Holidays offer the chance to enjoy reading, to catch up on events back home, and to ponder issues one never quite has time for back at work. Sometimes the varied readings share common themes, as was the case this year.
My holiday reading this year, a gift from a colleague, began with Adam Grant’s bestselling business book Give and Take. Grant champions the virtues, both intrinsic and (inadvertently) instrumental, of being a giver. A giver focuses on giving time, energy, and support to others, irrespective of the benefits one might hope to achieve. At the opposite end of the spectrum are takers, who focus on getting the most out of any relationship, and in the middle are matchers, those who give, but only for the purpose of getting something in return. Citing a range of research and relating compelling personal stories, Grant argues that not only do givers feel better about themselves through their giving, they also build positive, self-reinforcing networks that benefit them in ways that networks of takers and matchers cannot.
For a business book, Give and Take flies against the basic business instinct of getting the most out of transactions and relationships. (Isn’t that what business is all about?) For economists—at least for this one—it also feels somehow incongruent with the foundations of our training: Atomistic competition is a fundamental assumption of basic economic models, and cooperative behavior, as when firms in the same industry collude, is usually cast in a bad light.
Yet, Grant’s book is replete with examples of entrepreneurs helping other entrepreneurs, of venture capitalists making their trade secrets public, of coworkers supporting each other even as they vie for promotions, and other acts of giving. Whereas Adam Smith* laments that “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public”, Adam Grant’s exposition suggests a conspiracy for the common good. While not contradictory—industrial oligarchs colluding on prices is not the same as entrepreneurial startups sharing tips—the notion of pure giving as a successful business strategy does not sit comfortably with the economists’ instinct for the reality and the value, for both individuals and society, of self-interested atomistic behavior.
The same theme can be found in the second book on my holiday reading list, the new World Development Report 2015—Mind, Society, and Behavior (WDR). The flagship publication of the World Bank likewise puts typical assumptions about the way people behave up to scrutiny—and finds them lacking. Drawing on a growing body of experimental research from across the social sciences, the authors show that while economists typically assume self-interested behavior, in fact people are much more likely to act cooperatively, an insight with implications for development policy.
“Our social tendencies mean that we are not purely selfish and wealth maximizing actors, as many economic models and policies assume; rather, we value reciprocity and fairness, we are willing to cooperate in the attainment of shared goals, and we have a tendency to develop and adhere to common understandings and rules of behavior, whether or not they benefit us individually and collectively. Since what we do is often contingent on what others do, local social networks and the ideas, norms, and identities that propagate through them exert important influences on individual behavior.” (WDR)
Ultimately, the question of how people actually behave, as in the experimental research cited above, must be met with the question of how people should behave. This is the realm of philosophy. My holiday reading a couple years ago, a gift from my son, was Michael Sandel’s Justice, based on his famous Harvard course. With meticulous philosopher’s discipline, Sandel examines different ideas about how to determine, as the book’s subtitle suggests, what is the right thing to do? Rejecting individual liberty as a sufficient guiding principle, and likewise utilitarianism, the idea that one can somehow sum up the utility of all of society, Sandel argues in favor of what some call communitarianism, the recognition that all people are part of a larger community and the right thing to do must take into account the wants and desires of that community.
But how does one define “community”? Recognizing that a person’s behavior is influenced by his or her sense of community, the WDR argues, leads to important implications for development policy since programs can be more effective if the “community” is framed in certain ways. Similarly, Give and Take cites research showing that a narrow definition of community (your neighbors) drives behavior more than a broad definition (your fellow citizens). While this can be harnessed to advantage when trying to change behavior, the focus in people’s minds on a narrow concept of community can also be inefficient. Can broadening the concept of community help?
Which brings us to the Nashville Chief of Police. A series of tragic events in recent months in the United States has thrown light on a range of issues, from policing tactics, to race relations, to ideas of fundamental rights and human dignity. The Nashville Police Chief’s holiday message to staff emphasized the need sometimes to think beyond the technical legality of individual acts, and instead focus on the bigger picture. “Decisions need to be made with a view toward what is best for all of Nashville.” But the Police Chief, Steve Anderson, went much further than that. He appended to his holiday message a letter he sent to one citizen in response to a complaint about the permissive handling of peaceful demonstrations. In the letter, he urged a fundamental reexamination of what the “community” is and pushed that citizen to take a broader view:
“As imperfect humans, we have a tendency to limit our association with other persons to those persons who are most like us. Unfortunately, there is even more of a human tendency to stay within our comfort zone by further narrowing those associations to those persons who share our thoughts and opinions. By doing this we can avoid giving consideration to thoughts and ideas different than our own. This would make us uncomfortable. By considering only the thoughts and ideas we are in agreement with, we stay in our comfort zone. … It is only when we go outside that comfort zone, and subject ourselves to the discomfort of considering thoughts we don’t agree with, that we can make an informed judgment on any matter. … And, it is only by giving consideration to the thoughts of all persons, even those that disagree with us, that we can have an understanding as to what constitutes a majority.” (Steve Anderson)
Interestingly, this sentiment also finds an analogue in Grant’s Give and Take. Citing the research on the benefits of “dormant relationships”, those among professionals who have not had contact for some years, Grant argues that going outside the comfort zone of those we know well is the best strategy for gaining truly new ideas. Again, this leads us (and some of the people Grant profiles) to the conclusion that the concept of community should be broader than would be most people’s natural inclination.
These disparate pieces from academia, from business, from international development, and from local policing, then, have common themes. They suggest that, as a modeling assumption for guiding policy, and even as a tactic in business, purely self-interested behavior is inferior to the behavior of a giver; that development policy should recognize willingness of people to behave for the community’s good, rather than just their own; that policing should take community into context rather than focusing on individual infractions. They also push us to think more broadly in our definition of “community” than might otherwise be our instinct**.
* Smith’s philosophy is not as simple as one of self-interest (click here for a nice argument of the virtues of Adam Smith’s broader philosophy) and, indeed, Grant’s book quotes Smith for a more nuanced (and giving) depiction of human behavior. The WDR, likewise, emphasizes that “the new research, in some ways, brings the discipline of economics full circle to where it began, with Adam Smith in the late 18th century, and to perspectives that were prominent in the early and middle parts of the 20th century,” going on to cite Gunnar Myrdal, Herbet Simon, F.A. Hayek, and Albert Hirschman for more nuanced views of behavior. On the opposite side of the circle was the prevailing view of Paul Samuelson and Milton Friedman that “economists could safely ignore psychological factors in making predictions about market outcomes.” The WDR argues that it is the growing body of empirical evidence to the contrary accumulated over the past 30 years that is bringing a renewed emphasis in the economics discipline on mind, society, and behavior.
** The urging to go outside of one’s comfort zone, a theme of both Professor Grant’s business book and Police Chief Anderson’s letter to a citizen, resonated with me, a fact made clear by the present endeavor to reflect on matters of philosophy and business. And it is somehow appropriate that two of the books cited were gifts.