Socialized View of Man vs. Rational Choice Theory: What Does Smith’s Sympathy Have to Say?

JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION

ELIAS L. KHALIL

Abstract: To explain the anomaly of cooperation in finitely repeated games, some economists advance a socialized view of man as an antidote to rational choice theory. This paper confronts these economists insofar as they trace the socialized view to Smith’s theory of sympathy in The Theory of Moral Sentiments (TMS). TMS rather advances a view that anticipates rational choice theory. These economists misinterpret TMS because they fail to realize that Smith’s sympathy actually involves two functions of sympathy: one that determines the optimal decision and another that determines the command of that decision. The dual function of sympathy parallels the two senses of rational choice: rationality as making the optimal decision and rationality as commanding that decision. Thus Smith’s sympathy does not support the socialized view of man.

As an Economy Becomes More Developed, Do People Become Less Altruistic?

PAPAR KANANURAK & AEGGARCHAT SIRISANKANAN

THE JOURNAL OF DEVELOPMENT STUDIES

Abstract: Inter-household private transfers are one of the main informal insurance mechanisms that prevalently implemented in developing countries. Unfortunately, most of the literatures investigates the private transfer motives at static perspectives. Therefore, this paper took advantage to investigate the private transfers motives in Thailand over the past three decades in order to examine any changing patterns of transfer motives. The empirical results from econometric methods indicated that as the economy in Thailand continues to develop, altruism remains dominant for private inter-household motives in Thailand and persists over time, not only in rural but also urban areas of the country.

Geography, Transparency, and Institutions

JORAM MAYSHAR, OMER MOAV, and ZVIKA NEEMAN

AMERICAN POLITICAL SCIENCE REVIEW, Volume 111, Issue 3

Abstract: We propose a theory in which geographic attributes explain cross-regional institutional differences in (1) the scale of the state, (2) the distribution of power within state hierarchy, and (3) property rights to land. In this theory, geography and technology affect the transparency of farming, and transparency, in turn, affects the elite’s ability to appropriate revenue from the farming sector, thus affecting institutions. We apply the theory to explain differences between the institutions of ancient Egypt, southern Mesopotamia, and northern Mesopotamia, and also discuss its relevance to modern phenomena.

Individualistic values, institutional trust, and interventionist attitudes

HANS PITLIK and MARTIN RODE

JOURNAL OF INSTITUTIONAL ECONOMICS, Volume 13, Issue 3

Abstract: A popular explanation for economic development is that ‘individualistic values’ provide a mind-set that is favorable to the creation of growth-promoting institutions. The present paper investigates the relationship between individualistic values and personal attitudes toward government intervention. We consider two key components of an individualistic culture to be particularly relevant for attitude formation: self-direction (‘social’ individualism) and self-determination (‘economic’ individualism). Results indicate that both are negatively associated with interventionist attitudes. Effects of self-direction are much weaker though, than self-determination. Moreover, the effects of self-direction are mitigated through higher trust in the state and lower confidence in companies, while that is not the case for self-determination values. We conclude that especially economic individualism supports attitudes conducive to the formation of formal market-friendly institutions.

Democracy and Unfreedom: Revisiting Tocqueville and Beaumont in America

SARA M. BENSON

SAGE JOURNALS, Volume 45, Issue 4

Abstract: This essay reexamines the famous 1831 prison tours of Alexis de Tocqueville and Gustave de Beaumont. It reads the three texts that emerged from their collective research practice as a trilogy, one conventionally read in different disciplinary homes (Democracy in America in political science, On the Penitentiary in criminology, and Marie, Or Slavery: A Novel of Jacksonian America in literature). I argue that in marginalizing the trilogy’s important critique of slavery and punishment, scholars have overemphasized the centrality of free institutions and ignored the unfree institutions that also anchor American political life. The article urges scholars in political theory and political science to attend to this formative moment in mass incarceration and carceral democracy.

Economic policy of a free society

PETER BOETTKE

THE REVIEW OF AUSTRIAN ECONOMICS

Abstract: Liberalism correctly understood is little more than the persistent and consistent applications of the principles of economics of the affairs of men be they domestic or international. These include mutually beneficial exchange, the absence of political privilege, and toleration. The institutional precondition of these principles is the rule of law, private property, and freedom of contract. Since the collapse of communism, however, the gains in human progress that have followed from economic and political liberalization are being increasingly questioned and critiqued. To counter these criticisms of liberalism, I contend, requires tireless and varied iterations of the basic principles. In order to prevent the invisible hand of the market process from being captured by the visible hand of political privilege, political economists must stress how the creative powers of a free civilization erode poverty, inequality, and monopoly privilege through the spontaneous order of market process.

Are individualistic societies less equal? Evidence from the parasite stress theory of values

BORIS NIKOLAEV

JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION, Volume 138

Abstract: It is widely believed that individualistic societies, which emphasize personal freedom, award social status for accomplishment, and favor minimal government intervention, are more prone to higher levels of income inequality compared to more collectivist societies, which value conformity, loyalty, and tradition and favor more interventionist policies. The results in this paper, however, challenge this conventional view. Drawing on a rich literature in biology and evolutionary psychology, we test the provocative Parasite Stress Theory of Values, which suggests a possible link between the historical prevalence of infectious diseases, the cultural dimension of individualism–collectivism and differences in income inequality across countries. Specifically, in a two-stage least squares analysis, we use the historical prevalence of infectious diseases as an instrument for individualistic values, which, in the next stage, predict the level of income inequality, measured by the net GINI coefficient from the Standardized World Income Inequality Database (SWIID). Our findings suggest that societies with more individualistic values have significantly lower net income inequality. The results are robust even after controlling for a number of confounding factors such as economic development, legal origins, religion, human capital, other cultural values, economic institutions, and geographical controls.