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Springtime for Freeloaders

The big problem for all social animals is freeloading. In any social group, in which individuals cooperate and by their acts benefit not just themselves but others as well, there is always a temptation for an individual to take without contributing. This problem arises out of the very nature of the individual and a social group. The contribution that an individual makes is focused and costly to him or to her. But the benefit of each contribution are often spread widely and can be enjoyed by all, even by those that don't contribute much of value to the group.

For instance, every human benefits from the electronics revolution, even though very few people even understand how quantum mechanics, the foundation of solid-state electronics, works. Employment in electronics is merely a part of the 0.75 percent of the labor force working in “metalworking, computers, instruments, drugs, chemicals and plastics, consumer electronics, and electrical machinery”. Meanwhile 11 percent work in retail and 2 percent in housing construction.ⁱⁱ The benefit that, say, construction workers and salespeople obtain from cellphones is all out of proportion to the cost they or their employers must expend to obtain cellphones and cellphone service.

In Pallipuram, at the southern tip of India, sardine fishermen used to sail into port to sell their fish at whatever the buyers offered. Now they use cellphones to communicate with wholesale buyers at several ports up and down the coast. That way they can sell their catches at the best price.ⁱⁱⁱ How much of the economic benefit they obtain is returned to the inventors and the developers of wireless telephony? Almost none.

In fact, the free-rider problem for innovation is solved by the capitalist system of social cooperation. Inventors are entitled to licensing fees for a limited time, and early market entrants obtain an economic return when the market prices their limited-liability corporations way above the cost of bringing all the factors of production together. This is the source of the wealth of Bill Gates in software, Steve Jobs in high-concept electronics, as well as the “robber barons” of the 19th century: Rockefeller and Carnegie.

Other forms of free-riding are not so innocent. After all, the cognitive abilities of humans are not merely instruments of social cooperation. They can be directed at social cooperation, or to purely selfish ends, or even worse. Cognitive intelligence can be directed towards stealing the work of others, and the preeminent cognitive achievement of humans, language, is “a perfect instrument with which to deceive, prevaricate and manipulate.^iv

In the society of the great apes, the freeloading problem is solved by the dictatorship of the alpha males. But ancient human society that evolved from the great apes into hunter-gatherer groups was egalitarian. Hunter gatherers hated anyone lording it over them. But without a strong leader enforcing group justice the hunter gatherers had to find another way to deal with the free-rider problem. Their answer seems to have been: religion. Instead of a real life alpha male forcing the freeloaders up to the mark, they discovered that the gods were willing to do this job, thus avoiding the need for overbearing alpha males. And, as a special bonus, even if the gods didn't get around to punishing evildoers in this life, they would punish them in the next one. Religion “implanted in peoples’ minds a stern overseer of their actions” in place of an earthly overseer. If everyone believes and fears the penalties of a divine overseer then they can live as equals without the “dictatorship of the alpha male.”^v

Modern society must also deal with freeloaders; the question is how? Modern society is no longer egalitarian, like the hunter gatherers; nor is it a “dictatorship of the alpha males,” although there are many thug dictators in the world who would like to try. In our society we seemed to have developed a different approach, not by design, but by the result of human action. It is a system that spontaneously coordinates the selfish actions of individuals into socially coordinated common benefits.

This system did not, unfortunately, arise out of the egalitarian ethos of the hunter gatherers. The invention of agriculture created an opening for a return of the alpha male, and religion became a power tool in the hands of political power. Agriculture requires a division of labor into producers and protectors, for the basic fact of agriculture is that food enough must be harvested and stored to last from one harvest through the subsequent growing season to the next harvest. All through that period, the product of the farmer is vulnerable to theft, by individuals or by armed bands of brigands, and thus the farmer must submit and pay for the services of an armed warrior class that can defend them against the robbers. Only with the development of modern innovation could the rule of the landed warrior class be thrown off. Now wealth came from the innovation and creativity of ordinary people, grouped into cooperative enterprises, rather than from the fact of land-ownership and the power of the landowner as the protector of food.

Capitalism relies upon a network of trust. Capitalist actors, consumers, producers, and middle-men, build up long-term relationships of trust, backed up by a legal system that deals with the egregious defaulters. Science backs up this model with the Prisoners Dilemma concept, where it turns out that the best strategy is to trust people that act in a trustworthy manner towards you, and have nothing to do with people who demonstrate untrustworthiness.

But there has been, since the beginning of capitalism, an opposing meme, that the capitalist trust network is fundamentally unjust because it creates unequal results. Hard workers, or just lucky workers, make more, and unlucky or less endowed workers make less. This offends the hunter gatherer instinct for equality.

There is a double catch here. On the one hand, some capitalists succeed not by hard work, but by luck. On the other hand, some unlucky workers are not just unlucky, but freeloaders taking advantage of the successful work of others.

In the 19th century, in a spontaneous process, people developed new social structures to ameliorate the luck quotient by developing labor unions and fraternal associations. These social institutions extended the solidarity among blood brothers outwards to non-related people who declared themselves the moral equivalent of brothers. Thus unlucky people could be assisted by their union or Masonic brothers, and nascent freeloaders encouraged to mend their ways, or get expelled from the brotherhood.

We threw the fraternal model away in the early 20th century and replaced it with the welfare state.

But the welfare state is a full-on encouragement to freeloaders. It tells members of society that if they are victims, they deserve help; that is their right. There is no mechanism to encourage social behavior. If you qualify for help, you get help. Obviously there is no limit to this sort of thing. It encourages everyone to discover a "right" and to demand support from the rest of society because of some disability.

We can see, from the recent Wisconsin events, that it is very difficult reverse the process and to tell the benefit recipients that the money is gone. Typically they react with rage, just like the Wisconsin protestors. Freeloaders, like most evildoers, are not like Shakespeare's Iago, who delights in his villainy. They justify their evildoing with lies and self-deceit. They persuade themselves that they deserve what they steal; they have a right to it.

But obviously, the Springtime for Freeloaders is coming to an end, the welfare state is running out of money.

The question for reformers, working to restore a society of trust out of the debris of the age of freeloading, is how to proceed? Hawks like radio host Hugh Hewitt are pushingRepublicans in Congress to press the pedal to the metal, and set up a showdown with Democrats, replicating the actions of Gov. Scott Walker (R) in Wisconsin.

But I wonder. I think that the freeloaders are going to have to see the bottomless pit opening up under them before they will be willing to give up their "rights," and I don't think we have reached that point. I don't think the average benefit recipient has a clue how close we are to a real financial meltdown.

Against that is the call of conscience, the need to be right with the divine judge. It is all very well to plan strategy and put your opponent in an impossible position. But against that is the moral imperative, to do the right thing.

And the right thing is to repair the government finances, no matter who it benefits today, or who it benefits tomorrow.

Because in the end we all must stand before the divine judge.

Christopher Chantrill blogs at www.americanmanifesto.org.

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Beyond Mere Blame
What led our liberal friends into the blind alley of the administrative welfare state?

Government and the Technology of Power
If you scratch a social reformer, you will likely discover a plan for more government.

Business and the Web of Trust
Business is all about trust and relationship.

The Bonds of Faith
No society known to anthropology or history lacked religion.

All of the Above
Society is differentiated into three sectors.

Springtime for Freeloaders
The modern welfare state encourages freeloaders.

The Curse of Compulsion
The larger the government, the smaller the society.

The Real Meaning of Society
Broadening the horizon of cooperation in the “last best hope of man on earth.”

The Greater Separation of Powers
If you want to limit power then you must limit power.

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“Civil Society”—a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churches—builds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust

[W]hen I asked a liberal longtime editor I know with a mainstream [publishing] house for a candid, shorthand version of the assumptions she and her colleagues make about conservatives, she didn't hesitate. “Racist, sexist, homophobic, anti-choice fascists,” she offered, smiling but meaning it.
Harry Stein, I Can't Believe I'm Sitting Next to a Republican

[T]he Liberal, and still more the subspecies Radical... more than any other in these latter days seems under the impression that so long as he has a good end in view he is warranted in exercising over men all the coercion he is able[.]
Herbert Spencer, The Man Versus the State

These emerge out of long-standing moral notions of freedom, benevolence, and the affirmation of ordinary life... I have been sketching a schematic map... [of] the moral sources [of these notions]... the original theistic grounding for these standards... a naturalism of disengaged reason, which in our day takes scientistic forms, and a third family of views which finds its sources in Romantic expressivism, or in one of the modernist successor visions.
Charles Taylor, Sources of the Self

Families helped each other putting up homes and barns. Together, they built churches, schools, and common civic buildings. They collaborated to build roads and bridges. They took pride in being free persons, independent, and self-reliant; but the texture of their lives was cooperative and fraternal.
Michael Novak, The Spirit of Democratic Capitalism

For [the left] there is only the state and the individual, nothing in between. No family to rely on, no friend to depend on, no community to call on. No neighbourhood to grow in, no faith to share in, no charities to work in. No-one but the Minister, nowhere but Whitehall, no such thing as society - just them, and their laws, and their rules, and their arrogance.
David Cameron, Conference Speech 2008

As far as the Catholic Church is concerned, the principal focus of her interventions in the public arena is the protection and promotion of the dignity of the person, and she is thereby consciously drawing particular attention to principles which are not negotiable... [1.] protection of life in all its stages, from the first moment of conception until natural death; [2.] recognition and promotion of the natural structure of the family... [3.] the protection of the right of parents to educate their children.
Pope Benedict XVI, Speech to European Peoples Party, 2006

No lesson seems to be so deeply inculcated by the experience of life as that you should never trust experts. If you believe doctors, nothing is wholesome: if you believe the theologians, nothing is innocent: if you believe the soldiers, nothing is safe. They all require their strong wine diluted by a very large admixture of insipid common sense.
Lord Salisbury, “Letter to Lord Lytton”

What distinguishes true Conservatism from the rest, and from the Blair project, is the belief in more personal freedom and more market freedom, along with less state intervention... The true Third Way is the Holy Grail of Tory politics today - compassion and community without compulsion.
Minette Marrin, The Daily Telegraph

In England there were always two sharply opposed middle classes, the academic middle class and the commercial middle class. In the nineteenth century, the academic middle class won the battle for power and status... Then came the triumph of Margaret Thatcher... The academics lost their power and prestige and... have been gloomy ever since.
Freeman Dyson, “The Scientist as Rebel”

The Union publishes an exact return of the amount of its taxes; I can get copies of the budgets of the four and twenty component states; but who can tell me what the citizens spend in the administration of county and township?
Alexis de Tocqueville, Democracy in America

Conservatism is the philosophy of society. Its ethic is fraternity and its characteristic is authority — the non-coercive social persuasion which operates in a family or a community. It says ‘we should...’.
Danny Kruger, On Fraternity

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