Economists are notorious for emphasizing the selfishness of human motives. The immortal words of Adam Smith are the gateway drug:
It
is not from the benevolence of the butcher, the brewer, or the baker,
that we expect our dinner, but from their regard to their own interest.
We address ourselves, not to their humanity but to their self-love, and
never talk to them of our own necessities but of their advantages.
From here, it is a short trip to the tragedy of the commons, kidney markets, public choice theory, and hundreds of other stories that revolve around the selfishness of man. Economists eat this stuff up.
Yet despite everything, it is child’s play to make a room of economists howl at popular stories of self-interest. Just get the economists’ attention, then deadpan, “Today I donated blood because I want to make sure there will be enough blood for me if I ever need it.” Economists will climb over each other to object, “What are the odds your tiny donation will matter?” “So you’re going to single-handedly keep the blood bank from running dry? Yeah right.” You’ll provoke similar reactions if you declare, “I joined the army to preserve my freedom,” “I voted for Reagan because I couldn’t afford to pay Carter’s taxes” or “I give to charity in case I need charity one day.”
Each of these stories appeals to self-interest, but economists almost uniformly reject them as absurd. Why? Because they ignore another beloved economic insight: the logic of collective action. When actors have a small effect on big social outcomes, and their only incentive to act is the big outcome itself, selfishness urges them to stand down, twiddle their thumbs, free ride, and yawn “Let someone else do it.”
Superficial observers will see further evidence that economists can’t shut up about selfishness. But on reflection, the logic of collective action is compelling evidence for the power of altruism. How so? Because actual human beings often engage in collective action despite the strong selfish case for inaction! Many people give blood without the slightest recompense. Many people voluntarily join the army when they see their country in danger, despite high risk and low wages. Many people donate to charity even though eligibility for charity has nothing to do with their donation history. If altruism is not their motive, what is?
Sure, true believers in ubiquitous selfishness can grasp at straws to protect their dogma. Perhaps people donate blood for the free cookie, join the army because they might run for office one day, or give to charity in order to make business connections. Or maybe millions of average joes are clueless enough to believe that the blood supply, the safety of the free world, and the availability of charity hinge on whatever they personally choose to do.
Anything is possible, but that doesn’t mean that anything is plausible. Once you grasp the logic of collective action, basic economics strongly supports a conclusion that economists rarely advertise: Genuine altruism is all around us. Benevolence doesn’t explain why bakers bake bread for paying customers, but it does explain why blood donors give blood to strangers for free.
READER COMMENTS
Caliban Darklock
Dec 30 2014 at 1:18am
My argument is that people give blood because it makes them feel good about themselves.
At some point in their lives, they were told a series of things that added up to “donating blood is a Good Thing that is done by Good People,” and since we WANT to feel like we are Good People who do Good Things… we will pursue that out of our selfish desire to feel good.
The same applies to pretty much everything, in my book. I like to say that we are naturally SLIM: Selfish, Lazy, Ignorant, and Mean. It’s a survival strategy. The more desperate times become, the more we need to be all of those things to survive, but as times become better we are able to pursue being FAT: Friendly, Accessible, and Tribal. But to protect ourselves from exploitation, we have to retain some degree of our SLIM nature or others will take unfair advantage. All FAT people have SLIM people inside them.
Anonymous
Dec 30 2014 at 1:30am
Does this view of altruism also depend on the idea of rational irrationality? Giving blood as a feel good type of action, and not as an investment for future “use.”
Costs are low (at least for college/university students who have blood drives on campus) because travel is minimal and the body will replenish the blood supply. Therefore, people are more susceptible to being swayed by whatever emotions they have towards helping their fellow man. (Which goes in hand with some form of high expressive value gained and low costs.)
Graham Peterson
Dec 30 2014 at 1:31am
Most of the social world is made up of club good commonses (families, schools, militaries, friend cliques) that people deliberately set up because the transactions costs to organizing the transaction of most things outweigh the benefits of those things at the margin.
Altruism can be described, metaphysically, as the result of self interested action, through a number of channels (Gintis’ gene-culture coevolution is another path), but that only implies, normatively, that altruism and reciprocity are good things that benefit everyone.
Jake W.
Dec 30 2014 at 2:00am
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Jason Collins
Dec 30 2014 at 2:35am
We can explain a good chunk of those actions as signalling.
Steve Roth
Dec 30 2014 at 4:25am
“I fell on the grenade because…”
Peter St Onge
Dec 30 2014 at 4:47am
Bryan, my dissertation was on this. Roughly, that people have an emotional “doomsday trigger” that compels them to act in cost-benefit deficit when they believe particular justice frames are at stake. Not just “preference for justice” rather “the net costlier the better.”
Hirshleifer’s Dark Side of the Force put me there, and the dissertation’s in GMU library.
A
Dec 30 2014 at 5:09am
Caliban Darklock, I don’t read Caplan’s use of “selfishness/altruism” as excluding incentives. The terms seem to imply willfullness, so you would expect that moral considerations ultimately appear before the actor as incentives.
Caliban Darklock
Dec 30 2014 at 5:27am
A, I suggest that if there exists an incentive, the activity is not altruistic.
If I give a person $10 for drugs, and then I take the drugs and they give me an endorphin rush, that is not altruistic.
If I give a person $10 because it makes me feel good about myself, which gives me an endorphin rush, how is that altruistic?
I traded $10 for an endorphin rush either way. What is the rational distinction between them?
john hare
Dec 30 2014 at 5:34am
It’s true that I don’t get a check for donating blood every couple of months. I do though get a tee shirt, blood pressure and cholesterol check, and usually some interesting conversation. I think of it as a free mini-check up.
Being self employed, I can go at convenience when it costs me virtually nothing for a small feel good experience. OTOH, I was annoyed one time when they thanked me saying “you saved someones’ life today”. If I want a line of BS, I’ll go to a used car lot.
There are a number of things I do that could be seen as altruistic from a strangers POV. From my POV though, most of them have at least some selfish component. A fast way to get me to not do something is to try to guilt me into it.
Pajser
Dec 30 2014 at 5:43am
Surprisingly, I find myself in agreement with this Caplan‘s article. Many details are well covered. But why is he still libertarian then?
Wouldn’t it be better that people are more altruists than they are? It seems to me that answer should be yes, and it follows that one shouldn’t just tolerate, but also he should advocate more collective actions. Within some limitations, endlessly opened to debate, but still.
Jason Collins
Dec 30 2014 at 5:55am
A new PNAS study “Participation in warfare for elders is associated with a greater number of wives and children. Ethnography suggests this result is because greater warriorship gives men increased access to bridewealth over the life course.” Plenty of biological reasons to have an instinct for “altruism”.
Ricardo Cruz
Dec 30 2014 at 5:59am
Here in Portugal, blood donors have some benefits. Each patient has a number of visits she can receive at a given time. Blood donors are not subject to this numerus clausulus. Also, I think donors can visit relatives in the hospital at an extended schedule. These things are not big, but it makes them feel superior, which is what the experience is in large part about.
Brad
Dec 30 2014 at 8:16am
Pajer,
I cannot speak for Bryan but my guess is he would say something like this.
Collective action problems are one of the valid arguments for government. And textbook selfish actors will not voluntarily solve these problems so we must use government force to solve them or we wind up in a suboptimal solution if people act like textbook selfish actors.
But people don’t act purely selfishly. Instead they often find voluntary ways to solve collective action problems. We don’t need a blood tax to get enough blood, or a draft to get people to sign up to fight in the Army, etc etc.
So collective action problems are not nearly as big a deal as they seem at first. Then there is less need for government force to solve them. The people will find a way to solve them.
Of course altruism has its limits and personally I am far from convinced that altruism alone can solve all collective action problems. But it does put a dent in the idea that Collective Action Problem=Government Solution.
James
Dec 30 2014 at 8:25am
Pajser,
You seem not to realize that it’s entirely possible to recognize altruism, advocate for more of it and still be a libertarian. Libertarianism is only about violence.
But now you know better!
W. Peden
Dec 30 2014 at 9:04am
James,
One could add that collective actions are VOLUNTARY associations, and by definition don’t require government interventions. Insofar as people are altruistic and don’t need coercion to realise gains from collective actions, this is evidence in favour of more limited government, because coercion becomes unnecessary. A community in which people voluntary pay for services needs no state taxation and provision of public services; a nation that doesn’t have crime needs no police; a world that has no invasions needs no armies. Shame about all the crime and war and free riders!
W. Peden
Dec 30 2014 at 9:11am
One could add that, contrary to the lazy inferences of some people on the left, The Theory of Moral Sentiments is as much a classical liberal treatise as The Wealth of Nations, and in some ways more important to classical liberalism as a political (rather than purely political economy) view. The idea that moral sentiments = social democracy/socialism is the most dangerous threat to classical liberalism.
Dick White
Dec 30 2014 at 9:13am
Surprised that this blog hasn’t referenced Adam Smith’s other observation that we do these things so that we are viewed as”lovely”. Russ Roberts: please call your office.
Hazel Meade
Dec 30 2014 at 9:36am
@Pajser,
First of all, libertarianism is a political philosophy, not a moral philosophy. You’re thinking of Egoism, or Objectivism, which is associated with Ayn Rand. Many people mistakenly conflate libertarianism with egoism, but libertarianism doesn’t really prescribe that you ought to behave selfishly. It is solely about how the state ought to treat individuals, not how individuals ought to behave.
Secondly, libertarianism if anything works better with if humans are somewhat altruistic, because human beings are thus naturally inclined to solve collective action problems without governments to force them. If humans really were selfish and amoral animals then we really would need a Hobbsian state to force everyone to behave. Moreover, libertarianism to some extent relies on voters to NOT behave selfishly and simply vote themselves money from the treasury. If you look around the political spectrum the people advocating that voters behave selfishly are generally on the left. They are always complaining that poor people will vote against their self-interest by not voting for more welfare.
Thirdly, libertarianism does *expect* people to behave selfishly by default, and policies are designed around this assumption, because it is the only reliable guide for human behavior. If you assume that people are going to behave altruistically all the time, you’re in for quite a disappointment when it turns out that they behave selfishly and respond to incentives just as economists expect. This is a major failing of socialist and social-democratic policies – they tend to ignore how humans are likely to respond to incentives and are perpetually surprised when people don’t behave as honest obedient children, but instead figure out ways to game every system you devise.
Hazel Meade
Dec 30 2014 at 9:47am
To the original post …
It’s really all about reputation effects and social signalling. Not that any of this is conscious, but it doesn’t need to be. Humans obviously evolved a strong need to be well regarded by other people in their social group, not to mention some pretty brutal behaviors towards those that violate social norms or don’t protect their reputation. Think of what happens to prostitutes, for example.
I’d tell you to go read Robert Frank’s ‘Passions Within Reason’, or Johnathan Haidt’s ‘The Righteous Mind’, but you probably already have.
Hazel Meade
Dec 30 2014 at 9:52am
@Peter St Onge
How much have you looked at experiments with the Ultimatum Game?
Luke
Dec 30 2014 at 11:21am
I recommend Batson’s Altruism in Humans on this subject.
ColoComment
Dec 30 2014 at 11:32am
I’ll vote with Caliban & Brad on this.
I quite freely acknowledge that I donate blood platelets out of a sense of charitable contribution to my community that makes me “feel good.”
I cannot afford to donate much in the way of money to those I deem “in need,” eg., women’s shelters, or dentistry for poor children. I don’t care to volunteer at soup kitchens, schools, church, hospital, or the like — I work full time & I am very selfish with my “free” time.
Howeve, platelets are a renewable resource that I can give over and over again, and that cost me only about 2 hours of my time (that I am “forced” to spend reading, tah-tah!) once a month. Sure, it makes me feel good to do this — what is wrong with that?
Platelets are used in support of cancer & burn victims, and other medical treatments. Human donation is, at this time, the only source of platelets, and the “acceptable” group for making donations gets smaller & smaller as additional prohibitive diseases are identified.
If not me & others like me, then who?
ThomasH
Dec 30 2014 at 1:56pm
While I do not deny that lots of genuine enough altruism exists, I think that there is not enough to completely eliminate the need for a Pigou tax on carbon emissions and other pollutants or tax-financed transfer payments to low income citizens or other kinds of collective consumption.
W. Peden
Dec 30 2014 at 2:13pm
Hazel Meade,
I like your last point, but I want to add to it a bit: we also want to think about homo economicus when considering policies because she is our worst-case scenario frustrating element: a totally rational, totally self-interested person who will hitch a free ride and steal what isn’t nailed down. It is extremely irresponsible to not consider such people or those who approximate them when running, designing and reforming institutions.
“Hope for the best, prepare for the worst” isn’t a vacuous truism, but a good guide to thinking about politics, and as you say one that is usually ignored by those who find it convenient to assume stupidity and evil among the governed. When people are bad, they are often smart, and people are often not bad.
Hazel Meade
Dec 30 2014 at 2:47pm
W. Peden,
Yes, and I was just thinking how that poses a problem for libertarians too when it comes to democratic governance. It’s hard to keep politicians from handing out favors to interest groups or doling out free money from the public treasury because of the bad incentives that are baked into the political apparatus.
We have less of a problem than the socialists because at least we understand how to avoid perverse incentives in private economic activity, but we still havn’t figured out how to design a political system that isn’t susceptible to corruption.
Quinn
Dec 30 2014 at 3:50pm
I don’t see a fundamental difference between the butcher’s self-interest in the meat he provides for a cost, and the man who donates his blood for nothing. Both of these individuals are doing these things for “selfish” motivations. The donater is doing it because it makes him/her feel good, they believe it is the right thing to do, and they WANT to do so. For many people, donating just feels good.
John
Dec 30 2014 at 4:08pm
Caliban/Quinn/Brad, if any incentive, including “feeling good about giving,” means that an act is not altruistic, can you give any example of an action that you would consider altruistic? Some description of a situation where altruism might occur? Because using your definition I can’t imagine such a situation. E.g. if Alice gives Bob a dollar because she cares deeply about his happiness, nope, that’s not altruistic because Alice just did it to satisfy her own selfish feelings of caring.
I suppose if Alice doesn’t care at all about Bob or Bob’s happiness, and is totally indifferent about giving Bob a dollar or keeping it for herself, but by some chance happens to accidentally give a dollar to Bob–that is altruism, because Alice was sufficiently uncaring and indifferent to free her from suspicion of being altruistic merely to satisfy her own selfish desires.
The point is, your definition makes a certain amount of internal sense–you can choose to define altruism however you want–but it obscures far more than it illuminates. What does it tell us to know that “people never do anything altruistic (where altruism excludes any act of giving, because giving only occurs if it makes the giver happy)”? Not much. What does it tell us to know that “a substantial percentage of people give time and money without any expectation of reciprocation”? Substantially more, I’d say.
Charles
Dec 30 2014 at 4:29pm
Does altruism reduce to social signaling and reputation? Let me speak for myself:
(1) I have lost sleep trying to locate, report and/or assist animals who sounded to be in acute distress– and I certainly wasn’t looking to impress anyone.
(2) When I encounter a situation wherein one party is (I judge) rather clearly suffering sustained injustice at the hands of another party, I often feel a visceral impulse to intervene, even though it’s no apparent skin off my own nose– and whether on not there are any other bystanders around to signal my outrage to.
(3) I’ve on occasion spent money I could certainly have used elsewhere on “third world” charities, just because presumably at least one recipient would stand to benefit enormously at the margin. I feel no great impulse to tell people I know about this.
I don’t imagine that I’m unlike many or most of you folks regarding these sorts of things.
As to the occurrence of a “good feeling”, endorphin rush or other positive incentive: So exactly what? As I understand the term, altruism doesn’t mean (or entail) doing or intending something that either hurts you or brings no emotional satisfaction. It entails only doing or intending something beneficial to another that has no particular bearing on the likely prospects of your own material wellbeing.
I’d be fine calling altruistic a person whose “nature” prompts them to care at least somewhat for the wellbeing of others as a consideration/end in itself. There’s no disqualification if they feel better helping than not helping. The issue is ultimately giving a damn about the fate of something outside your own skin, irrespective of whether its survival and wellbeing is liable to enhance your own material fate.
If you must, call a habitual altruist a person whose (selfish) desires embrace at least a healthy amount of “social interest” (meaning precisely interest in the fates/wellbeing of others). It may be more a matter of cerebral conscience or of spontaneous mirror-neuron firing. Either way, I’ll credit it.
(By the way, lest someone assume otherwise from the above, politically I lean classical liberal myself– but heavy on the consequentialist/quasi-utilitarian basis.)
Quinn
Dec 30 2014 at 4:32pm
I don’t really consider the two to be mutually exclusive. I suppose you can just write it off to me redefining the meanings I suppose, but a person is altruistic because they want to help others and make them happy, and making others happy makes them happy.
Would a person be altruistic if doing so made them angry. Would they donate to Toys for Tots if the laughter of children infuriated them?
If it doesn’t bring them joy, but they do so because of societal pressure, is that still altruism?
Floccina
Dec 30 2014 at 4:48pm
I had a friend who had traveled in the USSR. He said that the toilet paper was very bad. We decided that people might become scientists, doctors and even teachers out of benevolence but if you want someone devote real effort to making better toilet paper you are going to have to pay them.
MikeL
Dec 30 2014 at 8:30pm
@Hazel Meade, great posts as usual. I’ve also seen your posts at Reason. Thank you. Per the definition of altruism; I’ve seen it defined as doing something for others at a cost to yourself. My first introduction to the term “altruism” was in college via an animal behavior course. The cost was in terms of reproductive success, since our behavior is the result of natural selection.
Tom Hickey
Dec 30 2014 at 8:48pm
Choice and action are motivated not only rationally but also non-rationally.
Individual choice and action are based on self-interest. Social choice and action are based on reciprocity. Both are necessary in life.
There is often tension between these types of motivation — rational and non-rational, and individual and social. The process of socialization aims at harmonizing them in an integrated person and good citizen.
Homo economicus is a fiction. The reality is homo socialis. Feral children that were captured remained feral. They acted like animals rather than people.
See also the work of Nobel Laureate in Economics (2009) Elinor Ostrum on collective action and the commons in response to Mancur Olson and Garrett Hardin.
ChrisA
Dec 30 2014 at 10:47pm
My take, people have moral genetic machinery in their minds that was evolved to allow us to cooperate in small groups. As it was evolved (and not designed) it works best only for the situations that it evolved to regulate, that is personal interactions. So most personal interactions are civilized, so that is where we see the most “moral” or altruistic behavior. But we cannot rely on that moral sense for larger issues, as Stalin said, one death is a tragedy, a million deaths is a statistic. In other words, the greater your distance from the personal the more likely you are to act in a selfish manner, you can more easily fool your own moral machinary. Creating a larger scale system therefore has to use something other than altruism. The genius of the market is that it can use our selfish incentives for the common good. Its not that we want people to be selfish, just that we cannot rely on altruism at larger scales.
Julien Couvreur
Dec 31 2014 at 1:26am
1) John brings up a good point. Like Caliban/Quinn/Brad, I too struggle with a definition of altruism that clearly delineates it from selfishness.
All action is done for subjective psychic profit. Even the baker only cares about the money because of the psychic profit he’ll derive from its use.
2) But whether people are altruistic by some materialistic definition (giving stuff without receiving material stuff back) I don’t see any categorical impact to collective action problems (or even economic analysis).
Such valuable problems to solve can be solved even if you assume people are selfish.
If people require payment for giving blood, you would still have blood banks. Part of your health insurance or healthcare costs would pay for blood.
That said, more solutions do become available if many or most people have an altruistic component.
Some of the inputs for the blood bank become cheaper, but it still needs to invest in marketing and operations.
Andrew_FL
Dec 31 2014 at 1:30am
“I do these things because I derive a benefit to my psychic welfare from feeling like a good person.”
Altruism is a myth.
Hazel Meade
Dec 31 2014 at 11:33am
@Charles:
I suppose I was a bit too glib. It’s not ALL social signalling. What I meant is that it reduces to some evoloutionary psychological motivations that are ultimately based in survival. Animals exploit humans natural instincts to protect human children. Responses to injustice have a lot to do with enforcing social norms that benefit us. I’d still put the third world donations under signalling. But yes, not all of the motivations are specifically about social signalling. Sometimes, like with animals, they are emotional responses that evolved for some other purpose that are being “misapplied”, so to speak. Like Gould’s spandrels. House cats seems to have pretty explicitly evolved to exploit human’s parenting instincts.
Phil
Dec 31 2014 at 6:47pm
I see here all kinds of rationalizations for altruistic behavior under the labels of signalling, reputation, collective action, endorphin rushes, etc. The original post concerns collective action, but chooses not to try to explain the isolated and anonymous gift. Because it cannot.
Everyone is focusing on an exchange, because economics demands one. But that approach is logically invalid. True altruism only exists in the ABSENCE of an exchange. It is, by definition, unselfish behavior. To be altruistic means you expect NOTHING in return.
It is one behavior the dismal science is incapable of explaining.
Daublin
Jan 1 2015 at 9:32am
Part of the puzzle is that it’s hard to lie all the time about the sorts of things you are willing to do, especially in cases where the truth is sure to come out.
If you want to be seen as a Good Person that donates blood and saves animals, the easiest way is in fact to be such a person.
John Humphreys
Jan 4 2015 at 6:08am
Being altruistic makes sense for self-interested people if they prefer to be the sort of people who are altruistic. We all try to be the sort of people we want to be in our short trip around this universe.
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