How cooperation evolves

Fair Market Values


Is the concept of fairness innate, or is it something that people learn? A new study of 15 small-scale societies around the globe, conducted by a team of researchers led by University of British Columbia anthropologist Joe Henrich, suggests that fairness is learned.

Using a series of economic games among strangers in which a pot of money (or an equivalent) was to be divided between two players, the researchers found that the more integrated a society was into markets, the more equally the shares were divided between the players. The researchers also found that individuals from societies that were more integrated into markets were more likely to punish unfair behavior if they witnessed it. The resulting study, titled "Markets, Religion, Community Size, and the Evolution of Fairness and Punishment," was published in the March issue of Science. It joins a series of anthropological studies that suggest fair treatment of strangers is a socially evolved behavior.

As the George Mason University economist Peter Boettke has noted, these findings bear a strong resemblance to an argument associated with the libertarian economist and philosopher F.A. Hayek, especially in his last book, The Fatal Conceit: The Errors of Socialism. Successful societies, Hayek suggests, are those that adopt market norms; they tend over time to out-compete societies organized in top-down ways. This idea derives from Hayek's concept of katallaxy, which he defined as "the order brought about by the mutual adjustment of many individual economies in a market." The term's Greek root words suggest that exchange transforms a stranger into a friend.