About once every blue moon, Blogosophical Explanations springs to life, and there was another posting there as recently as December 14th of last year. It included this, from Herb Gintis, Emeritus Professor of Economics at the University of Massachusetts:
… Economists are fond of using the Folk Theorem of repeated games and the Tit-for-Tat simulations to argue that human cooperation can be understood in terms of long-run, enlightened self-interest, but we will argue in chapter 11 that this view is profoundly incorrect. There are two major problems with the idea that cooperation can be understood in terms of long-run self-interest (charitably interpreted to include regard for kin). The first is that self-interest results in cooperation only when agents are sufficiently future-oriented (i.e., the discount rate is very low); but in situations where a social system is threatened and likely to be destroyed, cooperation is most central to survival and agents are likely to be very present-oriented, since the probability of future interactions is low. Therefore, societies in which cooperation is based on long-run self-interest will invariably collapse when seriously threatened. The second problem is that there is sizable evidence that we are considerably more prosocial than is predicted by the long-run self-interest models.
Except in the context of anonymous market interactions, the idea that human beings are self-interested is particularly implausible. Indeed, some of the major predictive failures of game theory stem from not recognizing the positive and negative aspects of preference and welfare interdependence. Homo economicus might be reasonably described as a sociopath if he were to be set loose in society.
There are many more tangents there to fly off at than one little Samizdata posting could possibly have space for, but allow me to indulge in just one.
As a description of the full panoply of human society, Tit-for-Tat is surely every bit as inadequate as Gintis says it is. All humans, provided only that they are allowed to, train each other to be more axiomatically cooperative than that, in societies which expect to survive past their next big collective crisis.
But how about Tit-for-Tat as a description both of the nature of actually existing “Soviet man” and of the collapse of the Soviet system?
… but in situations where a social system is threatened and likely to be destroyed, cooperation is most central to survival and agents are likely to be very present-oriented, since the probability of future interactions is low. Therefore, societies in which cooperation is based on long-run self-interest will invariably collapse when seriously threatened. …
… Homo economicus might be reasonably described as a sociopath if he were to be set loose in society.
As descriptions of a successful society, these two statements are woefully insufficient, but as descriptions of what did happen in the old USSR, both to the system as a whole and to the character of the individuals who ended up running it, are they not uncannily accurate? Was Homo Sovieticus not also Homo Economicus? Yes he was.
But although Soviet individuals were all Economicus (apart from some of the dissidents), the system as a whole was Sovieticus, thus giving them the worst of all possible worlds.
In free societies, the system is much more Economicus, but the individuals – for that very reason – become much more Sovieticus, in the original aspirational sense hoped for by the first generation of actually existing Homo Sovieticus (the generation which, in an insane fit of misplaced team spirit, allowed itself to be wiped out by the final version).
One of the deeper ironies of actually existing socialism (or “socialism” as we samizdatistas like to call it) is that socialism recreates in the purest form the precise vices that it wrongly attributes to “capitalism”. Actually existing Homo Sovieticus became precisely the selfish calculator of short-term and long-term self-interest, with absolutely no sense whatsoever of citizenship, collective cultural enterprise, social teamwork, shared civilisation – with absolutely no altruism, other than towards his own family and in particular towards his own descendants. Thus, when the Soviet system as a whole was threatened with collapse, actually existing Homo Sovieticus did nothing – absolutely nothing – to save that system. It simply wasn’t in his personal interest.
So although game theory may not be very good at explaining the social harmonies and social complexities to be found in a successful and interesting place like Massachusetts, it is great at making sense of the old USSR.