Evolved Economics

Doc's post on Nat's blog about morality:

We can approach everything through one of three moral systems:

Morality of self-interest

This gives us "owning", "domination", etc. The Old School. Industrial Age shit. Still prevails in many business plans that are just for killing other companies.

Morality of accounting

We balance everything. "Paying debts", "owing favors". This is our system of justice, by the way. It's all about accounting. (Note the scales of justice symbol.)

Morality of generosity

We give. We are open. We love without expectation of reward, or even accounting. (In fact, when you bring in accounting, you compromise it.) Think about how we give to our spouses, our children, without strings. It pays off, too. But that's fundamentally not what it's about.

This reminded me of a passage in Steven Pinker's The Blank Slate:

The anthropologist Alan Fiske has surveyed the ethnographic literature and found that virtually all human transactions fall into four patterns, each with a distinctive psychology. The first is Communal Sharing: groups of people, such as the members of a family, share things without keeping track of who gets what. The second is Authority Ranking: dominant people confiscate what they want from lower-ranking ones. But the other two types of transaction are defined by exchanges.

The most common kind of exchange is what Fiske calls Equality Matching. Two people exchange goods or favours at different times, and the traded items are identical or at least highly similar or easily comparable. The trading partners assess their debts by simple addition or subtraction and are satisfied when the favours even out. The partners feel the exchange binds them in a relationship, and often people will consummate exchanges just to maintain it. For example, in the trading rings of the Pacific Islands, gifts circulate from chief to chief, and he original giver may eventually get his gift back. (Many Americans suspect this is what happens to Christmas fruitcakes). When someone violates an Equality Matching relationship by taking a benefit without returning it in kind, the other party feels cheated and may retaliate aggressively. Equality Matching is the only mechanism of trade in most hunter-gatherer societies. Fiske notes that it is supported by a mental model of tit-for-tat reciprocity, and Leda Cosmides and John Tooby have shown that this way of thinking comes easily to Americans as well. It appears to be the core of our intuitive economics.

Fiske contrasts Equality Matching with a very different system called Market Pricing, the system of rents, prices, wages and interest rates that underlies modern economics. Market Pricing relies on the mathematics of multiplication, division, fractions and large numbers, together with the social institutions of money, credit, written contracts and complex division of labour. Market Pricing is absent in hunter-gatherer societies, and we know it played no role in our evolutionary history because it relies on technologies like writing, money and formal mathematics which appeared only recently.[...]

When people have different ideas about which of these four modes of interaction applies to a current relationship, the result can range from blank incomprehension to acute discomfort or outright hostility. Think about a dinner guest offering to pay her host for the meal, a person barking an order to a friend, or an employee helping himself to a shrimp off the boss's plate. Misunderstandings in which one person thinks of a transaction in terms of Equality Matching and another thinks in terms of Market Pricing are even more pervasive and can be even more dangerous. They tap into very different psychologies, one of the intuitive and universal, the other rarefied and learned, and clashes between them have been common in recent economic history

David Weinberger, in his speech at F2C today, referred to the spurious appeal to fairness made by publishers of cultural goods, that the creator should be paid for any benefit received from a cultural good. This is stated at more length in Fair but Wrong.
Which brings me back to DRM - Ed Felten notes that Korean music publishers have quantified DRM's value destruction at 40%, which is more than the iTunes differential from CDs, though there the convenience factor is worth something too, though the downloadable movies at twice the price of DVDs scheme is sure to fail.

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