Give Altruists a Chance
Recently, while preparing the ‟Mind and Life Institute” meeting that will be held next April (www.compassionineconomics.org), I had the opportunity to speak with the participants who will take part in this conference, including Ernst Fehr, the renowned Swiss economist. For classical economists, ‟the first principle of Economics is that every agent is actuated only by self-interest” (Francis Edgeworth, as quoted by Amartya Sen). However, according to Ernst Fehr, the fact that many individuals do act in a truly altruistic manner cannot be ignored. In light of this, how can altruism be made to have a greater influence within our societies?
Ernst Fehr's research shows that if we place a group of individuals in a situation where mutual trust plays an important role—such as a cooperative game linked to solid financial results—then approximately 80% of the participants begin to work loyally together. Still, within a group, there are always a few hardened egoists. As the latter keep taking advantage of every opportunity that presents itself, to the detriment of the other participants, the altruists finally grow weary, and the rate of cooperation drops to 10%.
However, if altruists are willing to set up an ‟altruistic punishment” system—to quote Ernst Fehr's expression—by which egoists' transgressions are penalized, albeit at a cost to altruists, the rate of cooperation goes from 80% to nearly 100%.
In the first situation, the group dynamic is sidetracked by the short-term benefits sought by egoists, as was the case during the recent financial crisis, for instance. In the second situation, although altruists cannot change egoists—which unfortunately remains a Utopian undertaking—they can establish a system in which egoists benefit by behaving as if they were altruists.
The lesson then is that it is up to clear-minded altruists to lay out the rules.