Posted by Big Gav in networks
The Edge has a talk with Wealth of networks author Yochai Benkler on the shortcomings of economic models based purely on (narrowly defined) self interest - THE END OF UNIVERSAL RATIONALITY (via P2P Foundation).
The big question I ask myself is how we start to think much more methodically about human sharing, about the relationship between human interest and human morality and human society. The main moment at which I think you could see the end of an era was when Alan Greenspan testified before the House committee and said, "My predictions about self-interest were wrong. I relied for 40 years on self-interest to work its way up, and it was wrong." For those of us like me who have been working on the Internet for years, it was very clear you couldn't encounter free software and you couldn't encounter Wikipedia and you couldn't encounter all of the wealth of cultural materials that people create and exchange, and the valuable actual software that people create, without an understanding that something much more complex is happening than the dominant ideology of the last 40 years or so. But you could if you weren't looking there, because we were used in the industrial system to think in these terms. ...
The big question I ask myself is how we start to think much more methodically about human sharing, about the relationship between human interest and human morality and human society.
There are lots of different disciplines where people have been doing work for a long time. In many cases, doing work that was peripheral during the period of the rise of selfish rationality. Really we’re talking about a period from about the 1950s until roughly now, when in economics, in political science, in law, in evolutionary biology, you got an increasing relative importance for explanations that depended on individuals acting in ways that maximize their returns, where their returns largely are assumed, though not universally, to be material with self-interest.
Game theory and mechanism design imagines people as acting with self-interest and guile. Political science builds models that are based on self-interested voters and self-interested Senators and self-interested Congressmen, each one trying to understand what is their interest. Is it to get elected again? Is it to maximize a particular position? And each time you build a system around this idea of individuals interacting, trying to maximize their own returns.
In evolutionary biology, for example, one thing that you saw was the rise of very sophisticated ways of explaining behavior that seemed to be altruistic, purely in terms that redounded to the benefit of the individual organism. This is where reciprocity becomes so important. What we see again throughout all of these different disciplines is that somewhere around the 80s in some places, like organizational sociology, somewhere closer to the 90s, if you talk for example about evolutionary biology and the resurgence of the possibility of multi-level selection and group selection where it’s not all reduced to the individual, there are also components that happen at the group level.
Certainly in the context of political science and the emergence of some studies of commons and common property regimes and collective actions — successful collective action models. In economics, we see a substantial work in experimental economics, like Ernst Fehr’s group in Zurich and Sam Bowles and Herb Gintis in Santa Fe, starting to do experiments that show that people deviate from selfish rationality. That people systematically and predictably behave in ways that are much more cooperative than would be predicted by the game theoretical impact.
You’ve got theoretical economists, like Roland Benabou, Jean Tirole, and Matthew Rabin, who begin to build quite sophisticated models that try to implement very different kinds of motivations, like even a sense of self image and a sense of ‘I’m okay’ relative to the world. (There is a beautiful study, for example, from two or three years ago about knowledge workers. (Bruno Frey and Margit Osterloh)) A sense of what’s normal and moral. A sense of what’s socially preferable. You begin to see even in economics in the ’90s and early ’00s, an increased salience and attention and major complications to(?) efforts to build much more sophisticated models of multiple motivations including pro-(Inaudible) motivations.
In organizational sociology, in management science, you look — Toyota production system was the big ah-ha moment, when Toyota came to the U.S. for the first time and created the first NUMMI plant in GM’s Fremont plant in the early ’80s. All of the stories that used to be “oh it’s Japanese culture, it’s something completely different, it’s not about us,” were flipped. One of the worst performing GM plants in 1980 closes down, opens up two years later under Toyota management, almost the entire same employees said the entire union leadership. Within a couple of years it becomes the most productive plant in the U.S.
Who knows what the situation is now, but as of the numbers last year, it continued to be one of the three most productive plants in the U.S. Same people, same industry, very different organizational structure built a lot less on hierarchy, a lot less on precise specification of exactly what everybody needs to do. Much more on teamwork, much more on supporting normative commitment to innovation, to process innovation. And still relatively very constrained. It is the automobile industry.
We’re not talking about high-tech industries. But there you have a very different orientation in terms of setting up the motivation and relationships among workers, between workers and management. You move from having 70 process engineers on the floor telling each employee exactly what to do, to having none. And having the teams have a lot of autonomy on how they do things.