Managing selfishness
Written by Steven Schwartz on November 12th, 2008
The police inspector has a problem. Although he knows his two prisoners are guilty, he doesn’t have sufficient evidence to convict either one.
His only hope is to get them to confess, but they refuse to talk. So he separates the prisoners and makes each the following offer: If you and your partner both refuse to talk, you will each receive a six-month prison sentence. If you inform on your partner, you will go free, but your partner will get 10 years. If you both talk, you will each get six years.
Obviously, the prisoners will minimise the time they collectively spend in prison by refusing to talk. But the inspector knows that the temptation to get away with no sentence at all is very great. He is betting that each prisoner will inform on the other and that each will wind up serving six years.
Economists call the choice facing the prisoners the prisoner’s dilemma. In trial runs, economists find that people rarely choose the cooperative course and keep silent; they routinely turn one another in. This seemingly self-destructive behaviour fits a pattern that is all too common in everyday life.
Commuting is an example. Suppose that workers can take an hour-long drive along city streets or they can use the freeway, which normally takes 30 minutes. What happens? Everyone piles on to the freeway and the resulting congestion lengthens their commute to an hour while the streets remain empty.
If traffic were divided equally between the streets and the freeway, half the commuters would get home in 30 minutes and half in one-hour. The average would be 45 minutes. The extra 15 minutes added to the daily commute is the price of anarchy; it is the penalty we pay for allowing people to make self-serving choices while disregarding the effect of their choice on everyone else.
To achieve the optimal travel time for commuters as a whole, we would have to force them to travel along routes that they would not choose for themselves. This seems to contradict one of the major intellectual beliefs of our age - the thesis underlying free-market capitalism - that a community of free people, motivated by self-interest, all competing for goods and resources, will distribute resources more efficiently than any socialist central planner could ever hope to achieve. When it comes to commuting, at least, it does not always work.
Doubts are also arising about how well unfettered choice works in the general economy. For example, Prime Minister Rudd blames the present madness in the financial markets on “extreme capitalism”, which he believes can be tempered by giving government a large role in the economy.
But this “solution” rarely works. The problem is that selfishness is part of human nature. As John Kenneth Galbraith said: “Under capitalism, man exploits man. Under communism, it’s just the opposite.”
So what do we do? We could try to replace individualistic and often anarchic free markets with central planning and government-run enterprises, but this presupposes that the problem we face is technical and that it can be fixed by finding the right set of technical improvements.
Fortunately, there is some hope. The traditional prisoner’s dilemma assumes a one-off encounter. What happens if opponents know that they will face each other more than once? Will they be less likely to renege if they know that their opponents can retaliate the next time around? Will they hold a grudge against those who reneged against them in the past?
According to researchers, in a repeated prisoner’s dilemma, the most successful strategy is to always begin by cooperating (that is, stay silent and serve your six months). If your opponent reneges and turns you in then retaliate on the next round but don’t bare a grudge and try cooperating again on your next encounter. It is important to note that this strategy produced the best outcome for every individual that adopts it, even when other players continue to renege.
Generalising to the present financial woes, the best strategy is to punish those whose behaviours have contributed to the problem (deceitful lenders, ridiculously paid bankers) and then go back to the free market system.
But technical fixes will not solve all our problems. The prisoner’s dilemma transcends the technicalities of politics or economics; it is a moral issue and an educational one.
Until the 20th century, it was taken for granted that the purpose of education was to build character.
Today, the ancient aim of a moral education has been replaced with job preparation. We have produced brilliant bankers and financiers but we have neglected to make them wise. It is time to return education to its roots: to ethics, morality and character. This applies not just to financiers but also to philosophers and lawyers, doctors and economists, dentists and even accountants.
- Steven Schwartz
Dear VC
I am pleased to see that there are some in our community in this 21st century, like yourself, who have the wisdom to call for reflection and going to basics of humanity. The teaching of Gandhian deadly sins is a good way forward.
“We who work in education need to revive our moral purpose. We could start with the seven deadly sins, but I prefer the updated version produced by Mahatma Gandhi:
• Wealth without Work
• Pleasure without Conscience
• Science without Humanity
• Knowledge without Character
• Politics without Principle
• Commerce without Morality
• Worship without Sacrifice
A curriculum based on these would be the basis of a real education revolution.” (Your earlier blog).
I hope and pray that real education revolution will happen in a very near future.
Or we suffer the consequences - more global financial and social crises!
Regards
Zubeda
Steven Scwhartz says: ‘We have produced brilliant bankers and financiers’. But the trouble is that we haven’t, have we? If they were brilliant, we wouldn’t be where we are today.
The encouragement of an ethically based, legislative free (as free as it has been) approach to markets will solve nothing. Even the wisest of men are morally contradictious and dangerously unpredictable – take the example of rampant sexual abuse among priests. Any priest is, by necessity, a veritable theologian, morally concerned – morality alone is their vocation. And yet so many have abused their position. And you think an air-brushing of morality (whose morality?) will fix the problem of greed inherent and raging in liberal democratic systems?
Let’s put aside the lofty rhetoric of utterly vague ethical concepts, and clear a few things up. ‘Morality’ is an institutionalised code of universal laws of conduct - sounds nice. But for it to be applicable to an entire society, every person would have to be of the same religion and, furthermore, denomination. Therefore let us count out of the university curriculum morally laden teaching (as apposed to the teaching of concepts of morality). Macquarie University is no seminary - there’s one down the road if anyone’s interested.
Leaving our form of capitalism as free as it has been – which is what your blog espouses – and simply punishing a few scapegoats will not get us anywhere closer to a utopia capitalism of self-governing, highly ethical financiers. Being a society of secular government and diverse spiritual beliefs, we can not count on intangible morality to steer our economic system. Laws are simply a secular form of morality, this is what keeps things in check; legislative change is needed. Did you advocate leaving SAM exactly how it was and simply punishing a few wrong-doers? NO, the whole structure and regulation of the student union was changed, and the change was near dictated!
Sure, put ethics-based courses in the curriculum for every degree, but the realm of morality is purely personal, as is the makeup and development of one’s ‘character’ (here I indulge your vague lofty rhetoric).
In closing, no matter what, your proposed agenda of ‘ethics, morality and character’ will always be secondary to the number one concern of free-market capitalism: profit.
exactly the point is we are just educating the students to get them good job and career. No one now interested in making them a good human being. And that approach is the root cause of selfishness. When you lure someone to compete with other person to be more successful than him, we are making them selfish.
I agree with you Martha. It’s also an argument that applies to the staff performance review process the university is currently trying to implement. It focuses people on the reward rather than the job - essentially assuming that they are motivated by a selfish desire to do better for themselves.
Because of the nature of our work (there’s not much work in a university that isn’t collaborative in some way), this encourages staff to see their colleagues either as obstacles in the way of, or as a means to achieve, an individual reward. So individual performance “rewards” will come either at the expense of others or by using others. Of course, it doesn’t HAVE to be this way, and not everyone will react in this way, but my point is that the reward system INVITES this sort of reaction, rather than seeking to minimise it and promote greater (genuine) cooperation and collaboration.
I don’t think it’s enough to just shrug and say, “oh, well, selfishness is human nature, we can’t do anything about that”, or (even worse) “selfishness is human nature so let’s leverage it to give the most advantage to the most selfish, in fact, what the hell, let’s base a whole economic system on it”!!!
Yes, I know that’s an oversimplification, but the point remains: why not acknowledge that selfishness is a PART of human nature (as is altruism and cooperation), that all of these have a certain role in individual aspiration and survival, and then say, “well, in higher education, we encourage people to reflect on those parts of their, and society’s, nature, and think about the limitations of too great an emphasis on selfishness, and seek to move beyond that to a more enlightened balance.”
So, yes, Martha, I believe we SHOULD be interested in developing students (and staff) as good human beings. That doesn’t mean we have to setup a narrow definition of what a “good” human being is - rather we need to develop the analytic and critical thinking that enables each person to consider this question and make an informed choice about their own behaviour and motivation. That’s one of the reasons that we see critical and analytic thinking as so important in higher education, and it’s why they’re in the MQ graduate capabilities. They’re also important for enabling us to understand and critique the world around us and the society we live in - an important role for universities (this is why we need institutional autonomy and academic freedom).
As opposed to just ten years ago, far too many professors and students now see themselves as factitious and instrumental products of a cynical, meaningless system. We need the reward points. We need the money. If it means that we become so selfish that we rip ourselves off too, who cares?
High schools are universally and increasingly in the business of programmed intellectual collapse. It has even reached the master’s level in that T.A.s often reject interesting research subjects from students and instruct them to write up a high-school style essay instead.
The debate on master’s programs in Australia is an interesting one since so much of the inept work at military and intelligence institutes in Canada is done at the M.A. level. A serious student in International Relations should take an intensive honors high school social sciences and languages curriculum, then complete in three years an honors B.A., and then enter a tough, working non-traditional doctorate without any detours into these infantile master’s programs.
It is selfish of universities to be involved in the peddling of so much trash, American school rhetoric, IELTS and TOEFL, and their own second-rate English literature courses. That is a dangerous form of institutional parasitism and selfishness. Is Wall Street selfish? Is there any witch doctor who could effect a cure?
It strikes me as odd that there is no psychoanalytic institute that could examine involuted New York systems and say: “You need to be more altruistic here if only because your own selfishness is undermining your own selfishness.”
Being selfish comes in many forms. Perhaps the most irritating is not in that of the man who will steal your wallet when your back is turned, but that of the legion of mediocre shufflers with narrow points of view who like to waste your time pretending they have something to say.
They worm themselves in everywhere, in the media, in governments, in universities. Read some books, I say. Be of more use to yourself and others.