trek notion that we'd all have someday conquered our vices.
A common myth is that it's language that separates us from the animals, but animals have all the language they need. Their calls and signals work for their survival; from an evolutionary perspective it could not be otherwise. What does allow us to rise above a relatively wired existence is our unique ability to control learning, -we can teach ourselves and we can choose how we behave based on what we learn. Teaching and learning are primarily collaborative endeavors and certainly our hope is to progress as a society.
Collaboration has at least equaled the success of competition in getting things done. The market benefits greatly from our public investment in educated workers, basic research, transportation and rule of law -things we often point to when asked what makes America great (but that tycoons seem to forget!). Collaboration sent us to the moon; it is certainly not the weak half sister of competition.
As we learn time and time again, intense concentration of wealth brought about by greed, allowed or encouraged by an unfettered free market, is not sustainable -it always collapses. I simply see no good reason why collaboration, in the form of regulating activities we know bring misery to so many, should be barred at the door.
Mr Rushkoff, you may be interested in this book:
Primates & Philosophers - Frans de Waal
http://www.amazon.co.uk/Primates-Philosophers-Morality-Evolved-Princeton/dp/0691141290/ref=sr_1_1?ie=UTF8&s=books&qid=1242225046&sr=8-1
I'm hardly an expert in these things, but it seems to me you're presenting a number of strawmen. The "humans are naturally perfectly rational and endlessly selfish" meme (yes, I said it) hasn't been around mainstream economics for ages. Humans are extremely irrational, and everyone knows it. But we also tend to be irrational in fairly predictable ways, which also complement free markets well.
I also don't know what point you're trying to make by pointing to instincts for cooperation. Yes, we're evolved to cooperate. We're a highly social species. And societies which cooperate better (i.e., have more advantageous memes) have an advantage. Old news. What's your point?
And finally, the "happiness doesn't increase after basic needs are met" is, it turns out, not true, although it's certainly understand how that meme (number three!) would perpetuate itself, appealing to egalitarian values. However, there are diminishing returns, yes, and material wealth is obviously not the only factor (if, as with most day traders, you stress yourself to death to become as wealthy as possible at the expense of everything else, you're probably not going to be happy), but it really does help, on average. It's not just relative wealth within a society, either. I wish I could remember the study offhand, but I'm not making it up, I promise. It was most emailed on the New York Times for like a week.
Economics is one of the most flawed fields of academic study. Simple as that. Rational agent theorem underpins so much of it, and is ridiculous rubbish.
And so what was old is new again : Mutual Aid: A Factor of Evolution.
Also I don't see a tension between selfishness and cooperation. After all as a selfish individual I want to maximize my happiness and sometimes the best way to do this is to cooperate within a larger community. (See Stirner, Max) Greed on the other hand is a pathology, an insatiable beast. The greedy are never happy.
Nice, Doug!
Greed is a disease, a mental illness. If you have more than you need, store a little for lean times and give the rest to somebody else who needs it.
Now if you will excuse me, I have to go sharpen my chainsaw. My buddy Pete needs a dead tree removed ASAP... and Pete's always ready with his welder when I need him.
And, of course, in the so-called competitive market, collusion is rife. Adam Smith figured that out pretty quick.
I think you already nailed it in your fourth paragraph. People are pretty good at making a hash out of neat theories about how they will behave. Nash's work was in the context of the Cold War, and his brief was to figure out how to control or at least game large numbers of people through either fear or greed, right? The aim then was that enough people could be motivated negatively so as to overwhelm the number of those acting positively, and make for reliable control.
But the number of people acting positively, sooner or later, is just barely enough to tip the balance toward survival of human society (so far). And negative motivation made a mess of the GOP, with no end in sight.
So if a sustained effort, using the best brains of the time, to game the human condition essentially failed, then that's cause for optimism in my book. As is half a century or so of managing not to nuke, poison or infect our selves out of existence.
thanks for posting this, i might just read the book now, assuming i can get it at the library.
another book, orthoganal to but in regards to the happiness/basic needs issue, is "the health of nations" by kennedy and..Kawashi(?)
upshot: wealth disparities between rich and poor make everyone less happy and less healthy overall, even adjusting for the quality of social services across national and state boundaries. since ive just been in france on my honeymoon for about a month, it does not bode well for that country, what with the increase in wealth disparity and the trend towards greater privatization of the health insurance system.
Why am I leery of any arguments about "innate" selfishness or cooperativeness? (a) because it smacks of evolutionary psychology, which is for th most part bullshit (studies about children preferring "beautiful" adult faces, for example) and (b) because if we did real science, and looked at analogs in primate group behavior, we'd find that, for example, selfishness can be passed on as a cultural trait, and cooperation can be passed on too check this study of a baboon troop for an example.
This doesn't mean there isn't a "selfish" gene in us somewhere, but we can't take ourselves out of the context of culture and history to figure out if there's not a competing "cooperate" gene in us somewhere, so it's not really worth much to talk about us as if it had any real-world effect.
If we can lean anything from the Baboon troop, it's that a few powerful selfish assholes can influence large groups by dominance behavior, and that groups that don't have to knuckle under do because we're all easily pushed around by someone who's threatening and has perceived power. But we *can* undo that. After the violent males died out, the community of baboons was peaceful, and new males who were added into the troop from the outsde learned peaceful ways as well.
Alpha males don't have the best interest of the group in mind, they've just found a sustainable way to get what they want. Your CEOs, your politicians, your Popes, and so on are all on top, get incalculable benefit, and almost always do so via threats. Humans need to stop worshiping these people. That's our biggest flaw. If someone with a big enough metaphoric dick shows up, we're trained by our culture to fall to our metaphoric knees.
If there's going to be a sequel to Life Inc, it might want to to take a close look at how people who move money and power work, and how that maps into why we accept what they do, and what happens when we don't.
We are but monkeys with car keys.
Hay, Rushkoff: People tell me I am stupid and wrong all the time, and what I am doing is retarded. What this really means, is that you're doing something right, and you should keep on doing it.
Of course, I am not a well-known or even good writer, and highly un-qualified to be writing. For me, this means I should be doing exactly that.
Rushkoff:
1) You're creating a false dichotomy between greedy and cooperative. I would argue that humans cooperate because it's an effective strategy to get what they (as greedy humans) want. The existence of the "cooperation strategy" doesn't rule out greed, as you are claiming.
2) Ignoring the rest of his book, I found Steven Pinker's The Blank Slate to have compelling data when he made the case for the violent brutality of the savage human. I'd like to see you refute that data instead of picking on Napoleon Chagnon.
Tim Dellinger
@#18 Forkboy
Thank you for mentioning that selfishness and cooperation are not mutually exclusive. If it is in my best interest to cooperate I will. That is a selfish act.
@#14 Uncle Geo
This is the example of cooperation you are going to use? People cooperated to go to the moon while simultaneously in competition with the USSR in the form of the space race. Again cooperation and competition are not mutually exclusive.
The other issue I have noticed is the misunderstanding of the rational and value with respect to economics. When most people think of rationality they think of an action that is objectively rational. This is not what Mises is talking about in "Human Action". He makes uses the example of a schizophrenic's actions. To the schizophrenic, his/her actions are perfectly rational, but to the outside observer they are completely irrational. This doesn't change that the schizophrenic came to a reasoned and rational decision in his/her own mind with regards to a value attribution. The data was illusory however. This applies to emotional motivations as well.
With regards to value, we must remember that economics isn't simply about money, but the exchange of value. This is important, because value is subjective. If someone chooses to cooperate with their neighbors to his/her monetary detriment, it may be because they place a higher value on the opinions of their neighbors than they do on the money lost in the transaction. Or they may have a longer term objective where short term losses are translated into long term value gains, such as not having the police called on them by now friendly neighbors due to the occasional loud late-night party. Does this mean they are selfless, or that they value things differently than others and they are maximizing those values. That maximization of value may seem irrational to someone that doesn't value whatever is being maximized.
BZZT - some of us enjoyed reading Rushkoff's stuff. If you don't like something, don't read it (and why would you bother commenting on it?).
Beyond that, criticizing someone for being a faux-intellectual when you don't use capital letters, correctly puntuate your post, or address one of their points is pretty absurd. Despite what your post says, you're not hoping to affect any positive change; you're just being an arsehole.
Anyway, thanks Doug for the posts. Keep at it...
"The same right- wing think tanks... What both PR efforts had in common were two falsely reasoned premises: that human beings are private, self- interested actors behaving in ways that consistently promote personal wealth, and that the laissez- faire free market is a natural and self- sustaining system through which scarce resources can be equitably distributed."
These right-wing think tanks have obviously never heard of the biblical Ananias and Sapphira. The story built around these two characters entails a system of pure redistribution by a central authority.
I hate pure socialism as much as I hate unrestrained capitalism. Both rely on massive central authorities to relegate and regulate.
The gist of the article seems to suggest something I've often pondered which is; WHY is the current system of harried, stressed people carving out niches to serve harried, stressed people judged a normal and optimal form of survival?
People shatter in multitudinous pieces if one so much as suggests alternative forms of living and prospering as healthy humans. As if disconnecting the dreaded greed-leash is immoral and irresponsible and you are surely seeking massive power structures to implement a sordid vision (as if this is NOT what capitalism has achieved in the last several decades).
I just freakin love the fact that Rushkoff talks about the fundamental nature of being human and questions whether we can be different. I've always wondered why people didn't talk about this more. We go about pretending like we know everything. I love people who think new thoughts.
Now, what I see in the comments are lots and lots of people hanging on dearly to their Sacred Cow. Lots of different Sacred Cows, too.
Wherever Rushkoff's post tips over one of these Sacred Cows, the adherent of that Sacred Cow gets all up in arms over it being tipped over, and goes on an ad-hominem attack. Or at the very least, ignores the rest of the post and oversimplifies it down to, "Here's why Rushkoff is wrong for tipping over my Sacred Cow."
My impression: Rushkoff brings up several examples to make a complex point. Namely, that oversimplifications of complex behavior lead to wrong conclusions, and that various individuals and philosophies have horribly oversimplified anthropology as applied to greed.
--jpw
There is one link in the critique missing, that it takes a leap of faith to believe that selfish individuals would be rational enough kindly stick to the rules of the game instead of trying to cheat in some way.
Greenspan admitted:
"I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.
He suggested his trust in the responsibility of banks had been misplaced: "Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity (myself especially) are in a state of shocked disbelief."
@Moriarty: Are the banks acting predictably irrational when they fail to self-regulate? Maybe economists are being irrational when they expect market agents to act completely selfish but still stick to the rule of law.
selfishness is too narrowly defined by presuming that 'self' stops at the individual single person rather than as a representation of a collective. While "self" may, by definition, refer to one individual, the existence of "self" requires in a literal meaning the cooperation of countless individuals before you to come together, share chromosomes to form a relay team to pass on the genetic cocktail that becomes the self. As result, the things that motivate us to be "selfish" incorporate the things that are group-based.
A viking tribe will plunder together because it is logical to cooperate to maximize returns. The single individual is not relevant to define selfishness. Humanity must be the subject whose motivation is to be scrutinized and judged for the actions of the few. Because too often, the few relegate personal responsibility by using "greater good" as a motivator. Concentration camp guards did it, CEOs who fudge financial statements did it, and single mothers who prostitute themselves do it. Evil is not the presence of malice but the denial of truth in the name of the Light.
Touche' SKR, but my overall point is that both selfishness and collaboration are, and always will be operating in tandem on the market. In fact the Space Race is a great example of how competition and collaboration can work together. A huge investment in education and technology was responsible for the later success of countless businesses.
Both selfishness and collaboration can get out of hand if they completely dominate. I'm a leftie and, despite what Fox would have you believe, we lefties do not want to see the government own all the businesses. A mixture seems appropriate as it's going to happen anyway. The pendulum swings -I prefer that to it getting stuck.
A storm of words to hide the paucity of the ideas? And opposition is ad hominem'd before they are out of the gate: "right wing think tanks" and "fundamentalist christians." One gets suspicious.
The problem with the RAND secretary analogy is that there are strong incentives to co-operate with peopple in your immediate environment, less so on the other side of the world.
Comment #13 always says what I was going to say. Too many commentators on "The Selfish Gene" never got further than the title and assumed that it was a social-Darwinist tract.
Glad 0xDEADBEEF ad others have posted on the false dichotomy set up between people's cooperative behavior and the 'free market'. These are not exclusive in any way. Freer markets promote cooperation as much as it does any other behavior. It just promotes voluntary behavior over that coerced by the government.
I think the mistake is in your premise - Economics is not trying to be math, it's a social science. It's the sociology of money, and it only says that humans are greedy because as a whole, that's how we're currently acting.
Economics isn't assuming humans are inherently greedy, it is assuming that humans are CURRENTLY greedy as a whole - something that has surely been true for the last 100 years, even if it is showing signs of improvement as of late.
#7 - it's still there, and if you don't like something you can just choose not to read it. I do.
@#34 JMENDONSA
Economics is not the sociology of money. It is more the study of value, although even that is a little glib and narrow. Many people make this mistake since money is an abstract representation of value.
Well, the bzzt part is right. Play him off, Keyboard Cat.
Rushkoff, what was your process for writing this book?
Step 1: Make list of things you don’t like.
Step 2: Confuse cause & effect with irrelevance
Step 3: Find & blame a scapegoat
I had planned to buy your book, thinking that it would be an interesting exercise in thought experiments & re-examinations of history & economics - but after reading this excerpt, it’s clearly just charlatanism.
I'll pass.
You're all wrong. Economics is the major that you pick when you make the heartbreaking discovery that you're not smart enough to go into science or engineering. Then, you try to get into law school.
Maybe I'm not understanding the terms as used, but "selfish" and "cooperative" seem relatively orthogonal to me (and, it would appear, to several other commenters as well); one deals in motivations, while the refers to actions. For example, the vikings cited above are exhibiting cooperative behavior based on (I'm assuming) a selfish motivation. Are there domain-specific definitions of these terms that I'm missing?
As an English major (also one of those "not" smart enough to get a science degree), I must concur with #44's assessment of Economics majors.
I have Pre-ordered the book and am looking forward to reading it.
(Most) modern economics is more a fundamentalist religion - or at least a branch of (social) engineering than anything scientific.
#1 @MARLBOROTESTMONKEY7 - So, "Never attribute to malice that which can be adequately explained by stupidity"... right?
Don't forget the corollary: "Sufficient stupidity is indistinguishable from malice."
Isn't pointing out the affects of greed in regards to economics kind of like pointing out the effect of goals in playing soccer? You want a way to measure what works and whose plan (product, service, whatever) does better with similar inputs. If I spend (or invest) $1,000 with Company A and get $1,500 worth of value (or returns), it's inherently "better" than if I invest $1,000 with B and only get $87.50 back.
I'm not a particularly greedy person (I don't think), but if my boss offered me a 10% raise, I'd take it before thinking, "Hmmm... I wonder if it's in the best interests of my company, community and the economy for me to take this raise."
If my boss, however, said, "Here's the sitch... everybody can get a 10% raise this year, but to do that, we'll have to fire 10 people to cover the expense. What's your vote?" I'd vote to skip the raise and retain the 10 people, even if it was guaranteed that neither I nor my team would be affected. Why? It's better for the long-term health of the company.
So... maybe cooperation is just competition on a longer timeline or wider playing field.
We would not have made it to the top of the macro food chain had we not been a socially cooperating species. (Slap the greedy little kid upside the head, he'll learn to share.) What held/holds us together was/is our open rutting season and its consequent family bands/bonds. Almost unique among primates, excepting bonobos, we fuck all the time. Testosterone took us where we are today. That and picking bugs off each other.
Those nosey neighbors? Trade with them, marry them, or run them off the hill.
That's economics.
POI, chimps and bonobos and other apes are actually picking salt from sweat (not bugs) off each other (and then they eat it).
Picky-picky.
I wonder if you've read Barbara Brandt's _Whole Life Economics_? It explained a whole passel of alternatives to corporatism. It's a great map to a new economic system, a local and communitarian system.
When I was in high school, the whole "utility maximization" rationale for a market economy made sense to me. It was explained to me that a "planned economy" could never respond fast enough or smart enough to keep up with changes in supply and demand.
I now feel that there is no distinction between a planned economy and a market economy.
A market economy is still a planned economy its just that the planning is distributed over a network of many people. This network creates the illusion of an economy that moves according to scientific principles, but in fact its still prone to irrational buying and selling behavior.
If you put a hundred of people in a room and ask them to come to a consensus on something, most of the time the group will give you a reasonable answer. The problem is that this group will also come to a consensus if you ask them a question that has no right answer.
Sometimes people make stupid decisions en mass. When the prices of goods are set by the masses, then they will be subject to the whims of the mob. Mobs don't always act in their own best interests, and they can be misled.
I'm not saying a planned economy is inferior to a free market economy, just that the free market economy is not immune to bad decisions. It seems economists have a ways to go before they work that into their models.
Hayek did not write there was "no central controller." At the time of his writng, the USSR and Nazi Germany had some pretty strong central controllers. He wrote that central planning would fail because a small group of planners would be incapable of processing all the information needed to plan production of every good and service. Rushkoff's reading of Hayek is totally inadequate. Why am I not surprised.
Adam Smith wrote about self-interest. That's different from selfishness and greed. Self interest and the profit motive is not the same thing as greed.
Homo Economicus has been debunked over and over again by economists including Keynes and Mises, who is about as laissez-faire capitalist as you can get. You'd think Rushkoff would mention that. He's simply not a reliable interpreter of economics, or corporate law. So why should I trust his history?
It's a giant leap from "selfish" to violent or mean. I like to feel happy. (Possibly by definition?) I discover that charity makes me feel happy. (lots of research to show that this is true for most people) I give to charity. I discover that helping my friends and family makes me feel happy. I help my friends and family. I do these things because I want to feel happy. I am selfless because I am looking for personal fulfillment. But at the end of the day I do these things because it gives me fulfillment. Kind of by definition if I do something willingly I'm doing it because it's something that I want to do. If I spend a millions dollars or a car because I think it will make me happy, it's selfish. If I spend a million dollars on charity because I think it will make me happy, it's selfless. But it's also selfish.
Most humans have figured out that cooperating with others in most situations will result in a better outcome for themselves. This is not selfless. It's selfish. It would be selfless if it resulted in a worse outcome for themselves and did it anyway. Charity would be selfless if it made me feel worse. It doesn't. It isn't.
I want to get laid. I'm a mammal. It's hard-wired into my genes. Guess what? Being a dick doesn't get you laid. Being overtly selfish doesn't usually get you laid. At least not with the kind of women I'm interested in. So I'm nice. It gets me laid. This is selfish. A logical selfish person in society is nice rather than mean because it results in a better outcome for that person.
What about the argument that people may genuinely care about, say, 20-30 people, but no more than that?
That is, they may be fiercely loyal to their group of friends or their family or their gang, but see nothing wrong with trashing the streets or brawling in a bar. They may genuinely care about their small town, but don't care if the world goes to hell. They may give their life for their country, but fiercely hate foreigners. They may care about their won sports team and hate the opposing team fans.
In many primitive people's languages, the word for their own tribe is people, meaning perhaps that other peoples are not really human. In my language (Romanian), an older word for German (neamt) comes from a Slavic word that means "mute" -- meaning that they were seen as incapable of speech.
The model of economic actors as maximizers sometimes gets confused with an assertion about human nature. Economics doesn't say people are selfish, or greedy, or maximizers. It just uses the maximizer picture as a model, and that model helps in explaining a boatload of real-world, large-scale phenomena. That is, phenomena involving large interacting groups.
It's a lot like Dennett's "intentional stance". The idea that someone wants or prefers something, or is trying to accomplish something, is an overlay we use to understand the details of what they're doing. The reason it seems so obvious is because the idea of goals, desires and preferences is a really useful model. Even crazy people act as if they want crazy things.
The maximizer model sorts behavior into individual goals vs. how we go about achieving them, and that pretty much divides the stuff that's too massively chaotic to deal with, and the stuff that we can combine into big-picture insights.
Good motivations, bad motivations, quirky, conformist, selfish, cooperative, rational, irrational, they all fit perfectly well into the maximizer model. It's not about people's character and motivations. It's about what they do, in groups, given arbitrary motivations.
Even systematic irrationalities fit pretty well into the picture of just another common preference people have in a market.
Most people aren't impressed or excited (or in any case aren't satisfied) by this kind of dry modeling, and would rather have the grand stories of societal functioning and evolution be about the same things small-group dynamics are about: personalities, individual motivations, good and evil. Even the best writers, like Heilbroner , make the mistake of looking for the compelling stories of economics in individual psychology.
So it ends up that greed-- that is, taking umbrage at an imagined reflection of ourselves as greedy in the mirror of the economic maximizer model-- becomes an excuse to ignore economics. It's a red herring.
Personality isn't necessarily the best clue to history. I look at how much insight people trash trying to explain economics as drama, and I think if I had to choose between dramatists of economics and the dry economists themselves, economists have the better grip, and so the more gripping stories to tell.
Ah, the myth of the self-made man who made millions selling to (apparently) nonexistent other people.
If 'rational actors' exist, they maximise their returns by using the strategy best suited to their circumstances.
To everyone (not necessarily seen explicitly in these comments, but certainly seen at times) saying that unselfish deeds are selfish because they make one feel good:
Stop it!
You're just saying that because you're a selfish bastard.
(Still arguing with my personal non-individual straw man here. Disregard at your leisure.)
...or if what the selfish bastards say is true, then the discussion of selfishness is done and we need to move on to the next question:
Should one do selfish selfish deeds or selfish unselfish deeds?
The latter, obviously.
If I grant you that I'm selfish for sharing and doing good deeds, it's still better than your selfish deeds that hurt others, so I am good and right while you are bad and wrong.
Now change your thinking and behaviour or fuck off, bad straw man you.
We once had an infestation of strawmen. Turns out, all you need is some cake and a pointy stick. They sure don't like being poked, and the cake is your reward.
#55 Citryphus,
"Adam Smith wrote about self-interest. That's different from selfishness and greed. Self interest and the profit motive is not the same thing as greed."
That's it! Incentive builds business; greed destroys -and takes everyone down with it. This discussion has been about the whys -what basic human behaviors drive the market. Selfishness, selflessness, self interest, the profit motive and greed
are all in the mix. The cancer in the bunch is greed and the question, it seems to me, is what to do about it because greed is never, ever, going away!.
There are those who feel the market should be left alone to heal itself. And the market will eventually heal itself. The mechanism in catastrophic cases like today's, however, works like an epidemic: after killing a huge swath of the population some remain to carry on. That seems a huge price to pay.
There are also those of us who feel that as citizens we are allowed to say, no, greedy bastards, we're gonna drop some rules on your souless asses so it's less likely you'll be able to screw the pooch for everyone when you just can't keep your greed in your pants.
Rushkoff, where did you do your research about the machete controversy -- Wikipedia articles?
There's copious historical evidence of the Yanomamo being a warlike society. Some is here:
http://www.umich.edu/~newsinfo/Releases/2000/Nov00/r111300a.html
Chagnon surveyed living Yanomami people about their dead relatives and their causes of death. It's a little hard to see how those could have been affected by goods distribution, unless the Yanomamo know the secrets of time travel.,
Also, his results were replicated by numerous independent investigations.
I worked for a little while for Professor David Willer on power and control sociology experiments.
We'd set people up in ways that some folks had a clear advantage in negotiation games. We had models that predicted how much on average they would make, given a particular structure.
We would reliably see people behave not as rational maximizers. At one point our rationalization is that we were testing stupid people (this was the university of south carolina) so we went for USC honors college students. Didn't change a thing.
I have seen very little evidence that humans are rational maximizers.