Book Reviews
What Price the Moral High Ground?: Ethical Dilemmas in Competitive Environments.
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By Robert H. Frank. 2004.
Princeton: NJ, Princeton
University Press, Pp. 203, $27.95.
There has been a long-running debate among philosophers, theologians, and economists about the relationship between who we are (human nature) and how we should behave (ethics). Years of observation and introspection have led many to the conclusion that people are self-interested creatures. Thus, Jeremy Bentham could write in his Introduction to the Principles of Morals and Legislation (first published in 1789), “Nature has placed mankind under the governance of two sovereign masters, pain and pleasure. It is for them alone to point out what we ought to do as well as what we shall do. . . . They govern us in all we do, in all we say, in all we think.”
But is the whole story? All of us are aware of self-sacrificing actions taken by others—or by ourselves— that can be explained as “self-interest” only by torturing the definition. Sometimes people set their self-interest aside and engage in selfless behavior—even making a rational case for their actions.
In the Platonic dialogue Crito, Socrates has been condemned to death by an Athenian jury and is awaiting his execution. One of his young students comes to encourage him to escape, appealing to Socrates’ self-interest and sense of justice. Socrates declines the entreaty and explains that he must be guided by sound reason and not the consequences of his actions. He could have left Athens; but by choosing not to, he entered into an implied contract to abide by the city’s laws and institutions. Now that one of its institutions —the criminal justice system— has found him guilty and condemned him to death, he must accept the punishment.
In What Price the Moral High Ground?: Ethical Dilemmas in Competitive Environments, Cornell University economist Robert H. Frank reexamines the rational choice theory of neoclassical economics. Is man homo economicus, Frank asks, motivated solely by a quest to maximize his self-interest? And how can such a person fit into society? “Both economic theory and evolutionary theory, as historically taught, encourage the hard-nosed view that the only way to sustain pro-social behavior is through strict rules and sanctions.”
Frank disagrees. “The expectation is almost certainly incorrect. Indeed, recent theoretical and empirical insights in both economics and biology suggest a more nuanced view. On the empirical front, there is pervasive evidence that in many situations we simply do not behave in narrowly self-interested ways predicted by traditional theories.”
What the author strives to do is show that cooperation isn’t antithetical to a self-interested view of human nature; under certain circumstances it can even compliment the theory. But it seems clear that Frank sees himself as pushing the envelope in taking this position because he expends a fair amount of effort to explain that he hasn’t strayed from the neoclassical fold.
“Indeed, among the growing number of economists working at the intersections of economics and other disciplines in recent years, I come closer than most to embracing the rational choice tradition of neoclassical economics,” Frank writes in the Epilogue. But he is also aware that his “adaptive rationality standard,” as he refers to it, may seem like a break with the past. “Does broadening the traditional neoclassical model’s portrayal of human motivation in these ways challenge any important core beliefs held by economists?”
The answer, he says, is yes and no. “Some elements of the broader motivational repertoire I propose render the invisible hand considerably less powerful than most economists would like to believe. Yet there are other elements that render the invisible hand far more effective than even the most ardent free-market proponent might have dared hope.”
So what is this new model? “Rationality—in both the self-interest and present-aim conceptions— involves the efficient means to achieve given ends. Adaptive rationality retains the requirement that people be efficient in their choice of means. But unlike the other conceptions, which take goals as a given, adaptive rationality regards goals themselves as objects of choice and, as such, subject to a similar efficiency requirement.”
What Frank wants to do is show that at times cooperation with others can be in the individual’s self-interest broadly defined. “The adaptive rationality framework provides theoretical underpinning for a remarkably commonsensical portrait of human nature. It tells us that people are driven by a combination of selfish and altruistic motives, just as experience seems to suggest.”
Frank’s methodology to prove his thesis is to examine human behavior in a series of “one-shot prisoner’s dilemmas” to see if and when people will cooperate and if that cooperation can work to the common good. “I now believe that it is far more prescriptive to say that most people have the capacity to develop bonds of sympathy for specific trading partners under the right set of circumstances.” These bonds encourage cooperation, reducing the number of defectors.
Interestingly, Frank, an economist, wanted to see if economists responded differently than noneconomists to prisoner’s dilemma scenarios. He concludes that economists are one self-interested bunch, and, up to point, the more they study, the more self-interested they get. “We believe our prisoner’s dilemma results constitute the clearest demonstration to date of a large difference in the extent to which economists and noneconomists behave self-interestedly. And our survey of charitable giving lends additional support to the hypothesis that economists are more likely than others to free-ride.”
Hmmm. Is it possible that the reason Western thinkers have often held to what Frank calls the “naked self-interest” view of man is because self-interested economists have written so many books exposing their own internal workings?
What does Frank’s more nuanced” view of man—actually, a view common to many philosophers and theologians—mean for society at large? First, we need public policies that recognize the complexities behind motivation and encourage self-interested people to behave in a way that benefits both themselves and society. For those who don’t play well with others, we need a leviathan to ensure that people are playing by the rules.
Frank devotes little space to explaining how all of this comes
together to promote civil society. If we
give him a generous reading, however,
his vision is one that allows people
to strive to meet their chosen goals
and promotes the common good in an
ordered cosmos—which is exactly
where many of us want to live.
Merrill Matthews
Institute for Policy Innovation
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