87. Us and Them

Note: This post is the eighty-seventh in a series about government and commercial ethics. Click here for the full listing of the series. The first post in the series has more detail on the book 'Systems of Survival' by Jane Jacobs which inspired this series.

This week, I want to to look more closely at one of the most controversial precepts in the Guardian syndrome, 'be exclusive.'

How to model exclusivity in terms of game theory dynamics seems relatively straight-forward and we have encountered models that apply exclusivity already in discussing the strategy 'tit-for-tat' in 'The Evolution of Cooperation' or in the work of Brian Skyrms in 'The Stag Hunt'

In these models, exclusivity generally takes the form of 'cooperators' (people who choose the cooperative option in a prisoner's dilemma or stag hunt situation) who exclusively cooperate with other cooperators and will defect when they come up against a defector. Naturally this raises questions about how to identify who will cooperate and who will not. It's a thorny enough issue that the famous Lensman sci-fi series by 'Doc' Smith was even named after the device (the 'Lens') that the good guys employed to tell who could be trusted in their fight against the bad guys.

The benefit from appropriate exclusivity is obvious - putting your trust in people you can trust is beneficial while putting your trust in people you can't trust is not.

But despite the obvious benefits, exclusivity is a controversial precept, primarily because, unlike in the hypothetical world of David Gauthier, people don't wear sweatshirts that identify their trustworthiness, so people fall back on measures that are hard to fake such as religion or skin colour.

To see how controversial this is, I'm going to take the example of the closing essay from 'Moral Sentiments and Material Interests' (previously discussed in this series here), "Social Capital, Moral Sentiments and Community Governance by Samuel Bowles and Herbert Gintis.

The gist of this essay is that neither an all powerful government nor a completely unfettered marketplace will lead to optimal economic outcomes and that community governance based on appropriate moral values can often fill in where government and markets fail.

They state that,

"in contrast with states and markets, communities more effectively foster and utilize the incentives that people have traditionally deployed to regulate their common activity: trust, solidarity, reciprocity, reputation, personal pride, respect, vengeance, and retribution, among others."

Of course, that's a nice list of guardian syndrome precepts, which Jane Jacobs observed were generally respected within the ranks of government and contrasted with an opposite commercial moral syndrome, so the positioning of community by the authors as some mid-point on a line that runs from socialism to laissez-faire seems a bit off. They do admit, later on, that the state and community groups need to work together since the state has enforcement powers that community governance groups typically lack.

Gintis and Bowles go on to talk about how it's not just states and markets that can fail, communities can fail too.

"A second 'community failure' is less obvious. Where group membership is the result of individual choices rather than group decisions, the composition of groups is likely to be more culturally and demographically homogenous than any of the members would like, therefore depriving people of valued forms of diversity. To envision this scenario, imagine that the populations of a large number of residential communities are made up of just two types of people easily identified by appearance or speech, and that everyone strongly prefers to be in an integrated group but not to be in a minority. If individuals sort themselves among the communities, there will be a strong tendency for all of the communities to end up perfectly segregated for reasons that Thomas Schelling pointed out in his analysis of neighbourhood tipping. Integrated communities would make everyone better off but they will prove unsustainable if individuals are free to move."

To me, it's not clear how integrated communities will make people better off if nobody wants to be in a minority, but my point is that the authors see exclusiveness as similar in nature to 'white flight¹' and believe that diversity brings self-evident benefits that people are expected to want and get value from.

The authors go on to describe four key elements of a good governance package for communities, the fourth of which is described as follows:

"active advocacy of the conventional liberal ethics of equal treatment and enforcement of conventional anti-discrimination policies. That is is not unrealistic to hope that communities can govern effectively without repugnant behaviours favoring 'us' against 'them' is suggested by the many examples of well-working communities that do not exhibit the ugly parochial and divisive potential of this form of governance."

...

"Other ways of empowering communities can be imagined, but some should be resisted on grounds that they heighten the difficult tradeoffs between good governance and parochialism² mentioned in this chapter. For example, Alesina and Le Ferrara found that among United States localities, participation in church, local service and political groups, as well as other community organizations is substantially higher where income is more equally distributed, even when a host of other possible influences are controlled. Their findings suggest that policies to increase income equality would enhance community governance. But they also found that racially and ethnically diverse localities ... had significantly lower levels of participation. One may hope that pro-community public policy would not seek to increase racial and ethnic homogeneity of groups for this reason."

It's not clear to me how this empirical result squares with the theoretical argument earlier that people are better off in a diverse community, but more importantly note how it is automatically assumed by the authors that the value of diversity outweighs any gains to be made from participation in church, local service and political groups.

Later on the essay has a nice series of quotes from Edmund Burke, Alexis de Toqueville and Mark and Engels all lamenting how commercial morality was replacing guardian morality.

Burke:

"The ago of chivalry is gone. That of Sophisters, economists, and calculators has succeeded."

de Toqueville:

"as for the rest of his fellow citizens, he is close to them but he sees them not .. he touches them but feels them not; he exists but in himself and for himself alone."

Mark and Engels:

"The bourgeoisie ... has put an end to all feudal, patriarchal, idyllic relations ... and has left remaining no nexus between man and man than naked self-interest ... In place of the numberless indefeasible chartered freedoms, it has set up that single unconscionable freedom - free trade."

The authors argue that instead of looking to past systems of values, community governance will thrive if it can solve practical problems today (they don't mention the possibility that this may be one and the same thing) or reference their earlier list of moral values that the community uses to help it achieve solutions to modern problems), but it seems ironic that, having said that, they fail to acknowledge that the biggest stumbling block towards community governance, by their own acknowledgement, is their moral value which puts the value of diversity ahead of the gains from a homogenous community.

Anyway, as with the entire book, the essay is well worth reading, although, I did find the closing paragraph oddly hesitant:

"If we are right that communities work well relative to markets and states where the tasks are qualitative and hard to capture in explicit contracts , and where the conflicts of interest among members of society are limited, it seems likely that extremely unequal societies will be competitively disadvantaged in the future because their structures of privilege and material reward limit the capacity of community governance to facilitate the qualitative interactions that underpin the modern economy."

In the future? Latin America exists now, and has been around for quite a while in its highly unequal and 'competitively disadvantaged' state. I don't think we need to wait for the future to test this theory.


----
¹As an aside, a quick glance at the NY Times interactive census map shows that white flight is an ongoing phenomenon in most of the U.S.

²Notice the religious origin of the word 'parochialism' which evokes a
combination of exclusivity and respect for tradition.