The Company of Strangers: A Natural History of Economic Life [Englisch] [Gebundene Ausgabe]

The Company of Strangers starts with the purchase of a shirt. How is it that exactly the item we want is available in our local store, when we didn't know the farmer who grew the cotton, the dyer who dyed the thread, the tailor who sewed the pieces, nor the shipper who shipped the shirt? Nor did most of these people know each other. Of all the things that might puzzle a Neanderthal who wandered into our time zone, this would be one of the strangest.

In this wonderfully readable book, subtitled "A Natural History of Economic Life", Paul Seabright follows the story of what he calls the "shy, murderous ape" from lonely hunter to homo economicus, confidently mingling with crowds of strangers and daily dependant on numerous people whom he has never met. Amazingly, to our Neanderthal, we have learned to trust strangers.

The question asked in the second half of the book is how far we should rely on such leaderless chains. Some items, such as airline travel and hospital care, don't lend themselves to blind trust. And who is to stop the cotton farmer from polluting the river that the dyer downstream drinks from, or the dyer from polluting the air that the tailor breathes? At what point do the connections between countries or companies become impossibly fragile?

Finally Professor Seabright dismisses recent talk about globalization as "excitable" and dismisses it as a mere continuation of a trend of "at least the last ten thousand years." That does imply that, as far as economics is concerned, camels and the Silk Road are no different from container ships and the internet highway. This is one of several topics in the final chapters of the book which are only touched upon and which would repay our closer attention. Perhaps we can hope that The Company of Strangers is only the first volume in a story to be continued.

Kudos also to Leslie Flis, Tim Flach and Augustin de Berranger for the stunning dust jacket. They too were part of the chain in the production of this highly entertaining and likable book.

Academic press books rarely get the attention they deserve, so I hope this book does not get lost in the mix. Paul Seabright is a terrific writer, and his account in this book of the origins of cooperation is lucid and exciting. Seabright makes the important point that successful economies and societies depend on cooperation, and that even though self-interest would seem to lead us to reject that, time and again we manage to work together. This cooperation with strangers is, though, a fragile thing, and Seabright's conclusion raises the specter that in the future we may need to work a lot harder to remain in the company of strangers. I'm not fully convinced by the book's end, but the argument is worth thinking about. Also see Robert Wright's "Nonzero," Howard Rheingold's "Smart Mobs," and James Surowiecki's "The Wisdom of Crowds" for variations on this argument.

Despite the rough treatment handed to Edward O. Wilson's call for a unification of biology and the social sciences some three decades ago, and despite the hostility still aroused by the notion of "sociobiology" by some traditionalists, the process of integrating social science into natural science appears to be in full swing. Paul Seabright's new book is a welcome and important contribution to this process.

The idea behind sociobiology is that there are many social species, and our understanding of ourselves will be enhanced by analyzing the similarities and differences between human and non-human social systems. The main title of Seabright's book, "In the Company of Strangers" isolates a unique characteristic of human sociality: while several species evolved a highly complex and decentralized division of labor, humans are the only species with extensive cooperation among unrelated individuals.

The maturation of sociobiology since E. O. Wilson's call to arms has included several key strands of research. One is a broadened concept of sociality, in which it is recognized that from the emergence of multi-cellular organisms to the rise of Homo sapiens, major evolutionary transitions have required novel mechanisms facilitating the cooperation among the complex parts of biological wholes. It is now routine, for instance, to note that the disciplining of an aberrant cell in an organism, an ovipositing worker in a bee hive, and a shirking worker in a business enterprise are modeled in a similar manner. A second contribution is gene-culture coevolutionary theory, important because human sociality has been far more cultural than that of any other species.

Seabright's book exemplifies a new breed of economic analysis, seeking answers to fundamental question wherever they are best found, ignoring disciplinary boundaries. A transdisciplinary approach to economics life is nothing new. Adam Smith, for instance, not only wrote The Wealth of Nations, but also The Moral Sentiments, which is perhaps the greatest work of psychology prior to William James. But this tradition was all but buried in the early years of the Twentieth century, only recently to be rediscovered.

Seabright provides elementary, but nonetheless richly fascinating, introductions to such standard economic topics as the division of labor, prices, money, and firms, and addresses such perennial economic problems as unemployment, poverty, environmental destruction, and economic instability. The novelty is that he consistently does so from a long-run evolutionary perspective. This is decidedly not a book on economic policy. Even such traditionally central questions as capitalism versus socialism, the balance between competition and regulation, and the distribution of wealth and income are mentioned only in passing.

The innovation in this book lies in its treatment of the psychological prerequisites of modern economic life. As Seabright notes, "[M]odern society is an opportunistic experiment, founded on a human psychology that had already evolved before human beings ever had to deal with strangers in any systematic way." (p. 4) This psychology has two elements, one of which is well known and the other relatively novel in behavioral science. The well known is what Seabright calls "rational calculation," by which he means a capacity for logical reasoning, information processing, and technique mastery that far exceeds that of any other of Earth's creatures. The novel is what he calls "reciprocity," which is "the willingness to repay kindness with kindness and betray with revenge, even when this is not what rational calculation would recommend." (p. 27)

Two terminological issues are important to set straight from the outset. First, by "reciprocity" Seabright means what has been called "strong reciprocity" (Bowles and Gintis, Nature 415 Jan 2002). The "strong" adjective is meant to distinguish the behavior from the self-interested notion of reciprocity common in the biological literature. Second, Seabright follows a long tradition in economics of considering reciprocity to be non-rational, using the term "rational" when one means "caring only about oneself" as though the terms were synonymous. There is nothing "irrational" about such other-regarding elements of strong reciprocity as returning kindness with kindness and retaliating against someone who has harmed one, even when these behaviors involve net material costs.

Seabright's treatment of human society is innovatory because both biologists and economists have long maintained both that humans are selfish when dealing with non-kin, and their cooperation can be explained by long-term self-interest. Moreover, there is a long tradition, especially on the Left, of faulting capitalism for promoting greed and selfishness, which is at best a partial truth, since market economies at least tolerate, and probably promote, strong reciprocity. Experimental economics, as described by Seabright, has shown that most people are indeed reciprocal and in fact neither economic nor biological models of self-interested cooperation are rarely plausible when they involve groups of more than a few individuals.

Seabright also analyzes the "dark side" of strong reciprocity, which is the tendency to exhibit hostility to "outsiders" in the name of "insider" cooperation. "Cooperation within a group," he observes, "can make the group more lethally aggressive in its dealing with outsiders... [the] systematic killing of unrelated individuals is so common among human beings that... it cannot be described as exceptional, pathological, or disturbed." (pp. 209,53). He concludes that "what Adam Smith famously described as the human propensity to 'truck, barter and exchange' has always coexisted uneasily with a rival temptation to take, bully, and extort." (p. 233).

This book is highly readable and will be accessible to a wide audience. It is, however, weak on details, eschews formal model building and extended analytical argumentation, and hence will serve only as a stepping-stone to the field for those interested in the economy as a dynamically evolving system.