Education has become human capital. Job hunting is now a matter of search costs, tacit contracts, and a desire for leisure. Segregation laws are explained as a preference for discrimination and a willingness to pay the higher prices it entails.
Addiction, terrorism, arms control, the pace of scientific discovery—all have come under the economic magnifying glass. Gary Becker, the foremost of the theorists who extended economic analysis into new areas, some years ago staked the claim that economics was the universal social science that could explain everything.
At a certain point, all this rhetoric began to have real repercussions on everyday life. Another group has analyzed the motives of interest groups and laid the foundations for deregulation. Indeed, there is hardly an area into which the steady gaze of economics has failed to penetrate—all of it a vision built on a conception of man as inherently, relentlessly self-aggrandizing. But how realistic is this conception? How selfish are people, really? For the most part, humanists have simply ignored the spread of the new economic ideas.
Instead, they have continued to talk about right and wrong in their accustomed frameworks—everything from sermons to novels to TV scripts. With the exception of the brilliant year campaign against perfect rationality by Herbert Simon and the guerrilla war of John Kenneth Galbraith , the major universities have produced no sustained criticism by economists of the central tenets of utility theory.
In the last few years, however, a small but growing number of persons has begun to come to grips with assumptions underlying economic interpretations of human nature. Robert B. Reich and Jane Mansbridge have grappled with the significance of the self-interest paradigm for political philosophy, for example.
Howard Margolis and Amitai Etzioni have propounded theories of a dual human nature, competitive and altruistic by turns. Sometimes these disagreements come to the attention of outsiders in the press, like me, on the reasonable grounds that arguments over what constitutes human nature are too important to be left entirely to the experts. There is, however, also a reexamination of rationality going on inside the economics business.
This effort seeks not so much to overturn the idea of universal competition as to take it to a new and subtler level of understanding. If history is any guide, this is the development to watch, for as Paul Samuelson likes to say, economics will be changed by its friends, not its critics. Change there certainly is. Efforts to produce a theory of cooperation or of altruism suggest that much of the certitude about the nature of man that economists have advanced these last years may have been misleading.
There may be a good and logical foundation for doctrines of loyalty and sympathetic understanding after all. From its beginnings nine years ago as a report published in the Journal of Conflict Resolution on a computer tournament among diverse strategies, the argument grew to become a highly successful article in Science magazine it won the Newcomb Cleveland prize in , then a book published to wide acclaim in , then a paperback issued a year later.
Since then, it has been extensively discussed, taught in business schools, employed in arms limitation talks, consulted by labor negotiators. In this situation, two prisoners are accused of a crime, which they did in fact commit. The jailers structure the payoffs to encourage each prisoner to confess: if neither prisoner confesses, both are given light jail sentences of, say, one year.
If one prisoner confesses while the other remains silent, the first goes free while the other receives a heavy sentence of, say, ten years. If both prisoners confess, both get the heavy sentence, but with time off for good behavior—say, five years. Neither one knows what the other is going to do.
So the question is, why would either ever stand pat and say nothing? How is it that cooperation ever gets started? The answer, it turns out, lies in repeated play. In these circumstances, a strategy called Tit for Tat quickly emerged: cooperate on the first move, then follow suit on each successive move; cooperate if your partner cooperates, defect if he defects, at least until the end of the game is in sight then defect no matter what.
What Axelrod forcefully contributed was the much-prized quality of robustness. He showed that Tit for Tat players in reiterated games would find each other and accumulate higher scores than meanies who always defected. He demonstrated how clusters of Tit for Tat players might invade an evolutionary game and win.
He generalized the strategy and found that Tit for Tat worked well against a wide range of counterstrategies simulated on computers as well as in biological systems from bacteria to the most complex species. He published his computer tournament results and proofs of his theoretical propositions.
Businesses really did cooperate, extending each other reciprocal credit, until liquidation loomed. Then trust fell apart, and even old associates vied with each other to see who could file the quickest writs. See all results matching 'mub'. Why are people quitting their jobs? How to deal with an unpredictable boss. Are Biophilic offices the new normal? How to handle unemployment stress. Possible reasons why you're not getting hired.
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