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Moral Sentiments and Material Interests: The Foundations of Cooperation in Economic Life (Economic Learning and Social Evolution)

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For several years now, a group of social scientists has been studying the human tendency to be socially fair rather than narrowly selfish. The editors of this volume--Herbert Gintis, Samuel Bowles, Robert Boyd, and Ernst Fehr--are among the stalwarts; others are found among the authors of the book's chapters.
The core of this long-running effort is Fehr's experiments with the ultimatum game, in which two people must share a sum of money (say, $10); Person A gets to propose a split, Person B can only accept or decline. Economists and politicians would expect every game to wind up with a $9.99/$0.01 split (or actually a 9-1 split, since bills are used), but in fact typical splits are more like 5-5 or 6-4, and in one place (Lamalera, Indonesia) people actually split something like 4-6, few A's ever claiming even half the money. This long-running set of experiments around the world adds to a vast, rapidly accumulating set of data showing that people are sociable, not "rational" in the folk-economic sense (i.e., dedicated solely to narrow material self-interest). The present book discusses the implications for economics and politics. If people are naturally concerned with fairness, narrowly economistic policies can be counterproductive; we all know cases of "crowding out," in which a material incentive actually makes people act worse, by crowding out moral incentives. If you reward people for being good, they will think it's all a cynical game, and will act worse. Punitive legislation to make people do what they do anyway (for moral reasons) is also counterproductive. Imagine what these realizations would do to American social policy.
The problem with this book is that it is too optimistic and upbeat. The downside of human sociability is confined to one page, late in the book (p. 388), where racism, honor killing, and the like get a quick mention. Alas, the morning radio brings a stream of accounts not only of such things but also of religious butchery all over the world--Christians, Muslims, Hindus, and even Buddhists (theoretically prohibited from killing but busily genocidal). This brings us back to Adam Smith's suggestion that greed may not be lovable but may be better than the noble, virtuous alternatives. I hope Gintis et al work on how to decouple fairness and interpersonal concern from the desire to exterminate everybody who is not in one's immediate social set. Until this is done, the hope purveyed in this work will remain thin.
The authors note that humans seem genetically programmed to have at least some sense of fairness and of self-sacrifice for the common good, but they wisely refrain from trying to unpack "hereditary" and "environmental" or "cultural" aspects. Heredity makes us do this, and learn it easily, and heredity gives us the ability to learn and develop cultures. No way to unpack. Still, more needs to be done on just how flexible these inborn moralities are. The range from Lamalera to certain parts of South America is pretty great. So is the range of murderousness in religious and ethnic settings. We need to know how to modify human behavior in these regards, and how much we can hope for.
That being said, this book is the best yet in the long list of books that devastate the selfish-individualist model of human behavior. People desperately want to be sociable, and be good members of their society. This may lead them to fairness and generosity, or to body-piercing, or to suicide bombing. This book offers hope for building new societies through use of innate human decency. At this point in time, any book seriously offering such hope is desirable.

This book is just really great. The literature on fairness and reciprocity in social science is growing fast, and this book is ideal to give you a flavour of why this is such a good thing. It is diverse, with entries ranging from biological models that attempt to explain the evolution of reciprocity, through the implications of reciprocity for the way legal sanctions work, to the political philosophy of the dark side of clan mentality.
Most readers will probably not want to read everything, and even less people will agree with everything. One needs to remember that a lot of the stuff in this book is still controversial, including the existence of (strong) reciprocity, but this is what makes it so very interesting. And if only half of what's in this book is right, it is still revolutionary.
In 10 years, this book will be terribly outdated. But for now, it is the best thing you can get if you are interested in the interplay between evolution, reciprocity and social order, and the fundamental questions of social science that it entails.

Moral Sentiments and Material Interests: The Foundations of Cooperation in Economic Life (Economic Learning and Social Evolution) combinds the theory of cultural evolution ala Boyd and Richerson (and Henrich et al) and the behavioral economy by people like Gintis, Bowles and Fehr. The book works further based on the theory - develops e.g. models for a better social policy etc.

Book discusses an issue which is very central for "being a human being" - co-operation. Book is very informative, very well written even if there are many writers with heterogenous background. Also after the book you kind of get more optimistic about the prospects of humananity.

I am without any formal education in antropology, biology and economics but have read "everything" by Boyd and Richerson - my understanding on economics is based on Microeconomics by Samuel Bowles.

The book was to me a good further reading after the Bowles Microeconomics book. But the book can be read even by someone who does not know about economics even that much as me. The book is not too formal - easy to read actually.

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.

In this book it is showned the fact that the societies are developped like the biologic life. The evolution normally happens in according of mathematical parameters called pay-offs. We can construct a matrix which enables us to understand the possibility of winning. The individuals have the possibility to cooperate or not; the best model is that where the strong reciprocators play with the rational free-riders.