Book Review: Moral Sentiments and Material Intersts

The review in a nutshell: free rider proof morality.

One of the central dilemmas of the human condition is getting large groups of unrelated strangers to cooperate with each other. Whenever you have a group of people working collectively towards a common goal there are always some people who pull their weight and others who are free riders. I’m sure anyone who has ever had a job knows all too many free riders! Garrett Hardin memorably dubbed this the tragedy of the commons. Hardin’s example is of villagers who graze their cattle on a commonly owned field. Now, if they wanted to manage the common field for the long term then each villager should abide by a quota of perhaps ten cattle. But unfortunately each villager has an incentive to break this quota. One extra cow won’t have much of an impact on the long term health but it will make them a lot of extra money. Thus all villagers end out grazing extra cattle and the common field becomes overgrazed. All the cattle end out weak and scrawny. Hardin used this as an example to refute Adam Smith’s invisible hand – in this case the pursuit of self-interest makes everyone worse off. Progressive argue that the government should get involved to regulate the commons. The government can set a quota and then enforce it. Libertarians argue for private property. Divide the commons up into privately owned lots. Each owner has an incentive to take care of their own lot.

If all we had to worry about were grassy fields then I would side with the libertarians. But there are many cases where the common good cannot be divided up. Two of the most important types are (1) firms and (2) governments. A firm is like a common good. If everyone works hard then their jobs will be secure and they will get raises as the firm grows and expands its business. Free riders shirk on the job and/or steal from their employer. Too many free riders and the firm fails – just like any other commons. Governments are like firms but with less competition. Corrupt government bureaucrats are arguably much nastier than corrupt workers at private firms. The police, judges, politicians, and bureaucrats have more power that they can abuse. (For more on how firms can fall to free riders see The Wisdom of Crowds. For more on governments see Beyond Politics).

That takes us to the central dilemma of the human condition. How do you get unrelated strangers to cooperate? Libertarians argue that self-interest will accomplish this, but as we’ve already seen, self-interest leads to free riding. That doesn’t work. Progressive correct point to the need for moral behavior, but that has a different problem. In a world with free riders acting altruistically just turns you into a sucker. You can’t solve the free rider problem by acting even nicer to people who are free riding. What we need is a free rider proof form of morality. We need a morality built on personal responsibility. Herb Gintis and his collaborators in the book dub this strong reciprocity. There are two key principles. The first is that strong reciprocators are conditional cooperators. They are willing to trust other people in order to cooperate. The second is that they are altruistic punishers. They will punish free riders even at a personal cost to themselves.

Suppose you have a group of ten people with one free rider and one strong reciprocator. The free rider will normally come out ahead of the rest of the group – but not after you factor in the punishment of the free rider. Of course, the altruistic punishment is costly for the strong reciprocator so he will also be a little bit worse off than the rest of the group. The good news is that the cost of altruistic punishment declines with the number of free riders. Consider a society with many strong reciprocators and very few free riders. Then strong reciprocators will almost never encounter free riders and have to punish them. By contrast, a society with many free riders and few strong reciprocators has the opposite dynamic. It is very costly to be an altruistic punisher.

Another running theme in the book is the power of culture. In Not by Genes Alone Richerson and Boyd (who contributes an essay here) roughly define culture as information capable of changing how people behave. Thus culture is the solution to the free rider problem. Strong reciprocators are not born, but made. Richerson and Boyd (who reject the simplistic memetics of Dawkins) point out that cultures evolve and face selection pressures. Cultures that produce happy and prosperous societies will spread and those which do not will be weeded out. The challenge to successful societies is to create a culture which turns free riders into strong reciprocators.