Does Altruism Have a Place in Modern Economics?

Where do kindness and altruism come from? Nature or nurture, culture or evolution?

These are the questions that George Price sought to answer, and in the process became one of the most respected evolutionary biologists of the 20th century. I’ve been reading about Price and his life story in a compelling book, part biography, part scientific history by Oren Harman: The Price of Altruism.

Price’s life is fascinating. He did not lead a happy life, struggled with his purpose in life, was plagued by health problems and depression. Yet this did not stop him from being a truly insightful and original thinker, and in the later years a true samaritan for the downtrodden, before committing suicide, alone in a cold London squat. The man was quickly forgotten, but his greatest contribution to science is enduring:

In a nutshell, Price succeeded, armed with great intelligence and curiosity, yet with no training in evolutionary biology, to solve one of the great moral riddles of our time: Is altruism part of our DNA and therefore selected over the history of life on earth as a characteristic that would promote the survival of a species, or are we genetically neutral towards altruism, and is our propensity to do good – and evil – purely a result of culture and environment.

George Price, building on the work of great scientists before him and in particular Bill Hamilton,  devised a mathematical formula that showed that cooperation and kindness would evolve not just within families (kin selection) but also within groups (group selection) as long as there was an expectation of return.

However, this return did not need to apply to the individual. In other words, a ‘fitter’ species – to use Darwin’s terminology – is likely to evolve if individuals within that species show altruism towards others, as long as this is returned to the species as a whole.

In other words, altruism has an equal mathematical chance in the natural process selection than selfishness. The survival of the fittest does allow for altruism.

This was surprising to me. I’d always assumed that the dynamics of natural selection applied to physical properties, not mental ones. These findings led to 2 further questions:

  1. Does it matter that altruism is driven by group selection, i.e. enlightened self-interest?
    Many writers since Price’s principle was first published – and Price himself – believed that altruism should be ‘pure’ and the thought that kindness was driven by a genetic need for survival was a depressing insight into the selfish nature of the species, including the human race.
    I’ve always been a pragmatist when it comes to these things. What matters is the outcome, not the rationale. There is nothing wrong with doing good deeds because it helps us, as long as the ultimate outcome is that more good gets done. For instance, there is nothing wrong with companies embracing sustainability because they believe there is a strong business case supporting it. The outcome remains the same: more sustainable outcomes and a more sustainable economy. Which leads to the second question:
  2. Do these insights have anything to teach us about how we achieve a better economy, an economy that works?
    Shortly before his untimely death, Price had expressed a wish to turn his attention to the relevance of altruism in economic thought. Sadly, he died before doing so, but I can’t help but wonder what he would have thought of our current economic paradigm. Many people have described neo-classical economics as a form of Darwinian economics, where only the strongest survive through the judgment of the markets and that optimum outcome for society will be achieved as a result. It is interesting to note that Adam Smith, the spiritual father of capitalism was a proponent of enlightened self-interest, believe that economic actors are more likely to succeed if they meet the needs of the many – and acknowledging that some level of government intervention is needed to maintain a strong society.
    It is only since Milton Friedman and the Chicago school that a genuine ‘survival of the fittest’ economic model has taken hold, and has become the dominant political and cultural meme of our time. Altruism and collaboration, have a very limited role. We live in a ‘Me’ society.
    But if we apply Price’s theory to economics, we realize that groups (i.e. economies) are more likely to succeed if people act in accordance to the needs of the many, rather than the needs of the few. The evidence from both economic and social sciences supports this:

Thomas Piketty demonstrated in ‘Capital in the 21st Century’ that without some form of regulation inequality within society will increase as wealth grows faster than income.

Wilkinson and Pickett have shown in ‘The Spirit Level’ that unequal societies are less likely to produce desirable outcomes over time for both rich and poor.

Enlightened self-interest does seem to work at this level too. The difference is that time is on the side of evolution. It takes thousands, if not millions of years for new behaviors to become part of a species’ DNA.

Time is not on the side of healthy economies. We need to act fast to avoid mass extinction or the consequences of runaway climate change. This was a red thread at this year’s World Economic Forum, with many world leaders calling for action.

Yet within our ‘Me’ society, nobody seems willing to take the first bold step. Something has to shift before the Paris Climate summit, and maybe George Price’s most enduring legacy will be to help us realize that we’re all better off in a ‘We’ society.

Not bad for an obscure evolutionary biologist.