What Institution Promotes the Highest Levels of “Trust, Fairness and Cooperation?”
Answer: The marketplace: “The strongest predictor [of fairness] was the community’s level of ‘market integration,’ which was measured by the percentage of the diet that was purchased.”
There’s more:
[Researchers] found wide cultural variations by observing more than 2,000 people in 15 small communities participate in a two-player game, called Dictator, with a prize equal to the local pay for a day’s work.
One player, the dictator, was given the authority to keep the entire prize or share part of it with the other, unseen player, whose identity remained secret. Along with this power came the assurance that the dictator’s identity would also remain secret, so that no one except the researcher would ever know how selfish the dictator had been.
The most lucrative option, of course, was to keep the whole prize and stiff the anonymous partner. But the Missourians on average shared more than 45 percent of the prize…
But most of the hunter-gatherers, foragers and subsistence farmers were less inclined to share. The Hadza nomads in the Serengeti and the Tsimane Indians in the Amazon gave away only a quarter of the prize. They also reacted differently when given a chance, in variations of the game, to punish another player for hogging the prize.
I think this is a very important finding. But the authors may have the causality reversed. People who create markets (or allow them to exist) may be the kind of people who have more of the fairness gene.
In other words, fairness may lead to markets rather than the other way around.
Good point, Joe.
People can change institutions. They cannot change their genes. So I would prefer to think that institutions people create have reinforcing effects on their fairness behaviour. In other words, people –not their genes — are masters of their own destinies.
I just finished reading Michael Shermer’s Mind of the Market. It had a whole chapter about fairness and trust. There’s a whole branch of biology that deals with reciprocity. They call it “altruism,” but it’s not altruism in the Ayn Rand sense. It’s closer to sharing.
It turns out that the traditional idea that capitalism causes us all to be greedy isn’t true. In the long run, we’re better off if we share. This “I scratch your back, you scratch mine” has been around for millions of years. And it almost always led to gains for individuals.
The biggest issue in this sort of society is how to punish freeloaders. Capitalism has an excellent mechanism: don’t pay them. Socialism has its own method: put them in charge. (Shermer didn’t write that last part. Those are my own conclusions.)
http://www.youtube.com/watch?v=71nsZABqoi8
Here’s Shermer’s Googe Authors talk. It’s not his best speech ever, but it gives a good overview of his concept.
There is no question that there is a culture that surrounds markets and capitalism. But is it the institution that creates the culture or do people with the right genes (predisposition to a culture) create free markets?