The Evolutionary Case for Inclusive Capitalism

What does human nature have to do with good governance?

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By Bryan Callen and Hunter Maats

Interview with MIT Professor of Economics Daron Acemoglu and UC Berkeley Professor of Psychology Dachner Keltner.

At least since Plato’s Republic, humans have debated the best form of government. This debate seems endless and intractable because people make the case for the system of government they’re biased towards and then dismiss every other opinion as biased. In fact, this highly predictable criticism was leveled at Daron Acemoglu and his co-author James Robinson in the wake of their book Why Nations Fail.

Acemoglu and Robinson build a fantastic case for why politically and economically inclusive societies outperform non-inclusive societies. However, as American academics at MIT and Harvard respectively, it is easy (if you’re so inclined) to dismiss them as being biased towards democracy and capitalism. Acemoglu and Robinson have given the argument for politically and economically inclusive institutions new force but there is a way to make their argument irrefutable. And that is where Dacher Keltner comes in.

Professor Keltner studies (among other things) the psychology of power. For a long time, humans have recognized as Lord Acton put it, “That absolute power corrupts absolutely.” What was mere observation has now (thanks to Keltner and others) become established scientific fact. We can now no longer deny that power changes the way people think. They become less empathetic and more impulsive. This problem was naturally solved in hunter-gatherer societies by mechanisms like teasing, gossip and ostracism. These evolved human desires exist to help bring ballooning egos back into check. However, as societies expanded, and leaders became more remote, it became easier for leaders to wall themselves off, proclaim themselves as Gods, and to have others be controlled by this ideological falsehood.

As communications technology has improved, the opportunity to check that power has improved. Martin Luther succeeded where other religious reformers failed, in part, because he was able to take advantage of the printing press. With the internet, we now have more of a mechanism to keep our leaders in check. In a village of 150 hunter-gatherers, it’s pretty much impossible to keep a secret for long. In the global village, the same is coming to be true. While the downsides of that are personally obvious, it may be the key to keeping our leaders from suffering the negative psychological effects of power.

Of course, as Acemoglu makes clear in this interview, it is important that we never conclude that any of this is inevitable. Institutions are fragile and humans have a dual nature in them. We are capable of great kindness and terrible despotism. We must remain ever vigilant and that is why it is so essential that everyone on the planet read everything these guys have ever written right now.

Evonomics partners: the Bryan Callen Show.


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