The Company of Strangers: A Natural History of Economic Life

  • Paul Seabright
Princeton University Press: 2004. 320 pp. $29.95, £19.95 0691118213 | ISBN: 0-691-11821-3
Credit: D. RIDLEY/IMAGES.COM/CORBIS

Edward O. Wilson's call for the unification of biology and the social sciences some three decades ago came in for some rough treatment, and the notion of ‘sociobiology’ is still opposed by some traditionalists. Yet, despite this hostility, the process of integrating social science into natural science seems 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 analysing the similarities and differences between human and non-human social systems. The title of Seabright's book, The Company of Strangers, isolates a unique characteristic of human sociality: although several species have evolved a highly complex and decentralized division of labour, humans are the only species with extensive cooperation among unrelated individuals.

The maturation of sociobiology since Wilson's call to arms has included several key strands of research. One is a broadened concept of sociality which recognizes that, from the emergence of multicellular organisms to the rise of Homo sapiens, major evolutionary transitions have required new mechanisms to bring about cooperation among the complex parts of biological entities. It is now routine, for instance, to note that the disciplining of an aberrant cell in an organism, an ovipositing worker in a beehive and a shirking worker in a business enterprise are done in a similar way. A second contribution is gene–culture coevolutionary theory, which treats culture as a form of informational transfer across generations, subject to much the same evolutionary forces as genes. This is important because human sociality has been far more cultural than that of any other species.

The Company of Strangers exemplifies a new breed of economic analysis, seeking answers to fundamental questions wherever they are found and ignoring disciplinary boundaries. A transdisciplinary approach to economic life is nothing new: Adam Smith, for instance, wrote not only The Wealth of Nations, but also The Moral Sentiments, perhaps the greatest work of psychology before William James. But this tradition was all but buried in the early years of the twentieth century, to be rediscovered only recently.

Seabright provides elementary, but nonetheless richly fascinating, introductions to such standard economic topics as the division of labour, prices, money and commodities. And he addresses such perennial economic problems as unemployment, poverty, environmental destruction and economic instability. The novelty is that he consistently does so from a long-term evolutionary perspective. This is decidedly not a book on economic policy. 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 book's innovation lies in its treatment of the psychological prerequisites of modern economic life. As Seabright notes in the introduction: “Modern 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.” This psychology has two elements. The better known part is what Seabright calls “rational calculation”, by which he means a capacity for logical reasoning, information processing and mastery of technique that far exceeds that of any other animal. Less well known in behavioural science is what Seabright calls “reciprocity”, which he defines as “the willingness to repay kindness with kindness and betrayal with revenge, even when this is not what rational calculation would recommend”.

It is important to be clear on two terminological issues from the outset. First, by “reciprocity” Seabright means what I and others have referred to in Nature as “strong reciprocity”. The “strong” adjective is meant to distinguish the behaviour 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” to mean “caring only about oneself”. There is nothing irrational about such elements of strong reciprocity as returning kindness with kindness and retaliating against someone who has harmed one, however, even when these behaviours involve net material costs.

Seabright's treatment of human society is innovative because biologists and economists alike have long maintained both that humans are selfish when dealing with non-kin, and that their cooperation can be explained by long-term self-interest. Moreover, there is a long tradition, especially on the political left, of criticizing capitalism for promoting greed and selfishness; this is at best a partial truth, as market economies at least tolerate, and probably promote, fair-minded behaviour. Experimental economics, as described here by Seabright, has shown that most people are indeed reciprocal, and that economic and biological models of self-interested cooperation are rarely plausible when they involve groups of more than a few individuals.

Seabright also analyses 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 humans, he adds, that it “cannot be described as exceptional, pathological, or disturbed”. 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.”

The Company of Strangers is highly readable and will be accessible to a wide audience. It is, however, weak on detail and eschews formal model building and extended analytical argumentation. As a result, it will serve only as a stepping-stone to the field for those interested in the economy as a dynamically evolving system.