The Tribal Trap
I recently argued that the high informal envy tax common to primitive tribes helps explain why economic growth was so low for so long. Matt McIntosh at Conjectures and Refutations faults my story for failing to “really explain the phenomenon he’s discussing.” He’s right, and it’s time to remedy it. But unlike McIntosh, I will not appeal to social utility, but to individual self-interest.
Put yourself into an envious tribal environment. Anyone who is more successful than anyone else has to share his bounty or lose friends and status. Suppose you accept my argument that this system is highly inefficient. What can you do about it? Not much.
You could stop bugging your most successful neighbors for hand-outs. But that just leaves more for the other beggers. Even if you stealthily returned your hand-out to its original owner, there would only be a miniscule effect on the overall rate of the envy tax. After all, the envy tax is the sum of ALL the begging, and you’re just one person.
You could refuse to share your bounty. But then you’ll quickly be a hated pariah, and maybe your envious neighbors will “accidentally” stick you full of arrows during the next hunt.
You could preach against the envy tax. But that’s probably the surest way of all to become a pariah. You may as well denounce motherhood.
Finally, you could leave the tribe and find another one with a lower envy tax. I’m sure I’d want to do just that if I were in a primitive tribe. Paraphrasing Cartman, “Screw you guys, I’m leaving home!”
Big problem #1: Your tribesmen might kill you for this affront. The chief might demand your head for disloyalty.
Big problem #2: Productive people who want a lower envy tax are only one segment of tribe-leavers. The other segment is jerks and criminals exiled by their own tribe. When you go looking for a new tribe, they’re going to be worried. You can say “They didn’t exile me, I left!” but that’s what they all say. It’s a Stone Age adverse selection problem.
OK, so a high envy tax is an equilibrium. But why does this equilibrium tend to emerge over and over? Again, individual self-interest. You see that your neighbor is doing well. Maybe if you beg he’ll share; and maybe if you give him the evil eye when he turns you down, he’ll think twice about saying no the next time. It’s worth a try!
If a lot of people think this way, of course, the tribe gets a high envy tax, poverty, and stagnation. But the selfishly optimal strategy even in a poor, backwards society is to keep begging. The size of the pie stays small, but at least you’ll get your piece.