A Lollapalooza Effect – Capitalism & The Death of Wang Yue

Morality and Cuture

Wang Yue, a two-year old Chinese girl, has died after she was run down in the street, then run over again as the driver made off, then ignored by eighteen passers-by and a collection of market traders while she lay injured, before being hit again by another driver who also drove away before, finally, someone pulled her to safety. These events, caught on video by a security camera, have started a furious debate in China over whether the pursuit of profit has destroyed the country’s morality.

More likely, though, is that we’re seeing what happens when multiple behavioural effects combine in the same direction to create a lollapalooza cascade of otherwise inexplicable behavior. For while we may have basic moral principles these can be set aside if our culture encourages us so to do and, if that culture actually provides incentives for us to do so, what you get is children left to die in the street while people walk by.

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Altruism: Signalling Corporate Fitness

Prisoner's Tit-for-Tat

Variations on the Prisoner’s Dilemma game are widespread in financial studies. The idea is that two people are faced with a dilemma: if they both support each other and stay silent they get a short sentence, if they both rat on each other they both go to jail for several years but if one of them spills the beans while the other one doesn’t then the latter is banged up for a long time and the other goes free. On a single shot basis it doesn’t pay to be cooperative.

On the other hand, if the game is repeatedly iterated, the strategy of Tit-for-Tat – start by being cooperative and then simply copy the last action of your opponent turns out to be the best solution, as described by Robert Axelrod. Over long periods of time exploiters get found out and people prepared to cooperate win. This leads to the suggestion that self-interest dictates that we should operate as though we’re altruistic because this is the most successful strategy. So even if we're altuistic we're actually deceiving schemers. Don't you just love the businessman's view of human nature?

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Studying Economics Makes You Mean

Not Predictable

It’s established by now that economics didn’t help stop some of the more spectacular misadventures of the financial community but it’s a bit less obvious that it was directly responsible for many of the mishaps. It’s all tied up with the dirty fact that economists are basically a bunch of untrustworthy, deceitful bums who shouldn’t be left alone with your child’s piggybank, let alone the world’s economy.

The trouble is that economists have a world-view that sees us all as self-interested moneygrubbers without an ethical thought in our heads. Perhaps that’s because that’s a pretty good description of economists themselves: they act like their models are true, the dirty rotten scoundrels.

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When a Dollar’s Not Just a Dollar

Reciprocity Rules

If you have nothing and someone offers you a dollar you’d take it, right? But what if you’ve just seen your aunt give your cousin $100 and told to share it between the two of you? After all, a dollar is still a dollar more than you had a moment ago.

What studies of so-called reciprocity in humans show, time and again, that while we’ll accept the dollar in the first situation we’ll refuse it in the second. Our sense of fairness is offended and, it turns out, that given half a chance half the population will seek revenge on the perpetrators of this swizz and take pleasure in it. So, sometimes, a dollar is not just a dollar.

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Money Can’t Buy Happiness

Wish Carefully For You May Receive

Often the quest for the illusory bird of happiness is equated with the accumulation of ever increasing amounts of money. If only we had more wonga, moula, spondoolies we’d be so much more cheerful. Only when we get the extra dough our partners find that we’re still the same miserable gits that we were before and elope with the gardener, most of our money and the garden gnome collection.

Worse, not only does money not equal happiness, it seems that offering people money for doing things that they would otherwise do out of the goodness of their hearts can destroy their generosity. Money may not make you happy but it can sure as hell make you a miserable son of a bitch.

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