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The Games of Evolutionary Economics

The article looked innocent. Who'd expect much fuss from a discussion of how evolutionary biology and economics come together in game theory? But what authors Matt Ridley and Bobbi Low have written seems certain to cause trouble. For example, by the end of their article, they asserted that both the Pope and Vice President Gore propound erroneous views, and that the new Greens have an essential similarity to the old Reds.

Wow!

Their article appears in the September issue of The Atlantic, a generally staid monthly that has nevertheless been willing to indulge controversy ever since 1857, when it published arguments for abolishing slavery. This debate is hardly in that league, but it is entertaining.

The authors start from the premise that environmentalism is in trouble. Though green-thinking leaders argue that good environmental practices are compatible with good economic growth, experience so far doesn't bear that out. Why would we need laws to control polluters or poachers if polluting and poaching weren't profitable? The environmentalists who acknowledge that problem generally take the high ground, arguing that people must take up good behavior for the good of the planet. They preach the virtues of selflessness, sacrifice, and shame.

Taking the high ground, say Ridley and Low, won't work. A prime concern with individual self-interest is not only human nature, it's pervasive through all nature. Assuming that good people naturally want to pursue the good of the collective whole is unnatural (and the authors say, this is where Greens meet Reds, in the idealistic assumption that societies are something other than the sums of their individual members). We may know that every drive into town adds a little more carbon dioxide to the global oversupply, but it's so convenient to take the car instead of waiting for the bus. Our gain is great, and we reason, the cost to the world for each trip is small.

The authors believe that the natural primacy of selfishness can be harnessed to produce just the sort of cooperation and unselfish behavior the environmental movement needs. They cite studies of game-playing to prove their point. Economic games reward winners with money, while biological ones grant winners the chance to survive and reproduce. To check strategy, theorists need offer only points.

Imagine a game with three possible moves. If you and your opponent both make move A, you each get three points. If you both make move B, you each get one point. But if he makes A and you make B, then he gets no points and you get five.

Now, if you play only one round, each of you will reason that making move B is the logical choice; in effect, trying to do in the other guy is your best bet. But if the game proceeds for several rounds, the best strategy is to cooperate on the first round and then do whatever the other player did the last time on the next round. In both economics and biology, this is known as tit-for-tat, and it's the most effective pattern for surviving, or profiting. Mafia dons understand and honor the idea of returning a favor, and so do vampire bats. Successful vampires regurgitate blood to share with unsuccessful ones, but only if the recipients also share when they've had good hunting.

For bats, baboons, or barons, cooperating is the most intelligently selfish thing you can do when cheating has swift and obvious costs. From this, Ridley and Low conclude that environmentalism needs healthy cynicism about human motivation. Provide some adequate incentive for cooperating in the work of saving the world, and people will cooperate to save it. Tit-for-tat on a grand scale could mean taxing gas-guzzling cars or boycotting tropical forest wood products. It could mean government preference in selecting contractors that use recycled materials or low-pollution vehicles. It certainly would mean accepting some very natural aspects of human nature.