The Invisible Hook: How Pirate Society Proves Economic Self-Interest Wrong

Pirate bands are radically democratic and egalitarian: Hayek and the evolutionary imperative.

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By David Sloan Wilson

I recently took part in a workshop titled “Tensions in the Political Economy Project of F.A. Hayek”. The Austrian economist Friedrich Hayek (1899-1992) is a libertarian God and the workshop was organized by George Mason University’s Mercatus Center, a Mecca for modern libertarian thought. Nevertheless, I knew coming into the workshop that its organizers and participants were not “Greed is Good” ideologues. They are quick to distinguish between a “vulgar” and “sophisticated” version of libertarianism and the career of Hayek, which spanned seven decades, provides ample room for nuanced thought. The title of the workshop signaled that the organizers were willing to question their own worldview.

While at the workshop, I spotted a copy of a book titled The Invisible Hook: The Hidden Economies of Pirates, by Peter T. Leeson, who is Duncan Black Professor of Economics and Law at George Mason University. Leeson has a gift for explaining economics to a general audience and his newest book, WTF?! An Economic Tour of the Weird, is described as “Freakonomics on steroids” by Freakonomics author Steven Levitt. All three books use economics as a grand explanatory framework, whose scope extends far beyond the topics typically associated with the word.

I already knew something about pirate societies as remarkably egalitarian. How they behaved among themselves was completely different from how they behaved toward their victims. I also thought that a grand explanatory framework could explain this paradox, but for me that framework was evolutionary theory, not economic theory.

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Of course, these two outlooks need not be incommensurate. Economics came before evolution as a field of inquiry and its pioneers, such as Thomas Malthus and Adam Smith, strongly influenced Charles Darwin and other pioneers of evolutionary thought. Both require a conception of human nature and society in order to derive more technical results. Even though evolutionary theory is younger, it is more general than economic theory. If economic conceptions of human nature and society can’t be squared with the basic principles of evolution, then it is economic theory that must change. Nevertheless, if we take 1859 as the starting point for modern evolutionary theory, then we have had over a century and a half to bring the two theories into alignment. Economic theory might indeed explain pirates plus more—as long as it is consilient with evolutionary theory.

But it’s not—not fully, at least–which is why I was one of only eight participants invited to write papers for the workshop. Hayek pioneered the concept of economic systems as products of cultural group selection. That is my area of expertise, and while I admire Hayek for his originality and many of his insights, I also know that serious updating is required. The vulgar version of libertarianism cannot be justified on the basis of what Hayek wrote and the sophisticated version must bring what Hayek wrote into alignment with the best of our current knowledge of cultural multilevel selection.

When I read The Invisible Hook, I found all of the major themes that were discussed at the workshop, including the overarching theme that everything can be explained as a form of self-interest. At the workshop, this took the form of scholarly discussions of individualism in the social sciences. For Leeson, it meant that every nuance of pirate behavior—their fairness toward each other, their highly selective cruelty toward their victims, even the Jolly Roger as a costly signal, can be explained as a form of profit maximizing behavior. This comes close to the vulgar version of libertarianism and Leeson isn’t shy about calling “Greed is Good” a central lesson to be learned (p177).

For me, the central lesson to be learned, from both the workshop and Leeson’s book, is that the concept of individual self-interest is incoherent. That is arguably the major problem with economics and the major contribution that Multilevel Selection Theory can make in providing a more coherent alternative.

Before critiquing The Invisible Hook, allow me to praise it. It’s a terrific read that uses pirate societies as a microcosm for asking big questions about human nature and society. I learned much about pirates that I didn’t previously know and Leeson’s economic analysis gets a lot right. My main complaint is that we can do better with our general explanatory framework. The Invisible Hook can serve as a microcosm for asking big questions about economic theory, in addition to big questions about human nature and society.

Here are some of the facts about pirate society that cry out for an explanation. Famous for their barbarism toward their victims, it is easy to assume that pirates must also be barbarous among themselves, but nothing is further from the truth. Most pirate societies were scrupulously democratic. They voted on who was to be their captain and were quick to vote him out if he didn’t perform. They limited the authority of their captain to battle situations and elected another officer, the Quartermaster, to oversee the daily round of life on board. The Captain and Quartermaster received a mere two shares of captured booty, compared to 1 share for each member of the crew. A significant proportion of pirate crews were black and while some were slaves, others were treated as equals. Pirates created an insurance system for themselves with an agreed upon payment for the loss of each body part.

While their fearsome behavior toward their victims was real, it was also highly strategic. The goal was to capture ships and take their booty without any fighting at all. As long as their victims didn’t try to fight back or conceal their valuables, no one was likely to be hurt. Resistance was met with unrestrained cruelty, not because pirates were psychopaths, but to cultivate a reputation for being psychopaths to decrease the resistance of future victims. Pirates were also cruel to captains of captured ships who were cruel to their own crews. They seldom conscripted crew members from captured ships and didn’t need to, since there were typically plenty of volunteers. The main exception to this rule was crew members with special skills, such as surgeons or carpenters.

Leeson compares the invention of democratic governance among pirates to other inventions throughout recorded history, such as ancient Athens and colonial America. However, by far the most interesting comparison is with hunter-gatherer societies around the world, which evolutionary anthropologist Christopher Boehm calls “reverse dominance” societies1. In most animal societies, dominance takes the form of the stronger individuals intimidating the weaker. These societies would be called despotic in human terms and they provide an inhospitable social environment for cooperation. Even the limited cooperation that occurs usually takes the form of small alliances competing against other alliances within the same group. In our distant ancestors, members of groups found ways to collectively suppress disruptive self-serving behaviors, which provides a more hospitable social environment for cooperation. If you can’t succeed at the expense of others within your own group, the only alternative is to cooperate within your group in competition with other groups, which might take the form of direct competition such as warfare, or indirect competition such as surviving during hard times as other groups perish.

Here is our first point of departure between economic theory and evolutionary theory as grand explanatory frameworks. Economic theory doesn’t look very far into the past. Leeson looked no further than ancient Athens. Evolutionary theory looks far, far into the past. From this vantage, pirates were doing what came naturally throughout our history as a species—cooperating within their groups in a way that was rigorously policed and behaving as a corporate unit toward other groups in a way that was adapted to the ecological context.

Group selection is a concept that Darwin was forced to develop when he realized that his theory of natural selection could not explain the evolution of prosocial behaviors2,3. The word “prosocial” refers to any attitude, behavior, or institution oriented toward the welfare of others or one’s group as a whole. It is more general than the word “altruism”, which implies a degree of self-sacrifice in the act of helping others. The word prosocial is agnostic on that point. If a person can do well by doing good, so much the better.

Nevertheless, as a basic matter of tradeoffs, helping others or one’s group as a whole usually does require time, energy, and/or risk on the part of the individual actors, which places them at a relative disadvantage compared to other members of the same group who receive the social benefits without paying the individual costs. Here is a second point of departure between evolutionary and economic theory. Evolutionary theory is based on relative fitness. It doesn’t matter how well an organism survives and reproduces; only that it does so better than other organisms in its vicinity. Economic theory comes in many flavors, but the current orthodox version is based on absolute utility, as if people merely want to maximize their profits without comparing their profits to anyone else.

To appreciate the difference between relative vs. absolute fitness (or utility), imagine that you are a member of a group and can act in a way that generates $100 dollars for everyone, including yourself, at a personal cost of only $1. That makes you $99 richer and everyone else $100 richer. If you care only about your absolute profit, you will embark upon this action. If you care only about your profit relative to others in your group, you will avoid this action. The fact is, in many situations people do pick the equivalent of the second option because they care about being on top more than their absolute welfare.

According to the economist Robert Frank, rethinking economic theory to reflect the fact that “life is graded on a curve” will eventually make Charles Darwin, not Adam Smith, the acknowledged father of economics 4. For Darwin, the problem he faced was that natural selection among individuals within groups cannot explain the evolution of prosocial behaviors. His solution was to add another level of natural selection—among groups in a multi-group population. Here is how he put it in one of his canonical statements with human groups in mind5.

It must not be forgotten that although a high standard of morality gives but a slight or no advantage to each individual man and his children over other men of the same tribe, yet that an increase in the number of well-endowed men and advancement of the standard of morality will certainly give an immense advantage to one tribe over another. There can be no doubt that a tribe including many members who, from possessing a high degree the spirit of patriotism, fidelity, obedience, courage, and sympathy, were always ready to aid one another, and to sacrifice themselves for the common good, would be victorious over other tribes; and this would be natural selection. At all times throughout the world tribes have supplanted other tribes; and as morality is one important element of their success, the standard of morality and number of well-endowed men will thus everywhere tend to rise and increase (p. 166).

Two-level selection (between individuals within groups and between groups in a multi-group population) gave evolutionary theory the capacity to explain both disruptive self-serving behaviors (favored by within-group selection) and prosocial behaviors (favored by between-group selection) in any social species. The question of which level of selection prevails, or if both operate to a degree (resulting in a mix of antisocial and prosocial behaviors), is an empirical matter that must be examined on a case by case basis. Within-group selection is the dominating force in many social species, as I have already noted. These are “life’s a bitch and then you die” societies that none of us would want to live in. They have persisted for thousands of generations and will continue to persist unless there is a shift in the balance between levels of selection.

In other species, between-group selection is the dominating force. Members of groups evolve to be so prosocial that the group becomes a higher-level organism in its own right. This is called a major evolutionary transition6 and it has occurred repeatedly during the history of life, including the first cells, nucleated cells as groups of bacterial cells, multi-cellular organisms as groups of nucleated cells, and social insect colonies as groups of individual insects. Life itself might have originated as groups of cooperating molecular interactions. Literally every unit that we call an organism is in fact a highly regulated society of lower-level units that evolved by higher-level selection.

One of the most profound developments in evolutionary thought during the last three decades is to see our species as evolution’s newest major transition7. Our ability to suppress disruptive self-serving behaviors within groups and to coordinate our activities to achieve collective benefits has been baked into our psyches by thousands of generations of genetic evolution. It includes our moral sense, our ability to think in terms of a shared inventory of symbols, and our ability to transmit large amounts of learned information across generations. It includes mental activities that qualify as conscious and intentional, along with many other mental activities that take place beneath conscious awareness. As Alexis d’Toqueville perceptively observed8, “The village or township is the only association which is so perfectly natural that, wherever a number of men are collected, it seems to constitute itself.”

This is the genetically innate and culturally elaborated psychology that sprang to life on pirate ships during their extraordinarily brief history. More generally, it is the view of human nature and society that has emerged from evolutionary theory. The question now becomes: How can all of that be described by economists as a form of self-interest?

Leeson and I agree that there was an adaptive logic to pirate behavior. What they did resulted in benefits, compared to many other ways that they could have behaved. I attribute the adaptive behaviors to a complex moral psychology that evolved by a process of between-group selection and was largely invoked on pirate ships, although some contemporaneous cultural group selection might well have also taken place.

Leeson explains the same behaviors in terms of rational choice theory from economics, which he describes this way (p5):

First, individuals are self-interested. This doesn’t mean that they never care about anyone other than themselves. It just means that most of us, most of the time, are more interested in benefitting themselves and those closest to us than we’re interested in benefiting others. Second, individuals are rational. This doesn’t mean that they’re robots or infallible. It just means individuals try to achieve their self-interested goals in the best ways they know how. Third, individuals respond to incentives. When the cost of an activity rises, individuals do less of it. When the cost of an activity falls, they do more of it. The reverse is true for the benefit of an activity. When the benefit of an activity rises, we do more of it. When the benefit falls, we do less of it. In short, people try to avoid costs and capture benefits…It’s not just that economics can be applied to pirates. Rational choice is the only way to truly understand flamboyant, bizarre, and downright shocking pirate practices.

Given that I have offered another account, either one is wrong or a translation manual is required to show how they are consistent with each other. That won’t be easy. As Robert Frank noted, the rational actor doesn’t compare his benefits to anyone else’s benefit. Pirates were obsessively comparative, making sure that benefits were shared and calibrated to the contribution to group effort. Also, the rational actor is morally tone deaf. He might have an interest in the welfare of others, but that interest does absolutely no explanatory work in Leeson’s framework and might as well not exist at all. How can that account be squared with my account, which is centered on human moral psychology?

Let’s spend a little more time on moral psychology. In an interview that I conducted with the moral philosopher Simon Blackburn, I asked him to define morality as he would in an introductory philosophy class, without any reference to evolution. Here is what he said:

I think at its simplest it’s a system whereby we put pressure on ourselves and others to conform to certain kinds of behavior. That’s the side of morality that is perhaps most obviously associated with rules, with boundaries to conduct, with limiting criminal behavior when the rules are transgressed. On top of that, there’s an element of morality that is concerned more with our sentiments and emotions, for example with sympathy and our capacity to feel sympathy at others’ distress and a corresponding motivation to do something about it. So there are two sides to morality, one more coercive and the second more gentle and humane.

What’s remarkable about this conventional description of morality is how well it accords with my evolutionary account. A translation manual is scarcely necessary. The coercive side of the morality coin insures that prosocial behaviors within the group will not be exploited. Given a safe social environment, people are free to express their genuinely prosocial impulses to their fullest degree.

Human moral psychology is infused with “we-ness”. Who falls within the moral circle, qualifying as part of “we”? What should “we” do to maximize our collective benefits? That includes how “we” should behave toward those who are not included in our moral circle and qualify as “them”? In the strongest moral communities, the sense of “we-ness” is so strong that the group is described by their own members as a single organism, with the individuals playing an organ-like role—a metaphor that has now been affirmed by the concept of major evolutionary transitions.

In most moral communities, the word “selfish” is reserved for behaviors that benefit the selfish actor at the expense of the common good, which fits well with the definition of selfishness in MLS theory, as the primarily disruptive products of within-group selection. Prosocial behaviors are not called selfish, even when the actor benefits along with everyone else. Indeed, most religious moral systems promise abundant personal benefits to their believers, both in this life and the next. Moreover, when prosocial behaviors are analyzed in detail, they actually qualify as altruistic as defined by MLS theory. In other words, they typically require time, energy, and risk on the part of the prosocial individual that lower relative fitness within groups. They are like the individual that gains a mere $99, compared to $100 for everyone else. Between-group selection is required to make up for this negative differential.

In short, the study of human moral systems, first by philosophers and increasingly by behavioral scientists, is highly consilient with MLS theory. The rational actor model in economics is not. Either the rational actor model is just plain wrong or a lot of work will be required to show how it squares with both evolutionary theory and human moral psychology.

If Friedrich Hayek had taken an interest in pirates, he would have written a different book than Leeson’s. Hayek was a fierce critic of rational choice theory, which he regarded as a fiction. In fact, this is widely regarded as one of Hayek’s most important insights. Here is how the economist Herbert Gintis describes it in an article titled “Hayek’s Contribution to a Reconstruction of Economic Theory9”:

By contrast to Hayek, modern economic theory in general, and game theory in particular, hold to a much stricter and I believe indefensible form of methodological individualism in which all social phenomena above the level of the individual must be explained as Nash equilibria in a game played by self-regarding, amoral, rational actors. So ingrained in economic theory is this principle that it is not usually even explicitly articulated. Rather, it is simply embraced as “tacit knowledge” (p111).

Hayek’s alternative to the rational actor model distinguishes between two different moral systems, both a product of group selection. The first is more ancient, evolving at the scale of small groups and emphasizing cooperation and solidarity. The second is a more recent, a product of cultural group selection more than genetic group selection, which Hayek called “the extended order”. It made cooperation possible at a larger scale but required a new set of moral rules that emphasized the pursuit of individual self-interest in a free market, where supply and demand acts as the invisible hand steering self-interest toward socially beneficial ends. According to Hayek, these two moral systems would always exist in an uneasy relationship with each other. Here is a passage from his book The Fatal Conceit10:

The structures of the extended order are made up not only of individuals but also of many, often overlapping, sub-orders within which old instinctual responses, such as solidarity and altruism, continue to retain some importance by assisting voluntary collaboration, even though they are incapable, by themselves, of creating a basis for the more extended order. Part of our present difficulty is that we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously with different kinds of orders according to different rules. If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e., of the small band or troop, or of, say our families) to the macro-cosmos (our wider civilization), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of world at once (p 18).

Hayek would have regarded pirate societies as a manifestation of small group morality with little relevance to the extended order. His conception of economic systems is clearly more consilient with evolutionary theory and the study of human morality than the rational actor model, which is why I admire Hayek for his originality and many of his insights.

Nevertheless, according to both Hayek and his followers, his approach still qualifies as individualistic, if not the same kind of individualism as the rational actor model. That was a main topic of conversation at the workshop, with scholarly discussions of reductionism and methodological individualism on display. From my vantage, these versions of individualism are also incoherent and evolutionary theory provides a robust alternative.

Starting with reductionism, it is a school of thought that seeks to understand wholes by studying the parts and their interactions. In biology, an individual organism is an upper-level unit that reductionism blows past on its way toward molecular and atomic interactions. Here is how the philosopher Elliott Sober describes the two claims of reductionism in an article titled “The Multiple Realizability Argument against Reductionism”11.

1) Every singular occurrence that a higher-level science can explain also can be explained by a lower-level science.

2) Every law in a higher-level science can be explained by laws in a lower-level science.

Sober begins his article with the words: “If there is a received view among philosophers of mind and philosophers of biology about reductionism, it is that reductionism is mistaken.” His own analysis affirms the received view. Suffice it to say that reductionism provides no justification for individualism in economic theory, in part because individuals are upper-level units and in part because arguments that justify higher-level descriptions apply to societies as well as individuals.

Proceeding to methodological individualism, here is the definition provided by the authoritative Stanford Encyclopedia of Philosophy:

This doctrine was introduced as a methodological precept for the social sciences by Max Weber, most importantly in the first chapter of Economy and Society 12(1922). It amounts to the claim that social phenomena must be explained by showing how they result from individual actions, which in turn must be explained through reference to the intentional states that motivate the individual actors. It involves, in other words, a commitment to the primacy of what Talcott Parsons would later call “the action frame of reference” (Parsons 1937: 43–5113) in social-scientific explanation. It is also sometimes described as the claim that explanations of “macro” social phenomena must be supplied with “micro” foundations, ones that specify an action-theoretic mechanism (Alexander, 198714).

A contrast is often drawn, following J.W.N. Watkins (1952a15), between methodological individualism and methodological holism. This is usually tendentious, since there are very few social scientists who describe themselves as methodological holists.

Au contraire. The remarkable thing about evolutionary theory is that it justifies both methodological individualism and methodological holism16. To see how, consider the mundane observation that most species that live in the desert are sandy colored to avoid being seen by their predators and/or their prey. The explanation is simple: all species vary in their coloration, those that are sandy colored survive and reproduce better, and offspring resemble their parents. This prediction can be made for any desert species, such as a snail, insect, reptile, bird, or mammal, without any reference to their physical make-ups. To the extent that the physical make-up of an organism results in heritable variation, that is the extent to which it can be ignored in making predictions based on the shaping influence of selection, which is called “downward causation”16. The parts permit the properties of the whole, but do not cause the properties of the whole. If that’s not methodological holism, what would be?

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Of course, the coloration of every species has a physical basis: calcium carbonate for snails, chitin for insects, keratin for mammals, and so on. Mechanistic understanding (called proximate causation18) for each case is important, but it complements and does not substitute for holistic understanding (called ultimate causation18). And unlike the holistic explanation, which is the same for each species, the mechanistic explanation is different for each species.

This example is centered on the individual organism as the unit of holistic analysis. According to MLS theory, however, it is the unit of selection that needs to be the unit of holistic analysis, which is the group for highly group-selected species. This goes without saying for social insect biologists, who center their holistic analysis on the colony and not the individual insect. The conclusion is unavoidable that if we are a strongly group-selected species, then the holistic analysis should be centered on the group.

This is what Hayek is known for, by describing economic systems as a form of distributed intelligence that evolved by cultural group selection, in which each individual person plays a minor and for the most part unknowing role. Once again, Hayek was a pioneer of evolutionary thinking but to call his approach entirely individualistic is incoherent.

So far, I have been describing self-interest and prosociality in terms of how people behave toward each other, which doesn’t address how they think or feel. Perhaps Leeson is claiming that pirates (and everyone else) care almost entirely about themselves in their own minds, even when they cooperate with each other, like the hypothetical religious believer who does unto others only because she wants to go to heaven.

There is a long tradition in philosophy and psychology on the question of whether everyone is a psychological hedonist or egoist, which Elliott Sober and I consider at length in our 1998 book Unto Others19 and which I update in my 2015 book Does Altruism Exist?2 Our conclusions provide no more comfort for individualism than an analysis based on action. In fact, if by “economic” we mean cost-benefit reasoning, then an economic analysis suggests that when prosociality in action is called for, then prosociality in thought is the most efficient and least error-prone way to produce the action. A remarkable example from the sea is told by the 19th century writer Stephen Crane in his short story “The Open Boat”20, based on a real-life experience in which a ship he was aboard sank off the coast of Florida and he found himself in a tiny dinghy with three other men, rowing for their lives toward the shore. Crane could have cared only for his own life, but that was not his psychological experience.

It would be difficult to describe the subtle brotherhood of men that was here established on the seas. No one said that it was so. No one mentioned it. But it dwelt in the boat, and each man felt it warm him. The were a captain, an oiler, a cook, and a correspondent, and they were friends—friends in a more curiously iron-bound degree than may be common. The hurt captain, lying against the water jar in the bow, spoke always in a low voice and calmly; but he could never command a more ready and swiftly obedient crew than the motley three of the dinghy. It was more than a mere recognition of what was best for the common safety. There was surely in it a quality that was personal and heart-felt. After this devotion to the commander of the boat, there was this comradeship, that the correspondent, for instant, who had been taught to be cynical of men, knew even at the time was the best experience of his life (p 353).

I can’t speak for pirates, but countless soldiers have told similar tales of devotion to their comrades during life and death situations and a psychological merging of the self with the group. This is called “fusion” in the psychological literature and is particularly strong in terrorist groups21.

I have conducted research that measured both prosociality in thought (with a survey) and action (with experimental games and naturalistic expressions of prosocial behavior) in everyday life22. The results could have shown a zero correlation if people who are self-interested in their minds know when to be prosocial in action, but the results showed a strong positive correlation. If you want a helpful social partner, find someone who tells you outright that it is important to help other people. Then there are the famous studies led by Robert Frank showing that economic training in college causes people to be less generous in action23. Individualism defined in terms of thoughts and feelings is as incoherent as individualism defined in terms of action.

In Chapter 8, Leeson humorously lists the take-home messages of his book as the syllabus of Professor Blackbeard’s Management 101 class. Lessons to be learned include “Greed is Good” and “Regulations are important, but using government to impose them can backfire”. These come close to the vulgar version of libertarianism, which pretends that the Market can do no wrong and the Government can’t do anything right, compared to the more sophisticated version of libertarianism discussed at the workshop.

Here is an example that Leeson provides of a government regulation that went awry (p187):

Consider, for instance, the Americans with Disabilities act (ADA). The U.S. Government created the ADA in 1990 to prevent employers from discriminating against disabled workers. The ADA seeks to do this by prohibiting “wrongful termination” of disabled employees, along with introducing a number of other mandates. Under the ADA a disabled worker who believes his employer has fired him or otherwise discriminated against him because of his disability can sue his employer. This legislation’s intent is to increase disabled American’s employment. That’s certainly a noble goal. But this legislation’s outcome has been just the opposite of its intention. The ADA’s actual effect has been ignoble indeed. In a 2001 study of the ADA’s effects on disabled individual’s employment, MIT economists Daron Acemoglu and Joshua Angrist found the ADA significantly reduced the number of disabled citizens American employers hired. In economist lingo, the ADA creates “perverse, unintended consequences.” The ADA rules raise the cost of hiring disabled workers. If such a worker proves less diligent or productive, for example, even for reasons totally unrelated to his disability, the ADA makes it more difficult to fire him. So, employers simply avoid hiring disabled workers in the first place.

Peter Boetke, one of the workshop organizers and participants, has documented another example in which federal funding for police departments has contributed to their militarization and eroded the kind of partnerships between police and neighborhoods that would be far better for everyone24.

These examples seem right to me and no doubt there are many more. Of course, there are also examples of government programs that work and the economist Mariana Mazzucato has made an especially strong case for the positive role of the state in promoting entrepreneurship25. The main point to make is that “perverse unintended consequences” are not limited to government programs. They are likely to occur for any new action that is introduced into a complex social system, whether by government, the private sector, or any other sector. Knowing this calls for a cautious and experimental approach to public policy formulation and implementation, as articulated by David Colander (another participant of the workshop) and Roland Kupers in their book Complexity and the Art of Public Policy26. Such an approach can be regarded as a form of managed cultural group selection and a fulfillment of the economic paradigm that Hayek pioneered. Call it “sophisticated libertarianism” or anything else you like. It’s the only way to make the world work as cooperatively as the crew of a pirate ship.

2017 December 21

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  • William_Berkson

    Thanks, I didn’t know Darwin himself wrote about group evolution. I agree that prosocial instincts are real and important. But the self-interest vs prosocial (or altruism) dichotomy misses a critical feature of human society. We have the capacity to recognize, and be influenced strongly in our behavior by abstract concepts like marriage and money. My late teacher Karl Popper called these concept ‘world 3’ objects, as they are neither simply physical (1) nor (2) individual and subjective.

    Someone humorously but insightfully defined Man as “the only animal with in-laws.” As that witty definition emphasizes, we make commitments to relationships, such as marriage, or employee, that have their own rules. We are most often carrying through out commitments, and not calculating who exactly they benefit. And our decisions on what to commit to are very complex, involving a mix of all kinds of factors, both self-interested, and involving concern for others, particularly family and friends.

    Hayek, as you describe him, was too insightful on evolution of systems to buy into the libertarian hyper-individualism. But his anti-government bias led him to be incoherent. He argued for unintentionally evolved systems as being superior, but was willing to accept Welfare State institutions, which are deliberate ‘social engineering.’ This led him to fundamentally misconceive the best role of government in the economy, as I argued here:

  • jackvandijk

    As with many/most article written in English, this is to long, one looses the thread and it becomes a threat.

  • Very good David.

    Agree with most of what you wrote.

    The only variation of perspective I would add, is that every level of unit requires a boundary, and any level of boundary that has a degree of consistency over time can give definition to a unit.

    Evolution works on every level simultaneously.
    Impact at each level is context sensitive.
    We all belong to multiple levels of groups simultaneously.

    The nature of the boundaries is important.
    The nature of the environment is important – and the impact of infrequent but very influential events ought not to be underestimated.

    It seems that being an embodied human being involves about twenty levels of complex adaptive systems, each with its own set of boundary conditions (every system within every level).

    It seems that markets have historically helped facilitate many different sorts of boundaries, in many different sorts of groups, at many different levels.

    It seems that we can now use other tools (digital communication and storage) to maintain and build those boundaries (and the systems they support), ones that do not have the scarcity bias of markets, and can actually sustain universal abundance of sets of goods and services.

    New levels of cooperation allow for new levels of complexity and levels of benefit.

    And all cooperation requires attendant strategies to prevent invasion by cheating strategies (and that is a hugely complex topic, as per Ostrom and Axelrod et al).

    It is an exponentially expanding set of levels and systems within each level.
    It is beyond any sort of absolute predictability, and there are deep lessons available from a deep study of evolution.

    Being human is being a member of many different sorts and levels of entity at the same time.
    The more conscious we are of that fact, the more secure we all become.

    Fully automated systems allow us to provide for all, without requiring anyone to be a slave at any level; and it does allow for us all to be of service at whatever levels we responsibly choose, to play whatever cooperative games we responsibly choose.

    The game board is fundamentally altering.
    Universal cooperation is becoming the most stable and beneficial game possible – and it doesn’t need to be any sort of perfection (cannot be – in an eternal exploration of infinities), it only needs to be good enough (a useful enough approximation) to survive.

    • “Universal cooperation is becoming the most stable and beneficial game possible – and it doesn’t need to be any sort of perfection (cannot be – in an eternal exploration of infinities), it only needs to be good enough (a useful enough approximation) to survive.”

      Yes; nice.
      Fine post Mr. Howard. Thank you.
      (Snorgle, aka, Bryan Atkins)

  • Partha

    A somewhat unorthodox viewpoint, though fundamentally sound, is relevant for situations
    when two units or families having different fundamental groups of occupants unite to form
    a simply connected family. The ‘cost’ of uniting the groups is then to be observed in an
    independent family which then adjusts its own narrative or biases to account for the
    disparity they contain within them. Thus start ups, which provide services which are often
    seen as disruptive, do get assimilated when they create further demand for a flow of
    economic activity within the larger environment purely because of their success.

    • Peter van den Engel

      Digital technology as in internet search machines has never been seen as disruptive/ but as complementary. Untill it started to collect money streams previously belonging to massmedia, causing it to be recognized as disruptive. The inverted evolution compared to the suggested.
      Airbnb is a disruptive startup compared to hotel industry/ but also regarding rising real estate prices: cost of living in general, so you cannot compare benefits as if they only exist on a single level. They stay disruptive.

      • Partha

        Sure. Search engines which are impartial to the object of the search are
        preferable, to most, as compared to search engines which may seek to
        direct searches to a smaller class based on their ability to pay into their
        money streams. They concentrate information into a cartel rather than
        share and create further demand in the larger ecosystem.

  • Peter van den Engel

    Very interesting essay. I guess its main objectives are to prove that economic theory is more reductionist; as in egocentric or efficiency; than evolution theory, or in other words altruism serves a higher goal than egoism in social selection.

    As fi represented by a pirate group acting parallel to a hunter gatherer function. But it depends on where you put the center of self interest, because the group as a whole has one too. When this is similar to each individual in the group it acts like an organism, like an animal. It does not care about the rest of its environment, so it is reductionist. You might explain this by calling it impersonal, non familiar. Which also explains the cognitive level: that of understanding, thinking and literacy.

    The example of sandcolored creatures in the desert is reductionist efficiency as well, because the only objective is to be invisible, serving two means at the same time. It includes the differences in the whole/ but at the same time denies them, so it is an example of greed is good/ and not altruism.

    The main problem of evolution theory I presume is that it stopped at observing hunter gatherer groups, recognizing its familiar social cooporation/ but never understood the economic function of agricultural groups, which led to our economic money system, providing the energy information for group behavior, which materializes its economic efficiency.

    Sine this has been the primary cause for further second level human evolution; although by no means suggesting it is perfect (the invisible hand suggests an almost religious perfection/ while in fact the economic mechanism has been flaw from the start, as a rational actor; when a rational actor misunderstands its rationale/ it becomes an irrational actor) reducing it as knowledge is almost a paradox.