The evolution of social and moral behavior: Evolutionary insights for public policy

This paper explores the evolution of humans as social beings and the implications of this for economic theory and policy. A major flaw in Walrasian economics is the assumption of "self-regarding" agents--economic actors make decisions independently of social context and without regard to the behavior of other consumers and firms. Truly other-regarding behavior, such as altruism and altruistic punishment, cannot be fully captured in the standard economic model. Standard economic assumptions about human behavior make pure altruism an irrational "anomaly" that cannot survive the evolutionary selection process. However, recent findings from neuroscience, behavioral economics evolutionary game theory and animal behavior have paved the way for a realistic, science-based, and policy-relevant foundation for economic theory. Other-regarding emotions such as altruism, love, and envy are an essential part of the human experience. We use the Price equation, showing the feasibility of the evolution of group selection of altruistic preferences, to explore some of the implications of this phenomenon for economic theory and policy. We explore evidence that the human capacity for empathy evolved from primates and suggest that this was the precursor for human morality. We suggest that if we drop the assumption that fitness is equated with the consumption of market goods, pure altruism is no longer fitness reducing, particularly in western societies. We also examine individual preferences for altruism in terms of their effect on well being.