Humans as factors of production: an evolutionary analysis

This paper is an application of Darwinian analysis to the study of humans as inputs to the production process. Biologists believe that the only factor capable of explaining the extraordinary level of human intelligence is selection pressure from competition with other proto-humans. This selection pressure would have been from two sources. First, there would have been pressure within human groups to become more successful and leave more offspring. Second, there would have been selection pressure between groups, as through warfare and other forms of group competition. This second type of pressure would have provided evolutionary incentives for individuals to be able to cooperate in groups with others, which in turn depends on the ability to avoid cheating, or defection in a prisoner's dilemma setting. There would also have been feedback effects: increasing intelligence would have increased the value of cooperation, and increasing cooperation would have in turn increased the value of intelligence. This selection pressure can explain human abilities to form large extra-familial and extra-ethnic groups for productive activity. In other words, Becker's 'discrimination coefficients' are remarkably small for humans. We provide an evolutionary game theoretic model of cooperation. We argue that humans may be selected for flexibility across generations, so that more honest societies will induce parents to train children to avoid defection, thus leading to a further increase in the proportion of honest persons in the society. We conclude that had humans had different 'tastes' for cooperation, then firms might be radically different than they are. © 1998 John Wiley & Sons, Ltd.