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    How To Create Less Selfish Societies? Let People Behave As They Wish, Say Researchers
    By Catarina Amorim | February 6th 2009 04:38 AM | 56 comments | Print | E-mail | Track Comments
    About Catarina

    After many years as a scientist (immunology) at Oxford University I moved into scientific journalism and public understanding of science. I am...

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    Cooperation, despite being now considered the third force of evolution, just behind mutation and natural selection, is difficult to explain in the context of an evolutionary process based on competition between individuals and selfish behaviour. But this puzzle, that has haunted scientists for decades, is now a little closer to be solved by research about to be published on the journal Physical Review Letters.

    The work, by scientists in Portugal and Belgium, reveals that an increasing range of behaviours among the individuals of a population leads to cooperation, supporting the idea that democracy - where individuals are free to act as they wish - is in fact the path for better societies. Jorge Pacheco one of the authors of the study says: "the results support the idea that behavioral differences, on a grand scale, are instrumental in shaping us as the most sophisticated cooperating machines on this planet what is particularly interesting as it contradicts some social and political dogmas – such as Maoism and Stalinism - which, sometimes with rather unfortunate outcomes, have tried to enforce reduced behavioral diversity, supposedly with an aim to improve society"

    Richard Dawkins never gets tired of reminding us that evolution is based on the survival of the fittest and on selfishness. Every cell, every living thing is designed to promote its own survival, if necessary at the expense of everything else. Still, cooperation is very much alive, and more, is widespread, being found in a multitude of living beings from the cells of a multicellular organism to insects and of course humans - the “big cooperators”.

    Some examples are easy to understand, like those among family members, but those are not enough to explain how an apparently disadvantageous behaviour is, nevertheless, so common.

    The key, it seems, lies on specific conditions in which cooperators become the individuals with highest fitness, allowing their expansion within the populations. Very few examples have been found so far, however, and the simple observation of biological processes does not seem to be able to provide many more answers. An alternative is to use mathematical models to look for those conditions that allow cooperators to thrive. 

    With this in mind S. Van Segbroeck, J.M. Pacheco and colleagues from the University of Lisbon, Portugal and the Vrije Universiteit Brussel and the Universite Libre de Bruxelles in Belgium developed an artificial society in which individuals engage in a mathematical game called the “prisoner’s dilemma” (or PD).

    In PD individuals interact with the choice of cooperating or defecting (not cooperate) and while cooperators provide a benefit to their partners (and pay a cost for that) defectors, not only have no costs, but also rip the benefits given by the cooperators. In the basic version of PD defectors “win” and cooperators gradually disappear. But recently it has been found that adaptive social networks - like human populations where individuals change behaviour all the time making new acquaintances and breaking others, continuously shaping and reshaping the social network structure - supported cooperation.

    This led Pacheco and colleagues to ask if specific behavioural diversity within this dynamic world could be linked to cooperators emergence. To answer that they adapted PD to take into account the adaptive social dynamics of human populations, while also introducing behavioural diversity to test if this last parameter affected the viability (and consequently the emergence) of cooperators. As an example of behaviour variability they analysed partner fidelity.

    In fact, when a social connection is established, it is rapidly evaluated and, if disadvantageous – like when one of the partners is a defector – it is broken but while some discontented individuals try to break contact (defect) very rapidly, others take much longer and it is this “time taken to defect unwanted links” that Pacheco and colleagues used as an example of behaviour variability to look for cooperation emergence

    The group started by considering a situation where only two break-up velocities existed - fast and slow - with the population, as a result, being constituted by fast and slow defectors - respectively FD and SD - and fast and slow cooperators (FC and SC) all depending how long the individuals took to break unwanted ties (although the time of a connection depends on both partners). In this situation they found that most of the population turns into SD because these would be the ones with higher gains/higher fitness, as their interactions with cooperators would last longer In the same way, most of the few cooperators surviving will be FC since they are the ones, among cooperators, losing less, as they spend less time interacting with defectors.

    So in this example, again, the model predicts that defectors will be the ones predominant in the population.

    Next, the researchers increased the number of possible defecting speeds to an almost continuum of values between fast and slow, and, to their surprise, many Cs are now capable of surviving and even thrive in the population. The reason for that resides in the fact that many more types of defectors, and not only SD, are able to survive, and those faster Ds will provide an escape hatch for cooperators, which, by interacting mostly with cooperators and preferentially with the faster defectors, now manage, not only to survive, but also to dominate in the population. So in this case cooperators thrive and “invade” the population.

    Van Segbroeck, Pacheco and colleagues’ model reveals that populations in which individuals exhibit higher diversity when handling their social contacts end up being much more cooperative, than those where no such diversity exists. This is particularly interesting if we consider that individuals always behave according to their own narrow-minded preferences and still, despite of this, cooperation blooms

    There are several interesting aspects to this work, and not the least because it helps to understand better the emergence of cooperation, a crucial force for better human societies. But like Pacheco says: "The results are even more exciting, if we take into account that diversity in individual behavior is on the basis of this result. Hence, we expect that societies in which individuals are free to express their inherent differences will be more cooperative than those in which individuals are constrained to exhibit very similar behavior. Of course, to extrapolate from such a simple model into complex Human Societies is both unreasonable and inescapable. In this respect, we may contrast democracies with dictatorships, religious freedom with religious indoctrination, and so on.”

    Another important aspect of the research is the flexibility of the model developed by the team of researchers that can now be used to answer other questions like Pacheco explains: "A great example is epidemics. There the dynamical process between individuals is the contagion due to a biological virus, and the model allows now to determine how the evolution of the number of infected individuals in the community affects and is affected by the dynamical network that supports the individuals."

    Citation: Physical Review Letters – 06 February 2009 online Early Edition, "Reacting differently to adverse ties promotes cooperation in social networks"

    Comments

    Gerhard Adam
    I think this study misses the point completely by focusing on humans and human societies.  There is far too much social, psychological, etc baggage associated with such a debate and it ultimately conveys little beyond the obvious.

    At the biological level, I feel it is better to assess the rise of cooperation among animals as an evolutionary force and evaluate what benefits are derived, as well as the costs before extrapolating them to human endeavors.  Most humans still believe in the fantasy of the "rugged individualist" despite the fact that such an entity has never existed.

    It is also well known in game theory that the "Tit for Tat" strategy can be quite successful in promoting cooperation and exhibits success against virtually every other strategy it encounters.  However a key point in such a strategy is the presumption of future encounters which will affect the defection rate among participants.

    To my mind, this is precisely one of the problems facing society today whereby interactions may not be repetitive and when coupled with the behavior of businesses as participants, there comes a point where defection can be more "profitable" because there are no consequences to future encounters.  For example, if it is unlikely that you will encounter an individual in the future then there is no benefit to cooperation using the Prisoner's Dilemma.   Defection is always the best strategy of an encounter that is only going to occur one time.

    Similarly one of the principles of economics is that businesses will build up a customer base because of repeated encounters and therefore the notion of "the customer is always right" occurs as a cooperative gesture to ensure future patronage.  However, when the customer base becomes large enough (or monopolistic enough), then it doesn't matter if a customer returns (or they may not have any choice in the matter).  In this case the businesses' best strategy is to take advantage of the customer knowing that the majority will always return.  So the loss of customer service becomes a predictable outcome at certain levels. 

    In short, my point is that there is a fine line between freely cooperative behavior and coerced cooperative behavior which is an area that still seems largely unexplored.
    Mundus vult decipi
    Applying these ideas to economics might be a little tough because it's stretching the principles of cooperation and competition. The same action might be cooperative on one level, but competitive on another. You're cooperating with those around you (or your team) but competing with other teams. Or in the case of customer service, you're cooperating with the customer in order to compete with other companies.

    You do see deteriorating levels of customer service (along other qualities) when competition is eliminated. But the concern about this arising due to a monopoly is only theoretical, because historically it has bordered on impossible for companies without government help to get monopolies, keep them for a long time, and on top of that somehow "exploit" their newfound power. In fact, you often see the worst customer service in gov't-granted monopolies - such as the postal service, public schools, the DMV, etc. The main example in the private sector that comes to mind is Home Depot, who made a conscious effort to expand at the detriment of their customer service. And even before the current recession, it was clear that this was a costly mistake for Home Depot (http://www.businessweek.com/magazine/content/06_25/b3989044.htm).

    Popping up a level, say competition between car companies ultimately produces better cars. From a bird's eye view, it might look like these companies "cooperated" to make better cars. But from the ground view, cooperating with their competitors was hardly their real intention.

    The premium that nature has placed on human diversity I think is what makes economics possible: We can always improve and innovate our condition. That's exactly why a centrally planned economy, which might work perfectly for most other species, doesn't work for us.

    It reminds me of that one broadband internet commercial from a few years ago, where the speed was so fast that the husband announces to his wife that he's reached the end of the internet. Obviously that's absurd, but it's for the same reason that we'll never reach the end of economic progress.

    Gerhard Adam
    I think much depends on how we define cooperation and competition.  Using your example of the automakers, it is clear that they've cooperated extensively in their supplier base, and actually sought no competitive advantage amongst themselves.  In addition, it would be hard to offer up a single piece of evidence (beyond the most trivial) to suggest that they are actually in any sort of competition.  It's almost as if they've carved out their respective market niches and no one does much to intrude on the other.

    Part of the point I was trying to make regarding customer service, is when you have a business that is not necessarily monopolistic, but so large as to be able to offset losses and gains because of its huge spread.  In this case, there is an implicit monopoly because no competitor can wield as much financial clout, so there is effectively no competition.  Customer service suffers because for ever customer lost, there are numerous others that continue to shop because of few choices.

    This is classic where a large company drives small businesses out because they can undercut their prices, and then once their competitors are gone, they are effectively a monopoly within that geographic area.  While they don't fit the formal definition of a monopoly, they are in practice.

    It is my contention that the idea of competition to produce better products can only occur when there is sufficient flexibility in ensuring that businesses can fail and start-up to offer up such competition.  In the corporate world, this almost never occurs and so we rarely see any substantive improvements in products because none of them can really afford to compete with each other.  As I mentioned, the automakers want to preserve all of the respective companies, which doesn't sound very competitive to me.
    Mundus vult decipi
    It is my contention that the idea of competition to produce better products can only occur when there is sufficient flexibility in ensuring that businesses can fail and start-up to offer up such competition.

    I think we both agree about this, but differ on the conditions under which this sort of a system can flourish.

    Historically we've learned most about the import of competition when we stop it from occurring (almost like medicine). In this sense countries like Soviet Russia, Cuba, communist China, and 20th century India serve almost as mini-experiments in directly blocking competition, albeit unfortunately with people's lives at stake. To see what an auto industry with absolutely no competition is like, we need look no further than Soviet Russia who failed miserably in trying to manufacture cars, along with almost any other commodity (aside from perhaps military equipment). The Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2008/04/25/AR200804...) reported a revealing anecdote about this:

    Joseph Stalin is said to have screened the 1940 movie "The Grapes of Wrath" in the Soviet Union to showcase the depredations of life under capitalism. Russian audiences watched the final scenes of the Okies' westward trek aboard overladen, broken-down jalopies -- and marveled that in the United States, even poor people had cars.

    The differences between the US auto industry and Soviet Russia's is by no means trivial, as we're actually producing cars, and different companies are producing different ones, year after year. But once again, we have to consider cooperation and competition on all sorts of different levels. Even though consumers these days have an extremely wide variety of autos to choose from across the Big 3, US auto companies do have a shared interest in, say, blocking out foreign competition. Arguably the most savvy innovations in autos over the past decade has come from increased foreign competition, which has come about for a number of reasons, one begin lowered protectionist laws in importing foreign cars. This has forced US automakers to make smaller and more durable models. As for the cooperating on auto-parts, I'm not familiar with this, perhaps you could refer me to a good article.

    Another consideration in the discussion about competition is that we're talking about competition for scarce resources (input) and for desired goods/services (out). Competition between companies can and does span across various industries. In the 19th century Tocqueville noted that large American cities often had multiple newspapers. Now most cities just have one major newspaper, which in all likelihood is barely struggling to stay afloat. This is largely due to the rise of the internet, which has posed a major threat to print newspapers and even to cable TV. Sure there's less competition between newspapers, but this isn't due to less competition overall - anything but. Another example is the trucking industry, which to a degree was originally fueled by railroads who were charging outrageous transportation fees due to an artificial governmental monopoly in rail. Another example is email, which has provided a much-needed alternative to our nationalized postal system.

    Competition in this broader sense - rather than just intra-industry competition - is much alive and well in the US. The classic problem posed by monopolies has yet to pose an actual threat in the absence of government-spawned monopolies. And as the case with the railroad industry shows, even government monopolies in the US have a hard time limiting competition, as it may become more efficient for people to put their resources elsewhere.

    Steve Davis

    The differences between the US auto industry and Soviet Russia's is by no means trivial... The difference is one of perception. Both are broke.

    No even in a state of being broke, there are categorical differences. Consider this quote from Thomas Sowell:

    ...back in the days of the Soviet Union, one of that country's own high officials complained that "hundreds of thousands of motor vehicles stand idle without tires." The fact that complex coordination takes place so seemingly automatically in one economic system that people hardly think about it does not mean that coordination will be similar automatic in another economic system operating on different principles.

    You would never see that in the US b/c the allocation of scarce resources in a free market requires to people plan ahead. Even in the case where the auto industry in the US is not making any cars, you would those resources used to make cars transferred to their next best use. You would not see hundreds of thousands of cars - and more continuing to be producing - laying around waiting for tires.

    Steve Davis
    Of course there are differences. But do criticisms of the Soviet system rule out criticisms of other systems?  Obviously the US system had major flaws. Ultimately, both are broke.
    My point - and I want to reiterate this b/c it ties directly back into the blog post - is that the focus of competition/cooperation is squarely on the allocation of scarce resources. If the American automobile industry suddenly disappeared overnight (presumably due to null demand for automobiles), we'd obviously be in huge economic trouble, but there'd be a surplus of raw materials (& labor) that went into making cars which would be cheaper for other industries that rely on those materials (or similar types of labor). In contrast, in Soviet Russia, you'd see workers continue to manufacture hundreds of thousands of cars that then go into storage houses because they don't have the requisite material to complete them, or the means to distribute them around the country. In sum, a broken automobile industry means something different in each system, as in America it would free up resources better use, yet in Soviet Russia it would continue to tie down those resources. Just consider that image of "hundreds of thousands" of tire-less cars, which are continuing to come off the assembly line, and are then stockpiled in storage for years at a time, while the rest of the country is dirt-poor and starving.

    Steve Davis
    Your point about the advantages of a market economy over a planned economy is quite valid, but that does not mean that this is the whole story. In some important areas a planned or state controlled economy outperforms market economies. We would not have today's computer industry, aerospace technology and so on without state intervention and product development. These types of research projects are simply too long term for private investors to contemplate.
    Gerhard Adam
    "As for the cooperating on auto-parts, I'm not familiar with this, perhaps you could refer me to a good article."

    This point about cooperation occurred when the Big 3 were testifying before Congress and made the startling point that if one of them were to go out of business, then it would have such a severe impact on the supply chain that it could also potentially bring down the other two. 

    While I agree with what you're saying about competition (in principle), the practice is normally quite different, albeit that it's workable for some period of time.  The difficulty occurs when competitors can be prevented from entering the market, or from participating because of the coercive power of the most powerful entities in it.  Once this occurs, then the large companies become effective monopolies because no new competitor can reasonably be expected to enter the market.

    From this point, these large companies will eventually discover that by cooperating they can gain economies of scale that can increase their profits over what they might achieve by competing, so the next phase of this process evolves into cooperation.  This is why virtually every major car company (to use that example) follows the same practices for off-shoring, outsourcing, and suppliers.  From here, the next step is to reduce other costs (such as labor), by forcing competition out to the cheapest source (which may decimate the society they're operating in, but it can increase profits for a time).

    From here we have a reduction in high-paid employment which drives down the demand coupled with a financial industry that thinks that carrying "debt" is a good thing.  With such a large debt, a significant part of disposable income goes towards servicing debt rather than acquiring products, so when we reach a tipping point such as we have, we suddenly find that the ground has fallen away beneath our feet.

    In truth, there isn't a large enough stimulus that can encourage spending when people are effectively being held hostage by debt.  It does no good to talk about personal responsibility, or that they shouldn't have spent so much, because the economy was growing because of precisely such irresponsible behavior, so no one wanted to reign that in.

    Now that the bubble has burst, everyone is fumbling around for solutions that they think can restart this ultimate "greed" machine.  In my opinion, the only effective way to start up the economy again, would be for a nationwide bankruptcy (where basically all unsecured debt is forgiven) and then effectively start over.  While this could hurt some of the financial industries, in truth they're already screwed, so it doesn't much matter.

    I realize I'm giving a grossly simplified view of what I see taking place, but that is a small perspective on what I mean about the cooperative versus competitive spirit among companies.
    Mundus vult decipi
    The problem with listening to the auto industry's rhetoric on this matter is that they'll say anything to stay alive. If it benefited them to receive a gov't surplus in order to make cars without tires and leave them in a warehouse, they'd do it. If it benefited them to lobby congress for protection against foreign competition, they'd that as well.

    Perhaps the broader lesson with regard to cooperation/competition is that when one group has enough power they'll do anything to keep it. On this matter, we probably agree. The question however is by what means? A good portion of companies, particularly those in dying or heavily regulated industries, find that they have more to gain by spending some money lobbying congress instead putting it into their business. Most large corporations I believe have at least a few offices in Washington for this purpose. There maybe an evolutionary parallel to this in wars and looting - if you can't beat them fairly, beat them unfairly.

    This is a legit knock on the free market system b/c the implication is that these companies can weld their power to change the rules of the game. But I think it's more of a reflection on the weakness of our gov't than on free markets. Surely you'd imagine that if our gov't simply said "no, absolutely not" to any company or special interest that came knocking, then companies in trouble wouldn't beg the gov't for help. The analogy would be if the New England Patriots bribed a ref for favorable calls; or if they used double-speak rhetoric by arguing that their legacy should compel refs to charge fewer penalties on them. If such a thing went down, then it would be a knock on corrupt NFL officials, or maybe even more broadly, the sorts of incentives they've set in place to reward corruption; it wouldn't be a knock on the sport of football.

    The problem is that our gov't not only heeds the demands of powerful companies, they also change the rules of the game in the middle of play, both in support of special interests and in support of themselves. Once again, the least competitive sectors tend to be those that are controlled by the gov't. Unfortunately this gov't control exists to varying across sectors, but overall those areas of the economy that are least controlled by gov't tend to be the most competitive/thriving. To go back to my previous example with the trucking industry, after trucking became a well-established and more efficient method to produce goods than the railroad, railroad companies started to complain. The ICC, whose previous scope was limited to rail, began issuing licenses to truckers. But they severely limited the number of licenses, to the extent where at one point 3/4's of the trucking industry's costs were simply spent on purchasing one of these hard to find licenses. This is the essence of how competition is instantaneously eliminated, as innovation and an exponential increase in efficiency were rewarded with such heavy taxes and restrictions that may have as well never occurred. Again most if not all of competition in certain areas has been eliminated thru political power, not thru large successful making better products.

    The Fed more than anyone constantly changes the rules in the middle of the game. Wrote Milton Friedman in 1980:

    The [Federal Reserve] system has not made the same mistake that it made in 1929-33, of permitting or fostering a monetary collapse, but it has made the opposite mistake, of fostering an unduly rapid growth in the quantity of money and so promoting inflation. In addition it has continued by swinging from one extreme to another, to produce not only booms but also recessions, some mild, some sharp. In one respect the system has remained completely consistent throughout. It blames all problems on external influences beyond its control and takes credit for any and all favorable occurrences. It thereby continues to promote the myth that the private economy is unstable while its behavior continues to document the reality that government is today the major source of economic instability.

    The same is eerily true today. For Keyensians, changing the rate of inflation and increasing national debt is thought to be gov't's most powerful economic tools. Theoretically this is largely why the Fed was established. But b/c they've kept inflation and debt up, we're essentially blocked off from these tools. Which isn't to say that the gov't is totally responsible for the current mess, but certainly political greed has played a significant and arguably larger role than corporate greed.

    I hesitate to get into too much of an unrelated political discussion, but in tying this back with the original post, I think it speaks to how one method of competition - albeit an unproductive one - is people changing the rules of the game for their undeserved advantage. This method undoubtedly has a distinctly human and social quality. Humans after all created the game in the first place, and without basic laws covering private property and contracts, which need to be amendable over time, there'd be no economy. Yet there's a no doubt some sort of distinction to be made between, say, new intellectual patent law in response to the internet and limiting the number of trucking licenses so that the railroads can profit.

    Gerhard Adam
    Bear in mind that the relationship you're describing between the government and corporations is exactly the problem.  However instead of faulting the government, let's fault the entire economic system that gave rise to such a fantasy arrangement.

    Why should there even be any such thing as corporations?  I dont' have a problem with individuals that want to join capital for business, but they exist only because the government establishes the rules and laws that allow such entities to exist at all.  It's hardly a wonder that they develop a symbiotic relationship that ensures they each support and nurture each other.
    Mundus vult decipi
    Steve Davis
    You've gone right to the heart of the problem there Gerhard. The first corporations were formed for the completion of specific projects - building a bridge or a dam or a railroad. It was a decision in a US court that gave corporations their modern form, giving them the same rights as individuals, in the process giving them more rights than individuals because a corporation can, in theory, live forever. Hence there was created the environment that gave greater scope for the development of the symbiotic relationships to which you refer. So unfit are some of these corporations today, so divorced from considerations of "economic selection" that it is generally accepted that they are "too big to fail" no matter how much of a drag they are on the economic well-being of the nation. Which is why it is not realistic to draw parallels between economy and ecology. That might have been valid a couple of centuries ago, but those days are gone. 
    Why should there even be any such thing as corporations? I don't have a problem with individuals that want to join capital for business, but they exist only because the government establishes the rules and laws that allow such entities to exist at all. It's hardly a wonder that they develop a symbiotic relationship that ensures they each support and nurture each other.

    Corporations are built on laws that honor private property, contractual agreements, and voluntary exchange. It's no coincidence that they hardly exist in countries without such laws. It's inevitable that you have to bring together scarce resources, capital and people in order to be productive. Gov't bureaucracy certainly provides an alternative, but historically it's proved to be incredibly wasteful and arguably even more corrupt than corporations. Again if none of this made any sense, then in a free market people would just form their own Kibbutzim.

    I suspect, but I'm not sure, that the bad aspects of our system can be weeded out. This is because the incentives that allow corporations to have political power (eg thru lobbying) rest on a very weak foundation: Corporations can exist w/o lobbying, and gov't can exist without leeching from private enterprise. Neither were founded thru these actions. Which is to say that the symbiotic relationship that's emerged between them is no way vital for their survival. It's like a student who begs his professor for a better grade, and a professor who almost implicitly encourages students to beg him for better grades, maybe so he can look more favorable or because he's weak. I don't think that these actions integral to a learning system, even one that over-relies on grades.

    Gerhard Adam
    "Corporations are built on laws that honor private property, contractual agreements, and voluntary exchange."

    I disagree.  They are built precisely so that such things can be hidden from personal responsibility, since only the fictional entity of the "corporation" itself is being held to the standard.  The notion of private property and personal responsibility are intentionally avoided by such an arrangement.

    Corporations were NEVER the standard for doing business and were protected against for over 100 years after the American Revolution.   One of the primary issues in the American Revolution was also freeing themselves from English Corporations which were largely responsible for much of the mischief that gave rise to the revolution in the first place.   However, it was with the government (and laws) that provided a protective shield for these individuals that gave rise to the modern corporate structure. 

    Corporations are fundamentally unnecessary and provide a serious problem in modern economics because of the fact that they are basically non-competitive entities that live and thrive under a completely separate and artificial set of rules.  I don't have a problem with individuals running businesses and making obscene amounts of money, but I do have a problem when they can behave as if they don't exist because they're operating solely under the auspices of the corporate protective umbrella.
    Mundus vult decipi
    Also I'm not seeing your argument that economies of scale & out-sourcing lower wages. It seems to be contradicted by overall increases in American wages over the past century and the difficulties of self-sufficient communes such as Israeli kibbutzim. If this were true then erecting trade sanctions on foreign nations would a blessing rather than a death sentence.

    What I think you're overlooking is that labor is a scarce resource as well, and in this sense there's competition for it. Like anything else it has benefits and (opportunity) costs. Ultimately companies don't seek cheap labor, they seek productive labor. Industries only out-source their labor when it gives them a greater bang for their buck. So they're not out-sourcing high-end labor, they're out-sourcing low-end labor (that is, judging labor by its productivity per cost, not by its wage, although higher paying positions tend to be more productive ones as well).

    It's generally accepted that some corporate debt is OK. This makes sense just as it's accepted that some personal debt is OK. It takes money to make money. But if it were truly such a backwards world that companies valued debt more than profit, then the strongest would be those closest to bankruptcy.

    Gerhard Adam

    Sorry ... my point about debt is that with consumer debt at an all time high and interest rates on that debt at outrageous levels, it's hard to imagine a less productive way to stimulate an economy or keep one growing.

    I'm not arguing about SOME debt, but rather the unprecedented amounts that consumers have been carrying for years, while companies wait with baited breath to see if consumer spending is going to help them meet their quarterly earnings projections.  It's already laughable to see how retailers wait every holiday season to see if consumer's are foolish enough to go further into debt.  It's about time we stopped this silliness and got the economy on a more solid footing instead of allowing financial institutions to make 20-30% profit on every dollar of disposable income spent. 

    Let me correct that last statement, because if it were "disposable income" it wouldn't be debt.  Instead it's "fantasy income" which in many cases will never be realized so we have the creditors helping inflate a bubble that has to burst at some point and invariably shower the entire economy with it's fall-out.

    As another point, don't look at American wages over the past century, but rather over the past two decades and tell me there's been an increase in tangible value.

    As for the "cheap" labor, I beg to differ.  Most companies look for cheap labor and couldn't care less if it is less productive, because they already know that the consumer has no place else to go.  How do you deal with "customer service" when the government agencies themselves are outsourcing the call centers overseas?  How does it help a company to improve customer service?  For most of them, by making it an increasingly frustrating experience they'll be confident that fewer customers even bother to return items or complain.  When you have companies that have financial power greater than many countries, they really don't care much about individual customers since their overall base is so large that, absent an actual consumer revolt, they know they won't be impacted by any disgruntled customers.

    Mundus vult decipi
    I hesitate to wade into this mighty debate, but I object strongly to the assertions that labor is a scarce resource, and that only low-skilled jobs are being outsourced/offshored.

    We have official broad unemployment (U6, which includes discouraged workers who no longer seek, and underemployed who are flipping burgers instead of engineering, or whatever their maximally productive job is) of 13.9% (http://www.bls.gov/news.release/empsit.t12.htm). If you factor in the changes in definition since the early 90s, and calculate unemployment more like other nations do, you come up with about 18% (http://www.shadowstats.com/charts_republish#emp). With nearly 1 out of 5 workers unemployed ot only tenuously employed, labor is not a scarce resource, and even qualified labor is hardly difficult to find.

    Though it is hardly a scientific sampling, I have seen entire departments of qualified and highly skilled system administrators, report developers, programmers, &c offshored to Brazil, India, Indonesia, &c. I have also seen qualified candidates passed over for jobs so that the employer can hire H1B resources for much lower rates, leading to entire IT departments composed of H1B hires (not that I have anything against them, but I do have something against the corporations gaming the system to hire cheaper labor than the market would otherwise bear).

    An argument could be made that American wages are too high (based on environmental degradation, social inequity, even moral decay). That argument could be debated on its merits and faults. But that argument is not being made overtly. Instead the loss of jobs and associated lowering standard of living has been accomplished by accounting gimmicks and externalities (don't even get me started on the changing heuristics of the official inflation rate, and the effect that has on fixed incomes).

    I hesitate to wade into this mighty debate

    On the contrary, we need fresh perspective.

    You're right that labor maybe be *less* scarce in the US these days. Although it'll never simply be not a scarce resource. Even now, corporations are highly seeking labor, they're just looking for more of it abroad. Just as with any physical resource like oil or metal, its value isn't necessarily determined by national borders. The flip side to this of course is that its value can be carried across borders as well. And more efficient work is more efficient work, it doesn't matter where it comes from. What you might see are painful domestic job losses, but you don't see is increased purchasing power from less expensive products/services. A similar thing occus just within a nation's borders following technological innovations.

    As for twisted ways of hiding thigns in accounting or national stats, yeah, no one likes it. But if it's any consolation, those practices have arisen on the heels of America's unprecedented economic growth. They're rotten, but they don't detract from America in general has favored free enterprise and honored property/contract law. We obviously haven't done this perfectly, but we've done it better and longer than almost any other nation, particularly better than those who have waffled in this area, by favoring free enterprise in word and then snatching it up in practice. Citizens in those have countries have had to pay the toughest price for those bad practices, just as we're paying the toughest price for our bad laws. Part of the immediate problem is that more nations are adopting better economic practices, along with democracy in general, as they're coming to realize that it's too costly not to. And for this those nations have truely benefitted. Likewise, one would hope that we'll realize it's too costly to have backwards accounting laws.

    Steve Davis
    America in general has favored free enterprise... we've done it better and longer than almost any other nation. Whoa there! One of the advantages of entering advanced middle age (that's shorthand for getting old) is that you can detect trends in the way society thinks. I can recall back in the 80s and 90s that the unprecedented growth of the Asian Tigers was watched in amazement by the West, and was sneeringly referred to by US commentators as "crony capitalism." When they collapsed in 97 this was incorrectly given as the reason. But who were the crony capitalists all the while? And where are they now? Cap in hand in Washington. So "better and longer" has a hollow ring to it. As for the fable that the US favours free enterprise, the US has always been protectionist, even at the height of the free market revolution.
    That's certainly an advantage of being older than me. In fact if you come across a particularly good article about the fall of the Asian Tigers let me know, as I know little about that.

    I was referring to a longer duration of time tho, namely since the founding of our nation to now. You can't build an economy overnight, or even in a decade. People need to feel secure in where they place their money. Think about it, all things being equal, would you rather place your money in the bank of (a) a country that declared itself "capitalist" but has a modern history of corruption, even including randomly taking over bank (ei, and taking all their money) every couple of decades, along with a poor history of controlling inflation, or (b) a country that honors private property, has never unduly taken over private banks with their accounts, and who despite a few warts in their economic policy and currency control, at the very least has been predictable for the past 200 years?

    It's no coincidence that the first modern nation to truly embrace democracy also had an equal zeal for freedom, private property, small gov't, and free enterprise. These values are necessary for a successful economy; and they might even be sufficient for an economy, insofar as they're not absolute, and pieces of bad legislation can chip away at them here and there, but by all predictions they'll still be around. How you then apply these principles to countries with long histories of communism, followed by having democracy forced upon them, is beyond me.

    Steve Davis
    if you come across a particularly good article about the fall of the Asian Tigers let me know,.. I used to keep newspaper clippings about items such as that which interested me, but its an inefficient way of keeping records, you end up needing a room for that alone.
    The information thats available in economic textbooks and academic journals is not necessarily accurate. There's almost as much bias and rhetoric there as in campaign slogans. The US has never been about small government and really free enterprise, its been about protection for business to build a firm economic base. Every developed economy has followed the same path. And they have all been quite brutal about it. Thats where the term "gunboat diplomacy" came from. There is no economy that has progressed from an undeveloped to a developed level by following free market principles. And the determination of the developed economies to keep it that way can be seen in the current failure of the WTO. As an organisation its almost beyond saving. 
    The US has never been about small government and really free enterprise, its been about protection for business to build a firm economic base

    Well it was founded on limiting the role of gov't. As for protecting business to build a firm a base, do you have any examples? And just out of curiosity, do you think it *was* coincidence that we were the first democracy and that we developed a leading economy? I ask not to debate, but b/c I really want to know. The writings of Tocqueville have heavily influenced how I view things. I'm not sure how familiar you are with him, but he described a mass movement in the Western world towards freedom and equality (a specific brand of equality, not the type Democrats refer to today). When you read him it's clear that democracy in the US didn't just pop up out of no where, it started b/c there was a real need for this sort of system, a need that necessarily correlates with a limited gov't, freedom of speech, etc. I find it hard to separate Tocqueville's ideas from the fact that we went on to become an economic superpower. It seems counter intuitive that our amazing strides in opulence (and not just wealth, but technological innovation, science/education, etc) and that we just happened to be the world's first "experiment in democracy" as well.

    Examples: Banana Republics such as Hondouras and Guatemala, where American military might was used to support puppet dictators who in turn catered to the interests of American fruit companies. deToqueville is wonderful reading, but you should also read some Smedly Butler.

    I agree that Capitalism prospers under a democracy, to a point, but I think that a democracy inevitably schisms into two camps:

    The Haves favor property rights above all (to protect their position). They wish to limit universal sufferage in order to maintain their position as their numbers are ever more rarified by capitalism, red in tooth and claw. The Haves are capitalist, and believe the role of representative (big 'R' Republican) government is to protect the people from the bad decisions of the mob. They are the new aristocracy, and are implicitly elitist (after all, it is implicitly elitist to say that you know what is better for the common man that they themselves know). In the extreme, they overshoot republicanism for fascism (if they are corporatists) or neofeudalism (if they are not).

    The Have Nots favor human rights above all, and tend towards socialism, being as they are on the pointy end of capitalism. They try to expand sufferage to universal, in order to strengthen their own position, and to 'kick the parasitic bums out.' They believe that the role of (big 'D' Democratic) government is to protect people from the excesses of the capitalist class. They are the new Robespierres, and are explicitly egalitarian, but have only limited respect for property rights. In the extreme, they overshoot socialism in favor of communism.

    Now there is certainly cross-polination between the camps, and very few fit firmly on one side or the other, and the political landscape becomes more complex when you layer religion, belief in the rights of the state to intervene in affairs, &c atop it, but this forms the basic axis of Economic belief.

    Now, I explain this to mention one small fact. We are not a democratic government. We are a democratic republic. Even the founding fathers had their aristocrats and their populists. That dichotomy is baked into our founding documents. Therefore our economic tendencies would fall somewhere between capitalism and socialism, most likely as a vibrant free market in the private sphere, with a robust social safety net (with protection of the commons) in the public. Pure unfettered free-market capitalism is as un-american as Maoism or Stalinism.

    Steve Davis
    You're right to the extent that the founding fathers wanted a role for govt as you describe, and they tried to arrange things that way. But it was all downhill from there. I think it was Jefferson who was acutely aware of the potential corrupting influence of banks and corporations. If he were here today he'd be saying I told you so!.
    US agriculture is a good example of a protected industry. Do yourself a favour, get hold of a copy of The New Industrial State by JK Galbraith. It was written in 84 I think, but is still relevant, it will give you a new perspective on economics. 
    If one really believes in the fluidity of the labor market across borders, then one must support open borders, no immigration laws, and supranational labor laws. Since that diffuses the concentration of wealth generated by gaming the international labor arbitage, few people advocating free markets will actually support these measures, as they would involve acting against their own interests.

    The fact of the matter is that corporations and governments operate cross-purposes when it comes to trade. Governments are beholden to their constituents for the well-being of their constituents. Corporations are beholden to their stockholders to maximize profits, the persuit of such may be harmful to the constituents of the parent government of the corporation. Offshoring is a clear example, where operating in the corporate interest (seeking cheap labor) is a poor decision for domestic products (lowering aggregate purchase power of domestic consumers of said products). Lowered cost of the product does little to help those who can no longer afford the product at any cost.

    In my mind, "buy American" provisions in government procurement, while they may cause distortions of pure market value, are justified because they represent the Government doing their job through corporations. The government SHOULD treat it's taxpayers preferentially with its spending of tax dollars. Anything else is an externality, and represents a 'leak' in the social contract that limits the multiplier of each dollar spent (or rather, bleeds off a portion of that multiplier to some non-taxpaying entity).

    Now, sanctions to prohibit foreign products for the private sector are something else entirely, and lead to the Soviet-style distortions listed earlier in the discussion, where native companies have no incentive to improve their product, because they have monopolistic power over the marketplace.

    Also, efficiency measures frequently game the system by ignoring externalities. Is it really more efficient to ship scrap steel to India (where environmental regulations are weak) for parting, then ship the recycled steel to China (where labor is very inexpensive, and where factories are heavily subsidized) for manufacture, and then ship the products back to the US? It seems as though this system is only cost effective because of subsidies on shipping, fuel, and manufacture... i.e. market distortions instituted by governments. Are call centers in Mumbai really more efficient than a call center in Plano? Perhaps only if the quality of the customer service is discounted.

    I am not against personal property rights, and agree that strong property right lead to mutual prosperity to a point, but I believe that when property rights begin encroaching on inalienable human rights, they have been extended too far. A true free market depends on free flow of information, and a parity of knowledge among actors. In the same way, a free and democratic society depends upon a knowledgeable and educated citizenry. Democracy cannot exist without each member having the knowledge to rationally act in their interests, in the same way that a free market cannot exist without market participants having the same knowledge. But much of modern politics / business depends upon concealing information from voters / customers.

    Deceptive business practice, concealing information that may be detrimental to your own cause from the counterparty of a transaction, is fraud. It is normal for courts to order fraudsters to pay restitution to victims of fraud. This is not considered a redistribution. I merely posit that, if governments are opaque, and have used this information to defraud their citizenry, then that is an act of fraud, and the citizens are owed restitution for those losses incurred due to the deceptive practice. Likewise, those who have profited from inequality of information and inequality of access to government should be subject to clawbacks to ameliorate the effects of their misrule.

    You're right that the instinct is to keep wealth within America, but protectionism doesn't create wealth. This insight is what spurred Adam Smith to support capitalism over mercantilism, it's not a very complicated argument. A wealthy country of course can get by with some protectionist measures, but this is because we have enough money to waste. Most studies are pretty clear-cut that protectionism loses more money than it saves. Likewise, it's not very complicated why workers in other nations are more efficient - their output per dollar is less. The added efficiency is equivalent to any innovation that makes life cheaper, be it refrigerators, factories, computers. When the sowing machine was invented French tailors rioted, and for good reason b/c it posed a threat to their livelihood. But the gains that it posed were infinitely greater than the loses.

    Again when you look economic changes in terms of the added efficiency, there's no difference between technological advancement and outsourcing. Take your example of the IT profession, it's only around to begin with b/c the computer so revolutionized the Western World. The internet has had huge economic effects, which have threatened or eliminated tons of professions, from journalism to used book stores to record labels. But no doubt, despite these loses, the internet has been a tremendous advance for society, along with creating/revolutionizing whole sectors. If workers can produce products more efficiently abroad, then what's the difference? Even if it's b/c their gov't subsidizes those industries (which in the long will hurt their economy more than it'll help it), then all the better, as the gov't is presumably giving discounts to non-tax payer consumers in other nations.

    Knowledge is of course important in a democracy/free market, but it's also heavily rewarded. On the whole corporations have spread more knowledge than deception, this even including fraudulent cases that've been rightly punished. Firstly consumers are rewarded for learning about how to best spend their money; websites, along with magazines like Consumer Reports, have fulfilled this demand much better than any gov't agency. Furthermore, knowledge and accountability is built into a brand name. Even in potentially "dangerous" areas like drugs, the threat of lawsuit has arguably had a greater effect upon companies than the FDA. If anything, the FDA (beyond regulating the industry to death) has done harm in making drug companies less accountable. When bad drugs get through the FDA, companies are rightly sued, but the FDA is mostly blamed in the news. If the FDA didn't exist, then demand would create a similar body, just as the movie industry created the MPAA. And furthermore, consumers aren't stupid. It's really not that easy to take advantage of them, particularly as long-term business strategy.

    Just to make one more point here, the last bit about duping consumers feeds right back into the study above about game theory, with deceptive corporations playing the role of the minority defectors, and non-deceptive ones playing the role of the cooperators.

    Gerhard Adam

    There's one problem with the game theory analysis; it presumes that both participants are on an equal footing and an equal cost to losing or winning.

    This isn't true in many encounters, so the results from game theory may not be applicable when one is examining different participants.  While game theory may predict that both participants lose, to one the loss may be trivial or irrelevant while to the other it might be severe.

    Consider the iterative Prisoner's Dilemma where the "Tit for Tat" strategy can produce cooperative behavior.  If one party doesn't care or can readily absorb the loss, then a perpetual defection strategy will ultimately result in the devastating their opponent.  There is no incentive to ever cooperate because they can outlast the competition. 

    This is precisely what happens when legal issues occur between consumers and corporations.  They can generally outlast the competition, so there is little incentive for them to ever do anything except fight.  Unless there is a sufficiently large financial incentive (and a large group) to keep the fight going, a corporation will always win against the consumer.  Even in the cases where much fuss was made about corporate losses, in truth, these occurred in a smattering of cases, where often the judgements are over-turned and frequently the suits only come to trial because of government intervention or other corporations funding the legal fight.

    While legally a corporation and an individual have the same right to trial, in practice the individual hasn't got a chance.

    Mundus vult decipi
    I separate the protectionist measures of restricting the products available to the citizenry from buy local provisions in government procurement. Restricting or even subsidizing certain products over others causes distortions in trade and lowers overall outcomes. And there are certainly cases where government intervention distorts the domestic market as well (for instance, we are still selling off our strategic helium reserves stockpiled when we had LTA craft). But it is inappropriate for government to expend taxpayer dollars, especially ones intended to provide stimulus, on non-taxpaying industry.

    I agree that there is no difference between efficiency gains from industrialization, mechanization, or outsourcing. But that does not address the point i was making. Workers perform two vital functions for the economy, that of laborers, and that of consumers. By pushing labor costs down the race to the bottom, you end up with workers making products that they cannot afford to buy, leading to overproduction, which leads to the decreased monetary cost you laud, but at the cost of shrinking your market. Fordism only failed because of labor arbitages across countries. If the work of an American is worth $18.50 an hour, then why is the same labor worth only $0.75 an hour when performed by a Vietnamese or a Malaysian? Exploitation of the labor arbitage represents an end run around the social contract that Fordism represented. If there were a global organization to safeguard human rights of workers, then and only then will I agree that labor has no borders. Until then, it is naught but new colonialism in it's gentler forms, and outright slavery at its ugliest.

    I think you overestimate the consumer, though. Most people, for most purchases (i.e. not for a car or a house) do not do the research. They assume that the regulatory agencies that they pay for through taxation are looking out for their best interests. The problem is that in many instances, where industry self-regulates or contributes to the funding of the regulatory agency that oversees it, information is deliberately obscured. For example, most people (in 2001, 93% of Americans http://abcnews.go.com/sections/scitech/DailyNews/poll010619.html) when polled show suspicion of GM crops, and would prefer to see them labeled. But because the people's voice is so quiet compared to the lobbyist's cash, there is no labeling requirement. Clearly if the consumer knew what foods contained GM ingredients, Monsanto and other biotechnology companies would find that there was very little demand for their products. Clearly this is a market distortion based on the imbalance of information. Your example of drugs is another example. The enforcement arm of the FDA is chronically underfunded, so most accept industry research with minor auditing. Clearly, given the rash of drug recalls and later industry release of prior knowledge are examples where corporations have had much more information than the FDA, who the consumers trusted to be a watchdog. So the FDA essentially acts to whitewash industry claims, and provide a fig leaf to industry assertions developed under a conflict of interest.

    Gerhard Adam
    "If workers can produce products more efficiently abroad, then what's the difference?"

    Huge difference.  The Nazi's produced products using slave-labor which is probably the most efficient form of labor since it fundamentally costs nothing.  This is precisely the arguments that are sometimes leveled against foreign governments where the laws and protections for workers aren't in place.

    However a more fundamental problem exists.  Many in the U.S. have talked about sending low-paying jobs overseas while high-tech jobs stay here.  Even though this is nonsense, let's pretend for a moment that such a situation is true.

    The problem is that there is no "path" to those high-tech jobs since the entry-level positions are all being outsourced, so there is no place for trainees to enter the marketplace to eventually develop the skills and experience necessary to become the industry leaders. 

    In short, corporations couldn't care less if the U.S. is a major world power or not, and if their economic interests dictate shifting that power, then they would do it.  Any other suggestion smacks of altruism and isn't to be trusted.
    Mundus vult decipi
    Gerhard Adam
    "Just as with any physical resource like oil or metal, its value isn't necessarily determined by national borders."

    Oh but it is.  This is precisely why countries like the U.S. still pay inordinately huge sums of money in maintaining a military and national defense.  This argument from economics flies in the face of social reality.

    When companies can freely move across national boundaries for resources (including labor), then they have essentially been granted free license to decimate the society which gave them birth.  While it might not play well in pure economics, there is a place for corporate responsibility to the society in which they operate and it isn't solely based on efficiency and profitability.

    What good accrues to the U.S. if its economic base is shattered why a corporation claims record profits?  There is supposed to be a relationship (given the government, laws, etc.) whereby the corporation exists to benefit the society in which it operates.  When it ceases to do that, one has to question, why we allow it to continue to exist?  There is no moral obligation to allow corporations an existence and if they don't start helping our society thrive, then why should we allow them to continue to operate?
    Mundus vult decipi
    I think that the relevance of game theory gets exactly at our disagreement, particularly when you consider the roles of voluntary exchange and various corporations. Regarding the former, the difference between opening a factory in an undeveloped nation and slave labor is that no one is forcing the workers to work, just as no one is forcing the consumers to consume. It's this principle of voluntary exchange that glues the market together better than notions of "social responsibility". And furthermore, what is social responsibility? If it's getting the best and least expensive products to the consumer, then they have a responsibility to find the efficient labor. Wages are lower in developing nations for 2 primary reasons: Decreased competition in those countries, and b/c labor there is less productive. On the average, American workers, even tho they're paid more, are more productive. This is due to various factors like our skills, the technology available, our infrastructure, etc.

    Furthermore, look at the deceiving corporations as the defectors and the non-deceiving ones as the cooperators. Over time game theory tells us that the defectors are going to dwindle in number, as a demand will crop up for more cooperators, and people will then go to them. You don't even really need a perfect flow of information, although that certainly helps. In this sense, we don't allow corporations to stay around that aren't benefiting society, by taking our business to those who are. Looking at the car industry for instance, it's no secret that Toyota and Honda make better more efficient and durable cars and use less resources to make them. The Big 3 are in trouble for good reason.

    As for consumer knowledge, the example with asking consumers about GM products is a poor study playing to human psychology, because if you're asking people about whether it should be labeled, then you're presuming it's dangerous in the first place. People don't research everything they buy, but that's because they don't have time. It's not simply that they're assuming the proper the regulation is in place, they're assuming that companies they buy from will be held accountable for their mistakes. This in large part is why people gravitate towards band name items.

    Again what's stopping people from simply not playing the game? Even in the simulations of defectors vs cooperators, people could simply be like 'screw this, I'm just sticking to my family and my circle of friends, I'm not going to give no favors to nobody I don't know'. And don't say it's because of the average man's ignorance about the situation, b/c then you're just talking down to the average man. This is why I think you guys are being way too critical on corporations, because it's really simple not to work for them and not to buy their products.

    Gerhard Adam
    "...because it's really simple not to work for them and not to buy their products."

    Where do you buy your energy, groceries, and gas from?  Who holds your mortgage? 
    Mundus vult decipi
    You would get your needs from a farm, like a Kibbutz.

    And before you call me naive b/c of the lack of available communities for that purpose, do not confuse cause & effect. Which is to say, there have been many attempts to start up such communities in the past, and furthermore even advanced ones like Kibbutzm have had the advantage of taking technology developed from free markets and applying it in a closed system. The inability of most of these communities to thrive pays testament to their inefficiency.

    Steve Davis
    Don't forget that the foundations of modern mathematics, science and technology were laid well before the emergence of free market theory.
    Gerhard Adam
    It doesn't need to be a closed system.  Almost everyone quotes the maxim that "small businesses are the primary creators of new jobs", and yet our entire economic system is set to help those that don't.

    If we are serious about small businesses, then let's promote them and get rid of the corporate behemoths that are a drain and risk on our system.
    Mundus vult decipi
    Gerhard Adam
    So I'd effectively have to "incorporate" to be independent?
    Mundus vult decipi
    Interesting post. Do you think this could account for the importance of diversity in the gene pool (eg, by punishing human incest with increased disease)?

    It also recollects the law of diminishing returns, which is that there's a point in most production systems whereby increased input fails to correspond to increased output. I've always thought that this law makes sense on a practical level - it's like, you can only get so good at one aspects in life, and beyond that point, there's no reason to continue. Or, applied to social cooperation, you can only get so good at sowing the fields, or your neighbors can only bring you so many cupcakes...and then what? Well, someone finds something else to do, or someone finds some other skill to build on.

    There's kind of a parallel in cognitive psychology called Spearman's law of diminishing returns. Spearman had observed that above the average level of intelligence, increases in intelligence were less "unified". It was as if the construct of intelligence held less strongly as you reach the higher ends of intelligence. I've always thought that this law has an evolutionary flavor, as if to say that a basic level of intelligence in various areas is necessary (or in Spearman's case, easily quantifiable), but as intelligence increases, it almost becomes a different, maybe less necessary construct (similar to how happiness isn't the polar opposite of sadness).

    While on cognitive psychology, social cooperation is more likely to involve executive functions (goal-oriented behavior, predicting future behavior, working memory/sense of time, inhibitions, emotional stability). Particularly if individuals are expected to vary the speed at which they cooperate, executive functions are likely to play a large role. ADHD-expert Russell Barkley - who considers ADHD a disorder of executive function - speculated about the role of executive function in evolutionary development (see Barkley, R. A., 2001 Executive functions and self-regulation: An evolutionary neuropsychological perspective. Neuropsychology Review, 11, 1-29.) And one more speculative tie-in is the close connection between ADHD & conduct disorder/antisocial personality, as the latter are essentially disorders of social defection.

    Steve Davis
    Cooperation... now considered the third force of evolution, just behind mutation and natural selection...
    Catarina, WELCOME BACK!
    Richard Dawkins never gets tired of reminding us that evolution is based on the survival of the fittest and on selfishness. Every cell, every living thing is designed to promote its own survival, if necessary at the expense of everything else.

    Dawkins reminds us of no such thing, but goes out of his way to demonstrate how selfish GENES can result in cooperative cells, organisms, and societies. The present study is quite interesting, but it is an extension of the work of Robert Axelrod described in his book The Evolution of Cooperation. I first read about Axelrod in Dawkins' books and, in fact, Dawkins wrote a forward for a later edition of The Evolution of Cooperation.

    I always thought cooperation between members of a society originated from a purely economic need - it's Smith's division of labour and Ricardo's comparitive advantage. You're better at blogging than me, I'm better at cooking food, so we'll employ our skills at what we're best at and then trade to achieve higher consumption.

    Steve Davis
    Dawkins reminds us of no such thing,..
    Oh yes he does. Page 2 The Selfish Gene "This gene selfishness will usually give rise to selfishness in individual behaviuor." I could quote forever, but the point is made. You are correct Marc, in saying that Dawkins presents a possible explanation for cooperation, but the reason for writing his two principal books was to push the view that Catarina described.
    I always thought cooperation between members of a society originated from a purely economic need...
     It does Jonathon, because survival can be regarded as an economic need, in fact it can be regarded as the foundation of economics itself. But the picture you paint is one of cooperation for purely selfish ends. This is based on the misunderstanding that survival instincts are just another form of selfishness. People such as Dawkins have made a career out of exploiting that very misunderstanding. 
    rholley
    “Less Selfish?”  This reminds me of the following from The Screwtape Letters (Letters from a senior devil to a junior devil) by C.S.Lewis:
    Note, once again, the admirable work of our (devil’s) Philological Arm in substituting the negative unselfishness for the Enemy’s (God’s) positive Charity. . . Another great help, where the parties concerned are male and female, is the divergence of view about Unselfishness which we have built up between the sexes.  A woman means by Unselfishness chiefly taking trouble for others; a man means not giving trouble to others.
    Is the balance of the sexes portrayed here still accurate, or have things changed since I were a lad?
    Robert H. Olley / Quondam Physics Department / University of Reading / England
    mossnisse

    I don’t se why cooperation must have any large cost as in the prisoner dilemma? If an animal helps another animal it may have a very little direct cost and the indirect cost that the other animals fitness gets higher and the future competition gets worse is also low if it only cooperate with a small fraction of the population the animal is competing with. It maybe doesn’t work mathematically if you divide up the interactions in discrete events but isn’t the reality more continuous with the a continuous cooperation by two or several individuals that is the most common? <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

    Gerhard Adam

    I think you need to be clear about what is meant by cooperation especially as it pertains to game theory. 

    The little or no cost situation is generally not a cooperative venture as it is one of indifference.  In the absence of any confrontation then game theory isn't applicable, and you're correct, there is no cost to the "cooperating" animal because it isn't actually interacting in any way.

    In the case of a confrontation, then we have to consider what the effect is of trying to seek advantage.  These would be situations such as confronting a herd stallion for mating rights, etc.  In this situation the risks become quite tangible and consideration has to be given for escalation versus simply 'backing off' and going back into one's place.  In this case, it is a zero-sum game, so once again game theory doesn't really come into play because there must be a 'winner' and a 'loser'.

    The game theory aspect of cooperation comes into play when we consider situations like sharing a water source, where it would be quite risky and dangerous to try and control the source, so cooperation is a better strategy.  Another key element is the comparable risks to the participants, so that they both stand to lose or gain by a comparable amount.  There is no real issue in equating a wolf with a rabbit.  However, two wolves confronting each other would be subject to the game theory considerations and probably give rise to cooperation unless a particularly important resource were at stake (which would justify the risks). 
    In the case of two animals approaching a source of food, they could both cooperate and each get some food, one could get aggressive and potentially drive the other off (risking injury put potentially getting all the food - the other gets nothing), or they could both be aggressive (risking injury).    My interpretation of this situation is that both animals must be prepared to be aggressive, so that they aren't exploited, however if aggression can be avoided, then cooperation will emerge and both will get some food.  However, an animal that automatically "backed off" would perpetually lose to signs of aggression and eventually die off.

    I realize that there are a variety of possible interpretations that could be applicable, but that's my take on the issue of "cost" in many of the scenarios that are called "cooperative".

    Mundus vult decipi
    They _totally_ misrepresent Dawkins!!!!!! He has a whole book devoted to explaining altruism on the individual level in a biological context. The condensed version is that individuals and species are not the basic unit of evolution and survival. Individual genes, mere portions of DNA, are. Which means supposedly "disadvantageous" (to an individual) behavior is totally in keeping with what we should expect.

    Democracy does not mean individuals are free to do what they want, it means society collectively determines the rules. People vote to restrict behavior all the time.
    And the fact that people are allowed to behave in diverse ways does not mean they will. People like to fit in.

    And lastly, it is a huge jump to go from "continuum of lengths of time before breaking up with an uncooperative partner leads to more cooperative individuals" to "freedom of behavior leads to more cooperative individuals"
    Why allow constraints on length of time to defection as a variable, but not constraints on cooperative behavior? I propose that in the example they used, if they only allowed for cooperative behavior (thereby restricting options) that would have produced much _more_ cooperative behavior than a continuum of lengths of time to break up.

    Gerhard Adam
    They _totally_ misrepresent Dawkins
    Actually Dawkins isn't misrepresented, because he uses the convoluted logic of selfishness to arrive at some rationalization that this produces altruism.  In effect, it argues that there is no real altruism, because everything is selfishly driven. 

    In addition, Dawkins argues on some vague definition of a gene which bears no resemblance to anything that could reasonably be considered a unit of selection, except as to be so general that it includes everything.  More importantly, it is becoming increasingly apparent that specific genes are insufficient to produce the traits, so to consider them a unit of selection is not just misleading, but incorrect.
    Mundus vult decipi
    Dawkins uses "selfish" in this context only to mean "causes increased likelihood of self-replication".
    This isn't the same way people mean it when talking about human behavior.
    What you are saying is similar to pointing out the helping others feel good to the giver, and claiming that therefor helping isn't being good, but whether it "counts" depends on your definitions.
    My point is that Dawkins does not ever claim that evolution depends on selfishness on the societal - or even individual - level, as is implied here. All of this "research" is well within his existing theoretical framework.

    As to genes: A segment of linear DNA which codes for a specific protein or RNA sequence? His definition doesn't vary from the generally used one, and isn't at all vague.

    And your final argument is like saying that since social behavior is made up of lots of individuals, no one of which is responsible for any one trait of a society, therefor individuals are not the units that determine the direction society takes. Just because a relationship is complex doesn't mean it doesn't exist.

    Gerhard Adam
    Dawkins uses "selfish" in this context only to mean "causes increased likelihood of self-replication".
    Actually Dawkins is much more militant about it than that, going so far as to argue that our bodies are nothing more than machines whose sole purpose is life is to advance the replication of genes.  I agree that the terminology leaves much to be desired, and I can appreciate that Dawkins was applying a liberal dose of "artistic license" in using it, but he has also been quite adamant about just how "selfish" he thinks genes are, and there is no ambiguity in his considering them as being fairly ruthless.

    Now, I understand that Dawkins didn't mean that in a psychological sense, and that there couldn't be any "intent", but this is what happens when one abuses language in that fashion.  At best, one could argue that genes behave in a "self-interested" manner, but that is both intuitive, and quite obvious, since that is the only manner in which a gene can possibly act (since it is unaware of or incapable of "conspiring" with other genes).

    However, once again, the problem occurs because Dawkins insists on using the premise of selfish genes to argue about how "altruism" can arise.  This once again elevates a simple self-interest to a psychological state.

    The truth of the matter is simply a question of how altruism can arise against natural selection, since it would appear that anything which reduces an organism's fitness would necessarily be selected out.  However, this isn't actually a complete nor accurate picture of altruism and it has been "muddied" up by such language usage and imprecise definitions.
    Mundus vult decipi
    I agree with you about his language being imprecise and that language lending itself to this debate.

    I'm not so much meaning to defend him personally, or his way of arguing, but rather the concept "that our bodies are nothing more than machines whose sole purpose is life is to advance the replication of genes" and that "self-interested" genes (interested in their own replication) would be expected to lead to the altruism in behavior which is in fact observed.

    Anyway, this is all a side track from my main original point that this game theory model gave two choices: 1 breaking a relationship either soon, or late, but not in-between, and 2 breaking a relationship at any point in time.
    Given those very specific (and unrealistic) possibilities, the latter was found to be more stable for cooperators.
    It is a non sequitur to go from that to "freedom of behavior encourages cooperation". To compare to a political system which dictates behavior, you would have to model a system in which there was a significant external cost to defecting.

    Personally, I think the idea of this article and research is quite profound. My entire life I have been told it is better to work as a team and cooperate with others. In most instances that is true, but no one ever teaches the importance of our individualism. There are many important documents and books that covet individuals seeking their own self-interest.

    (1) The United States Declaration of Independence, Constitution and Bill of Rights. The United States is not a Democracy. A Democracy is driven by the majority... and that majority has complete say over the minority. Our nation is a Republic. A Republic recognizes the INDIVIDUAL as sovereign and emphasizes the importance of the individual's choice, actions and rights. The founding fathers believed that a Democracy, driven by the rights of the majority, would be the WORST form of government could possibly establish. As a Republic, individuals receive their rights from God and the power of the government is limited by the Constitution.

    (2) Racism - Racism can not exists if one approaches people as individuals. Collectivism allows for racism, sexism, agism, etc.... If you meet someone of Asian decent lets say, and your experience with that person is terrible, you might be incline to collect all Asians in the same category, but if you believe in the power of individualism, you will look past that experience in your next encounter with an Asian. Simply put, collectivism allows for generalizations. Individualism allows you to access each person as you meet them without grouping them based on race, sex, religion...etc.

    (3) Christ - Jesus Christ also emphasized the importance of the individual. Whether you believe he's the son of God or not is irrelevant, because I'm simply making a point about individualism. Christ teaches that we must recognize him as the one true God. That it is an individual decision that you must make on your own... that no one else can make for you. He also taught through discipleship that we must "fill our own cup" before we have the ability to help others. Only after making ourselves whole as individuals can we possibly give ourselves to others.

    So before we can build a strong team or group, the individuals must understand their roles and are responsible for maintaining their positive state. Ever read "Lone Survivor" the book by Marcus Luttrel and his navy seal team in Afghanistan? If you do you'll see that even the most professional cooperation from our Navy Seals is built upon the individuals understanding that they must preserve their own safety and understand their own responsibility so that the unit can survive. A common self-interest is the true foundation of cooperation.

    Gerhard Adam
    The problem depends on which aspect of humans (or any social animal) one is examining.  The external manifestation is that of a social animal that operates as a collective.  Within any social group, each organism behaves competitively for position within the group. 

    So the whole issue of individualism or collectivism depends on the perspective one is examining.  However to assign a single attribute to apply in a global sense, will always be incorrect.
    Mundus vult decipi
    I like your article, Catarina, and I agree with what you have written. : )
    Thanks Eric, I have adopted the zen approach that any debate is always positive (hummming now ;) )