Sunday, December 7, 2014

Psychopathy, economics and politics: joining the dots, and "Why Nations Fail"

The author recently read the brilliant book "Why Nations Fail", by Daron Acemoglu, and James A. Robinson. This book explains their theory about why some countries are rich and others are poor; and how historically, various countries became rich, became poor, have always been poor, and so on.

Using many historical and contemporary examples, they show how nation-states can be roughly divided into those that are "extractive" and those that are "inclusive". Essentially, an "extractive" society is one where a closed, ruling elite uses its population to "extract" wealth for its own benefit; an "inclusive" society is one where the population as a whole has easy access to institutions, an open legal system, and their human rights are secured. As you might imagine, "extractive" societies are always significantly poorer than "inclusive" ones, though the scale of "extraction" or "inclusion" depends on the specific circumstances of any one nation-state.

This explanation mirrors something I read years ago about why countries are poor: in a word, corruption. As economics (and politics) is about choices, countries are poor because the wealth and power of the country is concentrated in the hands of a closed elite. An elite could choose to invest in innovation and development, but this would come at a risk of creating other wealthy people, who would want to replace them, or at least ask for more say in how things are being run. If the institutions are corrupt, then this inevitably results in government becoming a closed shop. For this reason, nation-states run in this way would never develop economically beyond a certain level: corruption always holds these countries back. Africa is the poorest continent in the globe for this reason, but this form of "institutionalised" corruption has more-or-less existed in Africa for centuries, going back to before when the Portuguese explored the continent five hundred years ago. In the book "Why Nations Fail", it is also concisely explained why North and South America have such different standards of living: again, the question comes down to corruption and exploitation, of one form or another.

Joining the dots: towards a unified theory?

This got me thinking about some of the points I've made elsewhere about the effect human psychology has on economics and politics, and vice versa. This idea of "extractive" societies sounds similar in tone, at a collective level, to the premise that psychopaths are "leeches" on society at large.

Psychopaths make up roughly 1% of the human population, though with a sliding scale of "severity" of the personality disorder, "semi-psychopaths" may also comprise another few per cent. The glaring differential that marks them out from normal human beings is their lack of empathy (i.e. lack of understanding of human emotion, and how to respond appropriately to it). As described in the linked article earlier:

" ... there are people in human society who do not believe that taxes are "the price of civilisation", and do not believe that government should provide collective services. From a psychological point of view, these people appear to have a severe lack of empathy. "

So economic and political institutions may well also have cumulative effect on human psychology, in that a nation-state's institutions (or chronic lack of them) can erode a person's empathy towards society at large. It must also be said that, by definition,  a disproportionate number of people in corrupt elites around the world - from North Korea's Kim Jong-Un to the richest man in the world, Mexico's Carlos Slim - would also have an empathy deficit, in order to justify what they do. This also explains why the rich (i.e. in the West) complain about paying taxes for public services they do not use; these people display a lack of empathy towards society, and an anti-social attitude towards their responsibilities. More on this later.

In an article last year, I talked about how the historic "hunter-gatherer" society and its contemporary Capitalist equivalent may well generate an environment that is beneficial towards psychopaths. Intriguingly. the authors of "Why Nations Fail" talk about how the hunter-gatherer society's evolution to a sedentary, farming civilisation can likely have only come about through an act of leadership, bringing about an institutional change. In their book, they talk about the example of the Natufian civilisation around 9000BC in the modern-day Holy Land, which was the first known society to make the change from hunting to an agrarian society.
As has been mentioned in earlier posts, psychopaths are also humanity's natural leaders, so much so that Kevin Dutton, who wrote the book "The Wisdom Of Psychopaths", believes that not all of psychopath's psychological attributes are always bad - sometimes, they are even beneficial. In this way, it can be argued that if the authors of "Why Nations Fail" suggest that it was decisive (and therefore, autocratic) decision of a Natufian leader to bring about the "revolution" to a settled farming, it would have taken a great deal of fearlessness (and ruthless enforcement) to bring about this change. And what better person to do this than a psychopath?

Kevin Dutton talks about psychopaths, for all the damage they can wreak on society, as also acting as the "doers" in society, the ones that are fearless at taking risks. Assuming this to be true, it can be surmised that a disproportionately-large number of individuals responsible for humanity's various advances throughout history were psychopaths. If you look at today's entrepreneurs, it's not hard to recognise in a significant number of them the same attributes - the risk-taking, the fearlessness, the occasional amoral ruthlessness - that we recognise in psychopaths. In this sense, they are society's "winners". But this was not always the case.

Different system, different outcome

Different kinds of societies produce different kinds of social environments. The theory of "extractive" and "inclusive" nation-states links to some of the ideas mentioned in an earlier article: that psychopaths thrive in hunter-gatherer/ Capitalist societies, but struggle to advance in stratified and closed societies. This matches, (with some caveats, which I'll explain shortly) to the "inclusive" and "extractive" societies mentioned in "Why Nations Fail".

In the modern world, the most "inclusive" (i.e. egalitarian and open) nation-states can be found in places like Scandinavia: these are societies where inequality levels are very low and standards of living are very high; this is a result of their high-functioning and well-organised institutions. At the opposite end, the most "extractive" nation-states (i.e. the most corrupt, with the most dysfunctional institutions) can be found in the Third World. Nation-states like the USA and the UK are still very high in terms of institutional organisation, but have significantly higher levels of inequality compared to places like Scandinavia.

Modern laissez-faire Capitalism (i.e. the neo-liberal philosophy created by Ayn Rand) engenders a social attitude similar to that found in hunter-gatherer societies, and is probably the best environment for a psychopath to thrive in: this also coincides with the greatest advances in human history. However, endemic to this neo-liberal system is the creation, over time, of a cartel-like structure that has effective control over large segments of economic transactions. This is a natural result of the way "the market" works, when not protected by effective institutions. The creation of this cartel is a fundamental weakness in the system, and also a fundamental problem of what happens when psychopaths rule the roost: they are very good at getting to the top and staying there, doing whatever thy can to preserve their position in society. The creation of these cartels, or "economic elites" are what prevents Capitalist societies from becoming fully inclusive, and explains why psychopaths tend to thrive in them: because fully-inclusive societies are anathema to a psychopath's understanding and interests.

For a psychopath,  an "extractive" society of a closed elite creates a glass barrier he finds difficult to pass; conversely, a fully-inclusive society creates institutions and rights that prevent a psychopath from amorally securing his position at the top for perpetuity. He might get to the top for a while, but "the system" will quickly root out and cast down any amoral usurpers. In a Capitalist system, this is less likely to happen while also giving him more opportunities to amorally profit from others, and would thus be a psychopath's preferred social environment to advance in.

There are psychopaths in any society, "extractive" as well as "inclusive". When psychopaths rule the roost, the result is chaos, regardless of the social make-up of the system. The question is: how to make psychopaths "work", so that the system gets the best out of them, without breaking the system.

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