Can Selfishness Save the Environment?

Conventional wisdom has it that the way to avert global ecological disaster is to persuade people to change their selfish habits for the common good. A more sensible approach would be to tap a boundless and renewable resource: the human propensity for thinking mainly of short term self-interest

JOHN Hildebrand who has lived in the Artesian Valley, near Fowler, Kansas, since he was two years old, remembers why the valley has the name it does. "There were hundreds of natural springs in this valley. If you drilled a well for your house, the natural water pressure was enough to go through your hot-water system and out the shower head." There were marshes in Fowler in the 1920s, where cattle sank to their bellies in mud. And the early settlers went boating down Crooked Creek, in the shade of the cottonwoods, as far as Meade, twelve miles away.

Today the creek is dry, the bogs and the springs have gone, and the inhabitants of Fowler must dig deeper and deeper wells to bring up water. The reason is plain enough: seen from the air, the surrounding land is pockmarked with giant discs of green—quarter-section pivot-irrigation systems water rich crops of corn, steadily depleting the underlying aquifer. Everybody in Fowler knows what is happening, but it is in nobody's interest to cut down his own consumption of water. That would just leave more for somebody else.

Five thousand miles to the east, near the Spanish city of Valencia, the waters of the River Turia are shared by some 15,000 farmers in an arrangement that dates back at least 550 years and probably longer. Each farmer, when his turn comes, takes as much water as he needs from the distributory canal and wastes none. He is discouraged from cheating— watering out of turn—merely by the watchful eyes of his neighbors above and below him on the canal. If they have a grievance, they can take it to the Tribunal de las Aguas, which meets on Thursday mornings outside the Apostles' door of the Cathedral of Valencia. Records dating back to the 1400s suggest that cheating is rare. The huerta of Valencia is a profitable region, growing at least two crops a year.

Two irrigation systems: one sustainable, equitable, and long-lived, the other a doomed free-for-all. Two case histories cited by political scientists who struggle to understand the persistent human failure to solve "common-pool resource problems." Two models for how the planet Earth might be managed in an age of global warming. The atmosphere is just like the aquifer beneath Fowler or the waters of the Turia: limited and shared. The only way we can be sure not to abuse it is by self restraint. And yet nobody knows how best to persuade the human race to exercise self-restraint.

At the center of all environmentalism lies a problem: whether to appeal to the heart or to the head—whether to urge people to make sacrifices in behalf of the planet or to accept that they will not, and instead rig the economic choices so that they find it rational to be environmentalist. It is a problem that most activists in the environmental movement barely pause to recognize. Good environmental practice is compatible with growth, they insist, so it is rational as well as moral. Yet if this were so, good environmental practice would pay for itself, and there would be no need to pass laws to deter polluters or regulate emissions. A country or a firm that cut corners on pollution control would have no cost advantage over its rivals.

Those who do recognize this problem often conclude that their appeals should not be made to self-interest but rather should be couched in terms of sacrifice, selflessness, or, increasingly, moral shame.

We believe they are wrong. Our evidence comes from a surprising convergence of ideas in two disciplines that are normally on very different tracks: economics and biology. It is a convergence of which most economists and biologists are still ignorant, but a few have begun to notice. "I can talk to evolutionary biologists," says Paul Romer, an economist at the University of California at Berkeley and the Canadian Institute for Advanced Research, in Toronto, "because, like me, they think individuals are important. Sociologists still talk more of the action of classes rather than individuals." Gary Becker, who won the Nobel Prize in economics last year, has been reading biological treatises for years; Paul Samuelson, who won it more than twenty years ago, has published several papers recently applying economic principles to biological problems. And biologists such as John Maynard Smith and William Hamilton have been raiding economics for an equally long time. Not that all economists and biologists agree—that would be impossible. But there are emerging orthodoxies in both disciplines that are strikingly parallel.

The last time that biology and economics were engaged was in the Social Darwinism of Herbert Spencer and Francis Galton. The precedent is not encouraging. The economists used the biologists' idea of survival of the fittest to justify everything from inequalities of wealth to racism and eugenics. So most academics are likely to be rightly wary of what comes from the new entente. But they need not fear. This obsession is not with struggle but with cooperation.


BIOLOGISTS and economists agree that cooperation cannot be taken for granted. People and animals will cooperate only if they as individuals are given reasons to do so. For economists that means economic incentives; for biologists it means the pursuit of short-term goals that were once the means to reproduction. Both think that people are generally not willing to pay for the long-term good of society or the planet. To save the environment, therefore, we will have to find a way to reward individuals for good behavior and punish them for bad. Exhorting them to self sacrifice for the sake of "humanity" or "the earth" will not be enough.

This is utterly at odds with conventional wisdom. "Building an environmentally sustainable future depends on restructuring the global economy, major shifts in human reproductive behavior, and dramatic changes in values and lifestyles," wrote Lester Brown, of the Worldwatch Institute, in his State of the World for 1992, typifying the way environmentalists see economics. If people are shortsighted, an alien value system, not human nature, is to blame.

Consider the environmental summit at Rio de Janeiro last year. Behind its debates and agreements lay two entirely unexamined assumptions: that governments could deliver their peoples, and that the problem was getting people to see the global forest beyond their local trees. In other words, politicians and lobbyists assume that a combination of international treaties and better information can save the world. Many biologists and economists meanwhile assert that even a fully informed public, whose governments have agreed on all sorts of treaties, will still head blindly for the cliff of oblivion.

Three decades ago there was little dissonance between academic thinking and the environmentalists' faith in the collective good. Biologists frequently explained animal behavior in terms of the "good of the species," and some economists were happy to believe in the Great Society, prepared to pay according to its means for the sake of the general welfare of the less fortunate. But both disciplines have undergone radical reformations since then. Evolutionary biology has been transformed by the "selfish gene" notion, popularized by Richard Dawkins, of Oxford University, which essentially asserts that animals, including man, act altruistically only when it brings some benefit to copies of their own genes. This happens under two circumstances: when the altruist and the beneficiary are close relatives, such as bees in a hive, and when the altruist is in a position to have the favor returned at a later date. This new view holds that there simply are no cases of cooperation in the animal kingdom except these. It took root with an eye-opening book called Adaptation and Natural Selection (1966), by George Williams, a professor of biological sciences at the State University of New York at Stony Brook. Williams's message was that evolution pits individuals against each other far more than it pits species or groups against each other.

By coincidence (Williams says he was unaware of economic theory at the time), the year before had seen the publication of a book that was to have a similar impact on economics. Mancur Olson's Logic of Collective Action set out to challenge the notion that individuals would try to further their collective interest rather than their short-term individual interests. Since then economics has hewed ever more closely to the idea that societies are sums of their individuals, each acting in rational self interest, and policies that assume otherwise are doomed. This is why it is so hard to make a communist ideal work, or even to get the American electorate to vote for any of the sacrifices necessary to achieve deficit reduction.

And yet the environmental lobby posits a view of the human species in which individual self-interest is not the mainspring of human conduct. It proposes policies that assume that when properly informed of the long term collective consequences of their actions, people will accept the need for rules that impose restraint. One of the two philosophies must be wrong. Which?

We are going to argue that the environmental movement has set itself an unnecessary obstacle by largely ignoring the fact that human beings are motivated by self-interest rather than collective interests. But that does not mean that the collective interest is unobtainable: examples from biology and economics show that there are all sorts of ways to make the individual interest concordant with the collective—so long as we recognize the need to.

The environmentalists are otherwise in danger of making the same mistakes that Marxists made, but our point is not political. For some reason it is thought conservative to believe that human nature is inherently incapable of ignoring individual incentives for the greater good, and liberal to believe the opposite. But in practice liberals often believe just as strongly as conservatives in individual incentives that are not monetary. The threat of prison, or even corporate shame, can be incentives to polluters. The real divide comes between those who believe it is necessary to impose such incentives, and those who hope to persuade merely by force of argument.

Wherever environmentalism has succeeded, it has done so by changing individual incentives, not by exhortation, moral reprimand, or appeals to our better natures. If somebody wants to dump a toxic chemical or smuggle an endangered species, it is the thought of prison or a fine that deters him. If a state wants to avoid enforcing the federal Clean Air Act of 1990, it is the thought of eventually being "bumped up" to a more stringent nonattainment category of the act that haunts state officials. Given that this is the case, environmental policy should be a matter of seeking the most enforceable, least bureaucratic, cheapest, most effective incentives. Why should these always be sanctions? Why not some prizes, too? Nations, states, local jurisdictions, and even firms could contribute to financial rewards for the "greenest" of their fellow bodies.


THE new convergence of biology and economics has been helped by a common methodology—game theory. John Maynard Smith, a professor of biology at the University of Sussex, in Britain, was the first effectively to apply the economist's habit of playing a "game" with competing strategies to evolutionary enigmas, the only difference being that the economic games reward winners with money while evolutionary games reward winners with the chance to survive and breed. One game in particular has proved especially informative in both disciplines: the prisoner's dilemma.

A dramatized version of the game runs as follows: Two guilty accomplices are held in separate cells and interrogated by the police. Each is faced with a dilemma. If they both confess (or "defect"), they will both go to jail for three years. If they both stay silent (or "cooperate"), they will both go to jail for a year on a lesser charge that the police can prove. But if one confesses and the other does not, the defector will walk free on a plea bargain, while the cooperator, who stayed silent, will get a five-year sentence.

Assuming that they have not discussed the dilemma before they were arrested, can each trust his accomplice to stay silent? If not, he should defect and reduce his sentence from five to three years. But even if he can rely on his partner to cooperate, he is still better off if he defects, because that reduces his sentence from three years to none at all. So each will reason that the right thing to do is to defect, which results in three years for each of them. In the language of game theorists, individually rational strategies result in a collectively irrational outcome.

Biologists were interested in the prisoner's dilemma as a model for the evolution of cooperation. Under what conditions, they wanted to know, would it pay an animal to evolve a strategy based on cooperation rather than defection? They discovered that the bleak message of the prisoner's dilemma need not obtain if the game is only one in a long series—played by students, researchers, or computers, for points rather than years in jail. Under these circumstances the best strategy is to cooperate on the first trial and then do whatever the other guy did last time. This strategy became known as tit-for-tat. The threat of retaliation makes defection much less likely to pay. Robert Axelrod, a political scientist, and William Hamilton, a biologist, both at the University of Michigan, discovered by public tournament that there seems to be no strategy that beats tit-for tat. Tit-for-two-tats—that is, cooperate even if the other defects once, but not if he defects twice—comes close to beating it, but of hundreds of strategies that have been tried, none works better. Field biologists have been finding tit-for-tat at work throughout the animal kingdom ever since. A female vampire bat, for example, will regurgitate blood for another, unrelated, female bat that has failed to find a meal during the night—but not if the donee has refused to be similarly generous in the past.

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