Joseph Stiglitz. The Price of Inequality. Cultural Evolution. The Evolution Institute

I am about two-thirds of my way through the latest book by Joseph Stiglitz, The Price of Inequality. Stiglitz is a recipient of the Nobel prize in Economics and a former chief economist of the World Bank. But he is not a traditional economist.

First, unlike most academic economists Stiglitz is sympathetic to Leftist ideas. Actually, he is way out on the Left end of the political spectrum. In the beginning of the book Stiglitz talks approvingly of the Occupy movement and Los Indignados. Later there are favorable mentions of such left-wing South American leaders as Inácio Lula and Hugo Chávez, who came to power in some of the most economically unequal countries and managed to reduce the inequality. And Stiglitz inveighs against the ‘Right’ on numerous occasions throughout the book.

This is unusual for an economist, especially such an accomplished one who is (or, at least, has been) part of the ruling elite. Most economists know very well which side of their bread is buttered. It is curious how economic theories that yield answers pleasing to the powerful and wealthy tend to be part of the mainstream, while those yielding uncomfortable answers are relegated to the fringe…

The second way in which Stiglitz differs from traditional economists is related to the first – his willingness to engage with ideas from evolutionary science, which often go against the old-fashioned economic dogma. Today this is not as unusual as it was two or three decades ago. We now have the Santa Fe Institute, the Institute for New Economic Thinking in Oxford headed by Eric Beinhocker (the author of The Origin of Wealth), and our own Evolution Institute (the parent organization for the SEF), whose president David Wilson has led several initiatives in evonomics.

So Joseph Stiglitz is not a pioneer in this field, but his book engages with a number of central themes in it and in socio-cultural evolution (there is no sharp boundary between evonomics and socio-cultural evolution).

While Stiglitz is known as the advocate for government policy theory as the main explanation for the recent growth of economic inequality in America, his book presents a more nuanced message. Government policy remains a central theme, but in addition Stiglitz pays a lot of attention to economic and power issues (he uses the not very helpful economic jargon, ‘rent-seeking’ when referring to power differentials). He also devotes a lot of thought to issues that are of central interest to social evolution: norms and institutions, cooperation and social cohesion.

For example, on p. 65 he says, “Inequality may be at once cause and consequence of a breakdown in social cohesion over the past four decades.” And later: “The more divided a society becomes in terms of wealth, the more reluctant the wealthy are to spend money on common needs” (p. 93) – because they can simply purchase such things as security, clean environment, etc. I would add that the poor are also less likely to cooperate with the wealthy in highly unequal societies. Which is how inequality contributes to the breakdown of the fragile cooperative equilibrium.

It is interesting to note that when the wealthy ‘defect,’ they actually not only make the  overall situation worse, but it is actually a suboptimal outcome for them, too. At least that is the message of The Spirit Level: Why More Equal Societies Almost Always Do Better by Richard Wilkinson and Kate Pickett. Among other things, Wilkinson and Pickett make a striking observation that the expectation of life among the wealthier segment of Americans is less than the median for many European societies that are much more egalitarian – and spend much less per capita on health.

One thing, though, is that Stiglitz tends to treat ‘the wealthy’ as a monolithic class that acts for its own benefit in a Marxian fashion (“class for itself”). Yet the ‘1%’ consists of quite heterogeneous groupings. Most importantly for the issue at hand, economic inequality, there is a small minority among the very rich – to give a recent example, the Patriotic Millionaires – who have been very worried about the present trends towards greater inequality and are advocating increased taxes on top incomes, among other measures.

Since I started talking about shortcomings of this, in most ways excellent, book, let me mention another. Stiglitz is apparently unaware of the great progress that cultural evolution and cultural multilevel selection theory made in the last decade or so. In at least one place he cites Richard Dawkins, but so far I have not seen any mentions of David Wilson, Pete Richerson, Rob Boyd, Sam Bowles and other luminaries of our field. I point this out not to criticize Stiglitz; rather it is we who failed to get our message out as effectively as Dawkins or Steven Pinker do.

I had a similar experience in the conference the Evolution Institute organized last December in Stanford on Nation-Building and Failed States. One of the participants was Francis Fukuyama, who had recently published a book, The Origins of Political Order, in which he was clearly interested in engaging with evolutionary thinking. Yet he had to resort to appeals to the two tired (and badly wrong) models of human sociality – reciprocal altruism and kin selection. I had a long conversation with him at the conference, and so did David – it will be interesting to see whether we were able to make our case effectively.

This brings me to the last issue – so what is to be done? This question can be asked at two different levels: (1) how can the current trend to greater inequality be reversed, and (2) how can the Evolution Institute help in bringing this trend reversal about?

Stiglitz argues for a change in government policy, but clearly it must be preceded by the change in the collective mood and the social attitudes held by Americans, both the elites and the common people. Right now Ayn Randism has a much greater sway than evolutionary thinking. As Stiglitz puts it, “the Right underestimates the need for public (collective) action,” counting on the ‘invisible hand’ of pure, untrammeled markets to bring about the desired outcomes. Such an ideology that celebrates individualism and dismisses cooperation/collective action may serve the American elites in the short term, but it actually hurts everybody, poor and rich alike, in the long term.

I don’t have any ready answers to the questions I raised above. We’ll see if Stiglitz does in the last third of his book. But these are precisely the issues that the Evolution Institute – whose mission is to use evolutionary science to solve such problems as reversing the growth of inequality – should be engaged with.