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Rationality and Utility from the Standpoint of Evolutionary Biology

Author(s): Donald T. Campbell


Source: The Journal of Business, Vol. 59, No. 4, Part 2: The Behavioral Foundations of
Economic Theory (Oct., 1986), pp. S355-S364
Published by: The University of Chicago Press
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Donald T. Campbell
Lehigh University

Rationality and Utility from


the Standpoint of
Evolutionary Biology

A majormotive of these comments is to offer a perspective in which


the importantpaperon perceptionsof fairnessby Kahneman,Knetsch,
and Thaler (in this issue) is moved from being a description of an
exogenous factor "distorting"marketrationalityand becomes instead
an integral part of a theory of collective rationality. In anticipatory
summary,perceptionsof fairness (like moralnormsin general)are our
individuallyrationalpreferencesas to how others behave. If the collec-
tive-goods payoffs are sufficient so that the cooperative system is
worth maintainingand if that social system is intact, then it may be
individuallyrational to abide by those norms oneself as a rationally
paid cost in a strategy of getting others to live up to them.
This will be argued on grounds drawn from evolutionary biology
and, in particular,from the issues surrounding"altruism"that are so
focal to sociobiology. A growingnumberof economists are participat-
ing in a potential integrationof economics and evolutionary theory.
From participants in this conference this includes, at least, Simon
(1973, 1983), Becker (1976), Nelson and Winter (1982), and Lucas (in
this issue). Among our nonpresentcolleagues participatingare Hirsh-
leifer (1977, 1978) and Samuelson (1983). Because I believe this is a
trendthat shouldbe furtherdeveloped, I am going to prefacemy analy-
sis of the issues raised by Kahnemanet al.'s paper by an overview of
other aspects of the sociobiological perspective relevant to the total
agenda of this conference.
Shared in common by biology's "populationgenetics" (the mathe-
maticaltheory of the evolutionaryprocess) and econometricsare mod-
els in which populationsof individualdecision makersthat are optimiz-
ing utilities produce macro effects. The concepts of "decision
making," "utilities," "self-interest," and self-sacrificial "altruism"
are, of course, used in biology as a convenient metaphoricalshorthand
ratherthan as a literal descriptionof cognitive decision processes and

(Journal of Business, 1986, vol. 59, no. 4, pt. 2)


? 1986 by The University of Chicago. All rights reserved.
0021-9398/86/5904-0017$01 .50

S355

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S356 Journal of Business

subjectiveutilities. I, for one, condone and participatein this usage and


regardit as rarely misleading. I do not have space to argue this here,
other than to assert (1) that the selective processes operate in such
ways as to select for animals that act "as though" they had such
decision processes and utilities and (2) that-conceived of as a linguis-
tic shorthand-such invoking of "teleonomy" does not imply "tele-
ological causation," being consistent with a thoroughgoingphysicalism
(i.e., ontological priority of the inorganic). (For an able and highly
readabledefense of such usage, see Dawkins [1976].)
My disagreementwith Dawkins is not in the use of "selfish" but
ratherthat he confoundsthe unit of retention,the gene, with the unit of
selection, the whole organism(see Sober 1984).It is the unit of selec-
tion that, in this biological shorthand,will be "selfish" and that will
manifest "teleonomy" or "goals" or "purposiveness."
One could regardmacroeconomictheory as using "rationality"and
"interests" in a similarlymetaphoricway, justifiedby the fact that the
outcomes of the differentialsurvival of business firms or of ventures
within firms produced surviving dominant policies that could be so
described, without imputing these subjective mental goals and pro-
cesses to the individualdecision makersinvolved. Properlyelaborated,
this mightresolve the deep divisions in this conference volume. I have
neither the space nor the competence to develop this argumentbut
would begin with Aldrich(1979), Nelson and Winter(1982),and Kauf-
man (1985).

I. Self-InterestEquals InclusiveFitness
Rationalityin economic theory is primarilya rationalityof the means
whereby individuals (whether biological persons or firms) maximize
utilities. Especially where the behavior of persons is at issue, the con-
tent of the utilities is left open, unspecified by theory. While it is a
maximizationof "self-interest," the contents of self-interestare usu-
ally not specifiedby the theory. Mergingsuch self-interesttheory with
evolutionarybiology offers the promise of theoreticalgroundsfor pre-
dicting such contents, that is, predicting what sorts of interests the
products of biological evolution would be apt to have. The paper by
Lucas (in this issue) makes the equation between adaptationand op-
timizing, which I am assuming.
The answer of sociobiology, based on Hamilton's(1964/1971)crucial
papers and elaboratedby Wilson (1975), Alexander (1979), and many
others, is to derive all more specific interests from the ultimategoal of
inclusive fitness, maximizingthe frequency of one's genes in future
generations. Through the related concept of kin selection, Hamilton
and the others point out that this is furtherednot only throughone's
own offspringbut also, in diluted degree, by the progeny of relatives.
Thus nepotism becomes an aspect of self-interest.

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Rationality and Utility S357

While economic theory may formallyleave self-interestunspecified,


in practice an individualisticself-centerednessis often assumed. This
needs revising to include the interests of direct descendents and
nephews and nieces. Thus "altruistically"hoardingwealth to pass on
to children at the expense of one's own skin-surfacehedonism be-
comes rationalself-interestin the biologicalmodel. Whilemy attention
has been called (although I have lost the reference) to at least one
economic study failing to support such a motive in wealth accumula-
tion, I would counter with Baldus's (1973) massive assembly of evi-
dence that the aged poor will endure personal deprivationto leave
propertyto their heirs. I feel confident that the bulk of econometric
analysis will supportthis revision.

II. The Rationalityof Interestsin a ModularHierarchy


of Goals and Subgoals
The larger critique of human rationalityof which economic theory is
inevitablya part must containtheory about the rationalityof the goals,
interests, or utilitiesfor which we strive as well as aboutthe rationality
of decision makingin the service of these interests.
From the standpointof evolutionarybiology, our innate pleasures,
hungers, lusts, fears, and pains are subgoals, selected as mediating
inclusive fitness. Learningtakes place in the mediatingof such goals.
The message of cybernetics and purposivebehaviorism(Tolman1932;
Miller, Galanter,and Pribram1960)is that learningitself is a chaining
not of muscle contractionsbut ratherof "acts" organizedaroundthe
achievement of subgoals. It was this recognition that weaned Karl
Lashley (Lashley and McCarthy1926)from Watson's behaviorism.A
rat that learned a maze was still able to locomote it without entering
any blind alleys after a cerebellaroperationthat paralyzedits rearlegs:
it still knew the route and achieved the subgoals, the choice points, by
novel muscle movements. Similarly,much of the "instinctive" behav-
ior even of insects is organized around subgoals, as McDougall and
McDougall(1931) noted long ago in observing a mud wasp's repeated
repairof an experimentallybroken nest. Skinner's(1938)shift to oper-
ant behaviorcontains the same recognition:a rat that has acquiredthe
subgoal of getting the lever depressed will continue to do so with its
jaw if its front paws are tied (for elaboration,see Campbell[1963, pp.
135-48]).
The hierarchicalnesting of subgoals organizes behavior into what
Simon (1969, 1973)has called semidecomposablesubunitsin which the
linking nodes are goals, or subgoals. The "informational"require-
ments of practical rationality, emphasized in his paper in this issue,
depend in most instances on such subgoalsbeing left unrevised, being
insteadtreatedas dependableunits, the "rationality"of whose media-
tion is not continuallybeing reexamined.This "neglect" is in the ser-

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S358 Journal of Business

vice of an overall rational strategy for mastering complex environ-


ments in a cumulative way. (An importantagenda for Simon is to
integrateexplicitly these two lines of thought.Heuristics, too, involves
subgoals tentatively trusted.)
From this perspective on a pervasive hierarchy of "interests"
innate, learned, and organizedas subgoals that mediate more encom-
passinggoals-it becomes clear that the issue of rationalityof decision
makingcannot be separatedfrom that of the rationalityof "interests."

III. Evolutionary Reasons for Irrational Interests


Evolutionary theory-biology or cultural-does not automatically
producea "Panglossian"picture of perfect rationalityor adaptedness.
Indeed its theoretical resources can be assembled to understandand
predict systematic dysfunction,and it may well be this potentialitythat
might most modify economic theory were the merger to be carried
further.
Evolutionaryprocesses posit slow adaptationto stable environments
where large populationsof reproductiveunits are available.The "wis-
dom" of the products is wisdom about past worlds and loses any
"hypotheticallynormative"credibilityif we have reasonto believe the
organism(or organization)is now in an environmentsubstantiallydif-
ferent from the environmentthat shaped it (Campbell1965).
Even within the constant environmentof evolutionary,shaping, the
adaptive mechanisms are built up from initially crude exploitation of
convenient approximations,complicatedby subsequentapproximative
corrective devices, but, starting from ignorance and without revela-
tion, are never clairvoyantor fully informed.(In considerablepartthis
may correspond to the informationalrestraints stressed by Simon.)
The result is that irrationalitiesmay persist for some tasks even within
the original environment of evolutionary shaping if the mechanism
(subgoals, etc.) is adaptive for the greaterbulk of its uses.
Tversky and Kahneman's paper (in this issue) provides a possible
illustrationof this last point. The Muller-Lyerillusion is probablybest
explainedas a by-productof generallyadaptivevisual inferencehabits,
innate and acquired, centered around gaining valid third-dimensional
informationfrom two-dimensionalline or edge displays (Segall, Camp-
bell, and Herskovitz 1966;Deregowski 1980).While at least some ani-
mals and probablyall humansare subjectto the illusionto some degree
(enoughto requirethe arrow-tippedline to be perhaps4%longer than
the feathered one), those of us who live in "carpentered worlds"
aboundingin rectangularsolids have the "illusion" to a strongerde-
gree (perhaps20%)and at the same time are more adept at decoding
third-dimensionalinformationfrom two-dimensionaldrawings:overall
the processes atypically sampledin the illusion drawingare adaptive.

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Rationality and Utility S359

Movingto the "irrational"response to equivalentwagers differently


framed that are central to Tversky and Kahneman's (in this issue)
work, one probably has to emphasize the shift-in-ecologyargument:
humanbrainsformedin one ecology of problemsare now being used in
quite another. Without claiming competence in the large literatureof
alternativeinterpretationsthat their exciting work has generated(e.g.,
Cohen 1981, and critiques; Stich 1985), let me offer an illustrative
possibility. In the formativeecology of perceptualand brainprocesses
adaptationwas achieved by modularlyseparatefocal attention to de-
sired objects on the one hand and to feared objects (aversive "goals")
on the other, with cognitive neglect (andnonenumeration)of irrelevant
objects. A brain thus shaped is ill adapted, in ways that Tversky and
Kahnemanspecify, to two-valuedlogics or to an exhaustive-set, three-
valued logic.
A special class of Simon's informationaleconomy mechanismis the
maladaptive hypertrophy of once usefully approximateproxy vari-
ables. Thus, in the biological theory of female choice in mate selection
(to use an outmoded example), size of antlers may have once been a
useful proxy variable for overall male capacity to contribute to the
inclusive fitness of joint offspring. But once it becomes an innate fe-
male preference determiner,it may lead to maladaptiveexaggeration.
Similarly,in culturalevolution crude but useful proxies for leadership
competence may be exaggeratedinto economically wasteful customs
(see Boyd and Richerson 1985, chs. 6, 9).
Haldane (1932), in his greater unificationof naturalselection with
Mendeliangenetics, pointed out anotherbiologicalevolutionarysource
of nonoptimalityfor social animals in which there is genetic competi-
tion for individualinclusive fitness amongthe cooperators.He founded
the discussion of (self-sacrificial)"altruism"in evolutionarytheory, an
analysis that has its parallelsin the economist's problemsof free riders
and collective goods (e.g., Olson 1968).This source of collective irra-
tionality is the subject of my two final comments.

IV. Evolutionary Theory and Collective Goods


Human beings, like all fertile animals, are in direct competitionwith
their kin (except their identical twins) and neighborsfor the food and
shelter available in their environment. This ubiquitous condition
creates an obvious interest in controllinghow other individualsbehave
and is best elaborated in David Wilson's (1980) interferencetheory.
This produces a minimalform of the conflict of interests between the
group as a whole and each individualas to how that individualshould
behave, thus getting into the problem of social control.
More significantis the fact that in a wide rangeof ecologies, such as
in big-animalhuntingand irrigatedgrain fields, cooperationincreased

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S360 Journal of Business

food resources and shelter from predators. But individualsare once


again in competition for the size of their shares of these increased
resources. At this level, however, a novel form of collective interest
emerges: individualcompetition for maximumshare of the resources
jeopardizes the benefits of cooperation and the cooperative organiza-
tion itself. Greedy quarrelingfor maximumshare reduces the pool of
resources to be shared. In ecologies where cooperationcan double or
quadruplethe per-capitaresources available,there is a payofffor effec-
tive social control that protects the efficacy of cooperationfrom indi-
vidual greed. That such mechanismsare rare and fragileis the conclu-
sion of analyses coming from both the mathematical models of
evolutionarybiology (Haldane1932;Williams1966;Wilson 1975,ch. 5;
Boormanand Levitt 1980;Wilson 1980)and economics (von Neumann
and Morgenstern1944;Hardin 1968;Olson 1968;Schelling 1971).
My own disagreementwith the collective-goods economists is only
one of emphasis. Their analyses, currently, seem to me to underesti-
mate grossly the relative magnitudeof collective goods to individual
goods, particularlyas projected into a future of exhausted naturalre-
sources. Their focus is thus predominantlyone of liberatingindividual
choice behavior from the restraintsplaced on ruthless individualop-
timizingby traditionalmoralityand governmentaledict, whereas I see
effective restrainton intelligentindividualcovetousness as essential to
the securing of collective goods of overwhelmingimportance.This is
not a difference in theory but rather a difference in the estimates of
parametersin a shared model.
It may help to minimize these differences if I present the
covetousness-restrainingmoral norms as fundamentallymotivatedby
a "selfish" (i.e., inclusive fitness) interestin how the other cooperators
behave. The example of the social insects helps dramatizethis (Camp-
bell 1983). The predominantsterility of the cooperatorsis essential to
this elaborate cooperative division of labor. It eliminates "genetic
competition among the cooperators" and thus the motivationto be a
free rider.;But this sterility needs continual enforcementto be main-
tained. A female ant's first-choicestrategy (facultativepolymorphism)
is to be the fertile queen. This failing, the sterile worker's second-
choice- strategy in implementingher inclusive fitness via nieces and
nephews (followingthe argumentfor kin selection) is to keep herfellow
workers (and soldiers, etc.) sterile. The cooperative nest system is so
productivethat this is in the net advantageouseven if, in the process,
her own sterilityis also ensured. Thus the workersdistributeto fellow
workers, soldiers, and infantsfertility-inhibitingpheromonesproduced
by the queen, at the expense of their own fertility (Seeley 1985).
To abbreviate a much longer argument(Campbell 1982, 1983) for
humancomplex social coordinationthat is achieved in spite of (rather
than througheliminating)genetic competitionamong the cooperators,

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Rationality and Utility S361

moral norms curbing ruthless intelligent individual optimization are


rationalselfish individualpreferences as to how others behave. If the
social organizationis intact and if the collective goods are substantial,
it is also rationalto conformto such norms oneself if that is necessary
for maintaininggroup membership.We probablyhave an innate am-
bivalence (facultativepolymorphism)on this score: an availablereper-
toire of cooperative group solidarity and another one of individual
optimizationat the expense of the group.
Trivers (1971)and Axelrod (1984)describe the requirementsfor the
minimallysocial verion of such cooperative systems: pair-wise recip-
rocal altruism. (Trivers's article has never been fully reprinted,and I
recommendit be read in the original.)The requirementsinclude pro-
longed interactionwith the same others, individualidentifiability,good
memory, and small populationsof interactors.Accompanyingthe ca-
pacity for reciprocal altruism is the capacity for "moralistic aggres-
sion," inflictingvengeance on those who welch on their agreements.
Somehow this reciprocal altruism gets expanded into clique
selfishness, primary-groupsolidarity,fear of ostracism, and the like.
For larger social units the precariousestablishmentof cooperative
social units has been accompaniedby fantastic transcendentalbelief
systems, with rewardingand punishing reincarnationsand afterlives
promisingindividualsa net hedonic gain optimizedover a longerperiod
than their own immediatelives. Considerthe greatgain in productivity
of early irrigationcivilizations, coming from a social orderthat builds
and repairsirrigationcanals and clearly worth maintainingfrom a col-
lective rationalityof collective inclusive-fitness optimizing. Contrast
this rationalitywith the heroic waste (economically and biologically)
accompanyingthe royal funerals in most (perhapsall) such early ag-
riculturalsocieties. Such waste is explicable only as a means to a still
greatergain. My explanation(not fully convincingeven to me; but see
Campbell[1975])is that this ritualtestimony to the ruler's belief in an
afterlifesupportedsuch beliefs amongthe citizens and was fundamen-
tal in protectingthe productionof collective goods againstthe erosion
of individuallyoptimizingfree riding.Boyd and Richerson(1985,ch. 7)
provide a model of cultural evolution that might make this possible.
May I note in passing my belief that, where in the past either market
mechanismsor legal restraintshave worked well, it is because of the
helpfulresidue of such awed indoctrinationinto moralrestraint(Camp-
bell 1982).If indeed the process Weber describedas die Entzauberung
der Welt (loss of the enchanted worldview) still proceeds apace, we
must look to alternativemeans to protect collective goods.
While space limitationsprovide an excuse for not trying to fill the
gaps rightnow, I would hope that eventuallyKahnemanet al.'s dataon
perceptionsof fairness and on marketresponses of complianceto such
perceptions could become a part of this perspective on collective ra-
tionality.

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S362 Journal of Business

V. Nonoptimalitiesand Irrationalitiesdue to Face-to-Face


Group Solidarity
Economic and organizationtheory (e.g., March and Simon 1958)has
noted dysfunctions from the point of view of the firm arising from
managers' mixed agendas where optimizing their own interests con-
flicts with optimizingthe firm's. In economics, "principalagent the-
ory" (Jensenand Meckling 1976)is one articulationof this. The evolu-
tionary perspective supports such emphases and adds to their
understandingwhere nepotistic expressions of self-interest are in-
volved.
Ourbiological heritageprovides anotherequally powerfulsource of
distortion for the optimization of the interests of the firm or of any
other large organization. This is our capacity for face-to-face group
solidarity. We are all responsive to signs of approvaland disapproval
comingfrom those whom we see face-to-faceon a regularbasis. We all
have a dreadof ostracismat some underlyinglevel, if not consciously.
The communicationsof approvaland disapprovalmay be largely non-
verbal and unconscious on the part of both sender and receiver. There
results (in brief, see Campbell [1982, 1983] for some more extended
argument)a tendency for every face-to-face aggregationin the organi-
zation to become an "in-group,"with both those in other buildingsat
higher,equal-status,or lower echelons andthose transientothers, such
as customers, becoming "out-groups."The clique interests of the pri-
mary groups lead to solidarity in furtheringthe comfort of in-group
members, often at the expense of the interests of the largergroup of
which the face-to-face groups are a part (for an interestingexample
from Dengist China, see Walder [1985]).
Here is an area that, if developed, would provide, I believe, a great
gain in our understandingof how individualand face-to-face group
interests, rationally expressed, become a source of nonoptimalityat
the level of larger social units.

VI. Summary
As several economists have noted, there are numerousparallelsfavor-
ing an integral relation between economic theory and evolutionary
biology. Evolutionarytheory also leads to predictions of the utilities
that an organism is likely to maximize and, in the concepts of kin
selection and inclusive fitness, expands self-interestto include nepo-
tism. But for reasons of pragmaticeconomy evolutionaryadaptations
are never complete for the ecology adaptedto and can be maladaptive
in novel ecologies.
Evolutionaryanalyses of social insect and humancomplex division
of labor systems point out the rationalityof wanting to restrain the

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Rationality and Utility S363

individualoptimizationof other cooperatorswhere this threatenscol-


lective goods. If the collective goods are substantial and the social
system intact, it becomes individuallyrationalto conform to such in-
hibiting norms oneself. Face-to-face group solidarity can produce
nonoptimalitiesfor social organizationsmadeup of severalface-to-face
groups.

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