Fairness

Do You Care Enough About Future People to Leave Them a Livable Planet?

Global environmental dilemma as a problem of fairness

Share with your friends










Submit
More share buttons
Share on Pinterest

By Louis Putterman

Environmentalism has made major strides in capturing many people’s imaginations over the last few decades.  From the concern of just a few activists, agreement that the natural environment is worth preserving extends at least to a willingness to recycle containers and unwanted paper, awareness of the dangers posed by global warming, and worry about melting polar ice caps, rising sea levels, and more violent storms.  But when it comes to significant trade-offs between our convenience (the door to door luxury of the private automobile) or livelihoods (running industries on cheap fossil fuels), on the one hand, and actions to reduce the environmental costs that our grandchildren and great-grandchildren will bear, on the other, how much sacrifice are we really ready to make?

A paper published in Nature this summer suggests the optimistic conclusion that most people are in fact willing to sacrifice to assure a human future on our planet, but it also contains the important proviso that this willingness may be conditional on assurances that others will do the same.  Moreover, the authors show that successful outcomes might depend on empowering majorities to reign in the excesses of resource over-exploiters.  This puts institutional arrangements on a par with emotional or ethical valuation of the future as a factor that could prove decisive in determining whether our planet is still fit for human habitation generations from now.

Get Evonomics in your inbox

Hauser, Rand, Peysakhovich and Nowak* conducted experiments with short-term workers hired on Amazon Mechanical Turk.  In the main treatments, participants were assigned to groups of 5, and each was told that his or her group had 100 units of a resource from which each could take whatever he/she wished provided that the total didn’t exceed 100, with none receiving anything if that total was exceeded.  Being prevented from communicating with one another, a safe strategy was for each to take 20 units.  However, there was a twist: the participants were also told that their 100 unit resource pool would be replenished and passed along to another group of 5 participants, but only if the total they took was not more than 50 units, rather than 100.  For example, if the current 5 individuals each took 10, they each earned the money value of their 10 units, and the experimenters then replenished the remaining 50 unit pool to become a fresh 100 unit pool for a new group of 5.  If the resource was replenished for that next group and its members in turn took 50 or less, the pool was replenished for yet another group, and so on (with a small chance of random termination taking the place of a time discount). The upshot is that while it was a safe selfish strategy to take 20, the corresponding strategy for players who care about the prospects facing future groups was to take only 10 each.

Remarkably, the majority of participants restrained their takings to 10 or less despite the fact that they would never meet those in future groups and could not be personally credited by anyone for the sacrifice. This provides a basis for concluding that the Hauser et al. subjects at least cared enough about future individuals to make sacrifices in order to conserve resources for them. There was a problem, though: in the basic set-up just described, having most people make the sacrifice isn’t enough to conserve the resource.  If 3 out of 5 limit their takings to 10 but the other two take 20, for example, then total takings will be 70.  This is below 100 and therefore goes through in terms of earnings of this group, but it’s above 50 and so it causes the resource to “crash” and be unavailable to future groups.

Hauser et al. then experiment with an alternative treatment in which the amount each member of a 5 person group is given, out of that group’s pool of 100 units, is determined by the median amount that those 5 individually propose to take.  For example, if members propose to take 8, 10, 11, 20 and 20, the median is 11 so each is given 11, 55 in total are taken, and the pool does not replenish for a further generation.  If the members propose 10, 10, 10, 20 and 20, as in the earlier example, the median is 10, so 50 are taken, and the pool is replenished.  A binding median proposal is a standard way of representing majority rule in laboratory decision experiments.

In the median decider treatment, for which large numbers of additional participants were recruited, most individuals in most groups again cared enough about future players to take 10 or less, but under the new institution, this ended up causing pools to be conserved and replenished the large majority of the time, instead of crashing due to one or two selfish grabbers.  In fact, the fraction of players who proposed 10 when they knew that the median proposal would be binding on all was significantly larger than the fraction of players who took 10 when each made an independent decision.  As the authors emphasized, this can be interpreted as indicating that a substantial number of individuals are prepared to make a sacrifice (take 10 instead of taking 20) when they are assured that it won’t be in vain because the choice will be binding on everyone.  Apparently similar individuals didn’t make the sacrifice in the first treatment because they suspected (usually with good reason) that one or two selfish individuals would cause it to be in vain.

The application to world environmental problems is in some ways straightforward, in others more complex.+  The straightforward part is that if this small stakes representation of our global environmental dilemma can be extrapolated to a larger scale, it gives hope that the present generation might preserve a livable world for our children and grandchildren, but warns us that we’re likely to succeed in this quest only if we adopt rules that are binding on everyone.  The complicated part is that the institutions for making such rules binding on the world as a whole don’t yet exist, as the experience with the Kyoto Protocol makes clear.  Moreover, even where rule regimes do exist, as on a national level in the United States, political outcomes have thus far fallen far short of what’s needed to match the good results of Hauser et al.’s research subjects.  Is this because most people are not sufficiently concerned about the future when there are much larger stakes than in the experiment, ones perceived as affecting standard of living and convenience in more substantial ways?  Or is it because our political process breeds outcomes skewed in ways ruled out in the experiment, for instance due to the influence of wealth on the political process?

These issues lie close to the theme in my book. Put briefly, we have good news and we have bad news.  The good news is that most people are not as selfish and as narrowly rational as traditional economic textbooks used to suppose, and that this opens up space for successful cooperation, including cooperative efforts to address shared social dilemmas.  The bad news is that institutions matter, and that there remains much to be done to improve existing institutions if we’re to harness “the better angels of our nature” to achieve a fairer, more life-enriching, and more sustainable world.

* Hauser et al., Cooperating with the Future, Nature 511, 220-223, June 25, 2014.

+ Putterman, A Caring Majority Secures the Future, Nature 511, 165-166, June 25, 2014.

Originally published here.

April 17 2016


Donating = Changing Economics. And Changing the World.

Evonomics is free, it’s a labor of love, and it's an expense. We spend hundreds of hours and lots of dollars each month creating, curating, and promoting content that drives the next evolution of economics. If you're like us — if you think there’s a key leverage point here for making the world a better place — please consider donating. We’ll use your donation to deliver even more game-changing content, and to spread the word about that content to influential thinkers far and wide.

MONTHLY DONATION
 $3 / month
 $7 / month
 $10 / month
 $25 / month

ONE-TIME DONATION
You can also become a one-time patron with a single donation in any amount.

If you liked this article, you'll also like these other Evonomics articles...




BE INVOLVED

We welcome you to take part in the next evolution of economics. Sign up now to be kept in the loop!

  • I agree that it would be useful to have great institutions to address collective action problems like environmental protection. How you get there is much more complicated question.

    One note about the article’s title: The things we can leave for the future include more than a “livable planet”. Among many others they include the level of technological development and standard of living. It is possible at some margins that those may be more valuable that planet livability.

  • anotherneighborhoodactivist

    “our political process breeds outcomes skewed in ways ruled out in the experiment” is an interesting turn of phrase. The real process that “breeds” skewed outcomes—and that is rarely addressed in sustainability discussions—is breeding itself.

  • The destruction of the natural world is not the result of global capitalism, industrialisation, “Western civilisation” or any flaw in human institutions. It is a consequence of the evolutionary success of an exceptionally rapacious primate. Throughout all of history and prehistory, human advance has coincided with ecological devastation. — John Gray, STRAW DOGS

    • anotherneighborhoodactivist

      That’s close to what I said. However, the systems used to manage things do make a difference. Odds of collapse appears to increase not only with resource overshoot, but also with increased inequity from whatever kind of political economy is being used. Check out http://www.sciencedirect.com/science/article/pii/S0921800914000615

  • chris goodwin

    We have two problems here. A technical question of what we can do to optimise the environment, or minimize the harm we do to it – while still doing the other things we want to do: this is economics. And the political question of what governments will permit and/forbid. The answers to the questions posed in the first problem should inform the decisions made to deal with the second problem. But that is not the way we are proceding; first we were told “the science is settled”, then the politicos came out with their programmes, and we have still not tackled the technics: because it needs more than “science” – it needs engineering. And the “scientists” who have all the answers are woefully inadequate as directors of engineering solutions – especially as their science is clearly flawed.

  • Swami

    To solve a problem, you must frame it correctly.

    The author has framed the issue of global climate change as an issue of fairness and sacrifice, implying if we are just willing to cut back that we can leave a better world to future generations. Implicit in the argument is that coordinating the selfish actions of 7 billion people is impossible without global, coercive, “binding” institutions which can help us to “sacrifice” for the good of the planet.*

    The average global household income is under $10,000 per year (less than what the average poor family makes in the US.) So, if I am reading the author right, all we need to do is recycle, use fluorescent bulbs, stop having babies and volunteer to be “poor.”

    This is now called “fairness.”

    On a more serious note, I would suggest that the only real way forward on the issue is scientific, technological and economic progress. We need the wealth, the technology and the science to continue the process that solved the problems of insufficient whale oil and excessive manure filling the streets (the crises of prior eras).

    We need clean, efficient energy and technological solutions and high enough living standards so that all the world can afford to make the environment a priority.

    Sacrifice has nothing to do with it. The real solution is progress.

    We have ten times as many people, living twice as long, with less disease, pain and suffering. We have more freedom, more cooperation, more knowledge and more awareness than ever of how important it is to protect our shared environment. This came about not by forcing everyone to sacrifice, but by creating institutions which encourage people to benefit themselves by benefitting others. Scientists and engineers and entrepreneurs solved problems for other for their own gain. Cumulatively we have advanced more in the past two centuries than all the rest of history combined.

    If you want to get insights on how to solve the problems of the future, I suggest we start by learning how we solved the much, much worse problems of the past. The solutions lie not in globally binding institutions of equal sacrifice, but in diverse, decentralized, competing-cooperating problem solving institutions of mutual advantage.

    If you care about future generations, first study the past and second, frame the issue correctly.

    *But don’t worry, the elites running the show will drive zero emission Teslas and use solar energy to power their mansions.

    • anotherneighborhoodactivist

      We need clean, efficient energy and technological solutions and high enough living standards so that all the world can afford to make the environment a priority.

      What “technological solutions” can replace the current energy and material used by 7+ billion people? Or even a half or quarter of the current throughput?

      • Swami

        Hate to answer a question with another, but what technology was available in 1820 to replace the horses and whales? Point is that what we need is to focus on the process which creates/discovers new solutions. If I was to guess, this would be some combo of nuclear, solar, battery, efficiency of current solutions and new technologies not even imagined today.

        The solution is R&D, entrepreneurial creativity and applied science. This is what made our lives so much better than prior eras, and is the best (though not certain) path forward.

        Not “sacrifice” or centralized binding decrees on fairness by political elites.

  • Pratapa Gadigi

    A basic problem is in allowing the organizations to grow to a level considered as “Too big to Fail”. Such organizations can grow to such levels mostly through unfair and unethical policies at the cost of the majority like what happened in sub-prime crisis. Such organizations, by virtue of the policies followed by the companies to grow to so high a level, gather people of poor ethics in running the organizations at high levels as well as at middle levels who matter most in managing them. Being so big, they become strong enough to form ‘special groups’ to influence policies and actions of the governments. As a result, though a minority as per this article, dishonest people become capable enough to influence the policies of the governments for the detriment of majority.
    Such big organizations become bigger than many states and hence wield more power than states.
    Therefore, E.F.Schumacher was right to say that “Small Is Beautiful”. Each big organization behaves like an independent feudal state within a democratic country.
    Laying a limit to the size a company can grow to, minimizes the unfairness to a large extent in the democratic world. This gives room for more ethical people to play their role for sensible development with their fair policies, and discourage crony capitalism.

  • ronhouse

    The problem with this article is that it assumes a known “right” answer to the problem. In this case the assumed answer is almost certainly the opposite of the truth. Increasing CO2 emissions have greened the planet by 11% in 28 years (CSIRO). That’s enough extra greenery to feed 600 million people and countless wildlife. OTOH, the CAGW (catastrophic anthropogenic global warming) theory is almost certainly wrong: it predicts a tropospheric hotspot (it’s getting cooler), more water in the upper atmosphere (there’s less) and less radiation to space (there’s more). Three central predictions, all wrong. Against massive amounts of extra food that has already happened. So while the psychological experiments are interesting, the application of them, let’s put it mildly: assumes facts not in evidence.

  • mohinderkumar

    Nature doesn’t know that there is a society of conscious (and unconscious) individuals and institutions because nature itself doesn’t have consciousness. So, climate change is society’s problem. Nature doesn’t have any problem even if the worst of primates/ humans destroy it. Human destruction cannot be bigger than “dialectics of nature”.

    Despite cumulative growth of past 200 years’ progress outstripping all previous historical progress, human society was yet to solve “human” problems when confronted with natural problems. So, human society (including state) has two problems at its hands simultaneously. Which one to solve first? Mankind, that way, is in pitiable condition.

    How would nature (and earth) react when man (state) privatizes every nook and corner of the earth? Earth shall not react. How would nature (and earth) react when man (state) draws geographical boundaries diving the surface on earth into 160 “countries”? Earth knows how much deep would you go? Can man/state’s sword-line of division dig deep and reach beyond say 5 km or even up to the central/core of the Earth? It’s a mockery of man himself, nation states’ ludicrous design to divide.

    when human/social/societal question is still unresolved, when shall you take up the natural question?

    It looks silly for humans to talk of climate change problems when human question is still not properly understood, leave aside resolved. It’s manifestation of collective panic and desperation, rather hypocrisy heightened to a display of our own foolishness and idiocy. Geographical borders are still a cause of human degeneration and we’re going ahead to solve CC issues!! Whom are we fooling –nature or ourselves.

    If Wall of Berlin could be demolished, why not other borders and Line of “Controls”? Mother Nature appears to say, if we can so imagine, that when humans themselves are so ruthlessly divided, why can’t I play my game of trophy called catastrophe?

    Let us dismantle borders first (where spectral finance capital can move unhindered but men are prohibited to trespass); then only can we be able to take up the Natural Question.

    On Institutions. Post-WW II, Einstein did propose a universal government or United Nations Government under UNO with a single/unified seat of power. Today, that idea could be taken forward. His idea is unique as only a scientist of the caliber of Einstein who conjectured about equation signifying unified force in universe could think about unitary world government. Are we as individuals (then family then community, then society, state, nation state) ready to shed our sense of power (over others) locally and willing to be participants in unified global order on equal terms? The point is: Let us first solve the human question; CC is an aftermath. If we think, nature cannot wait then speed up resolving the human question (problem) whose base lies in PRIVATE appropriation of natural resources by private property.