Selfishness goes only so far, we also like a fair system

Ross Gittins finds that Selfishness goes only so far, we also like a fair system.

In the minds of many people - including many economists - capitalist economies are powered by selfishness. No, not quite.

The father of economics, Adam Smith, seemed to establish that proposition in 1776 in a famous quote from his book, The Wealth Of Nations: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."

But Smith's views are rather more complicated than that. In the book he wrote 17 years earlier, The Theory Of Moral Sentiments, he observed that "how selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it".

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He concludes:

Why have humans evolved in a way that makes them worry about the welfare of the group rather than just themselves and their close relations? Probably because groups with pro-social norms outcompete groups that are deficient in this respect.

It's not surprising that the great religions - Judaism, Christianity, Buddhism, Islam, Hinduism, and so forth - stress the pro-social norms such as helping your neighbour, giving each his due and turning the other cheek.

These research conclusions have implications for government policy. Economists, convinced of people's simple selfishness, usually propose to deal with antisocial behaviour by raising the material cost of that behaviour. Increase the penalty if you're caught and increase the chance of being caught.

But this research suggests a principal purpose of publicly proclaimed laws and regulations is to stigmatise anti-social behaviour and thereby influence people's values and codes of behaviour.

To put it more positively, the authors say that "effective policies are those that support socially valued outcomes not only by harnessing selfish motives to socially valued ends, but also by evoking, cultivating and empowering public-spirited motives".

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In other words, humans survived by being cooperative rather than competitive.

It looks possible for a Communist society to enforce social norms by means other than force.