Paul H. Rubin is a Research Fellow at The Independent Institute, and the Samuel Candler Dobbs Professor of Economics. He received his B.A. from the University of Cincinnati in 1963 and his Ph.D. from Purdue University in 1970. He is a Fellow of the Public Choice Society, a Senior Fellow at the Progress and Freedom Foundation, an Adjunct Scholar at the American Enterprise Institute and the Georgia Public Policy Foundation, and former Vice President of the Southern Economics Association. Dr. Rubin has been Senior Staff Economist at President Reagan’s Council of Economic Advisers, Chief Economist at the U.S. Consumer Product Safety Commission, Director of Advertising Economics at the Federal Trade Commission, and vice-president of Glassman-Oliver Economic Consultants, Inc., a litigation-consulting firm in Washington. He has taught economics at the University of Georgia, City University of New York, VPI, and George Washington University Law School.
Dr. Rubin has written or edited seven books, and published over one hundred articles and chapters on economics, law, regulation, and evolution in journals including the American Economic Review, Journal of Political Economy, Quarterly Journal of Economics, Journal of Legal Studies, Journal of Law and Economics, the Yale Journal on Regulation, and Human Nature, and he sometimes contributes to the Wall Street Journal and other leading newspapers. His work has been cited in the professional literature over 1400 times. Recent books include Managing Business Transactions, Free Press, 1990, Tort Reform by Contract, AEI, 1993, Promises, Promises: Contracts in Russia and Other Post-Communist Economies, Shaftesbury Papers, 1998, Privacy and the Commercial Use of Personal Information, Kluwer, 2001, with Thomas Lenard, and Darwinian Politics: The Evolutionary Origin of Freedom, Rutgers University Press, 2002. He has consulted widely on litigation related matters, and has addressed numerous business, professional, policy and academic audiences.
Grégoire Canlorbe is a French intellectual entrepreneur. He currently resides in Paris.
Grégoire Canlorbe: How would you sum up the main points of convergence and divergence between dominance hierarchies (“pecking orders”) and productive hierarchies?
Paul H. Rubin: As to convergence, both are hierarchies—some individuals have power over others. Also, individuals voluntarily join both types of hierarchies, although for different reasons. People join productive hierarchies because they can be more productive and so earn more income in such a hierarchy. People join dominance hierarchies because they receive protection in such a hierarchy. Even low ranked members have a place, and receive protection from other group members. Moreover, productive hierarchies evolved from dominance hierarchies.
However, there is much divergence as well. In particular, a pure dominance hierarchy mainly allocates a fixed amount of some good. That is, the dominant will get more, the second ranked will get somewhat less, and so on down the hierarchy. The amount to be distributed is fixed. In a productive hierarchy, the hierarchy is actually able to produce more, so that every individual gets more than he or she would get in an individualistic regime. In primitive hierarchies, hierarchical hunting parties enable each person to get more game than otherwise (part of an antelope rather than a rabbit or two.) In modern societies, the great productivity of large corporations enables workers to produce more than they could as individuals, and so everyone benefits.
Productive hierarchies evolved from dominance hierarchies. Many mammalian and even non-mammalian species (“pecking order” refers to chickens) have dominance hierarchies. Only humans have productive hierarchies. Moreover, there was no “aha” moment when our ancestors shifted to a productive hierarchy. Rather, the process would have been gradual. Some dominant would have noticed that if he just changed things a little, then the hunting party would have been more successful. Moreover, there is no central direction needed. Rather, someone will voluntarily join a productive hierarchy if his income will increase, and each person will join that hierarchy which pays him or her the most, which is the hierarchy in which he or she is most productive.
Grégoire Canlorbe: How would you personally situate the point in time when humans began using hierarchies for production? In your opinion, how and for what motives did they convert the mechanism of the dominance hierarchy into the productive hierarchy?
Paul H. Rubin: Probably the transition was gradual. In primitive hunting bands, the best hunter might have taken charge (“You go that way, you wait here.”) Unfortunately, conflict has long been a part of human behaviour, and the best warriors would have been in charge in times of conflict. Even though violence seems destructive, for the victorious party it is productive and so there are benefits to being better at violence, either to win (offensive violence) or to avoid losing (defensive violence.)
Once our ancestors became stationary and began to farm, productive hierarchies became much more important. Farming and a sedentary existence created value for many complex activities (building houses and storage facilities, constructing irrigation systems, establishing boundaries, etc.) and these are best done in productive hierarchies. Moreover, at this time, leaders became those who were best at organizing productive hierarchies (although often productive in violence) rather than those best a controlling others.
Grégoire Canlorbe: Could you give a brief account of what we know, in anthropology as well in evolutionary biology, of the causes of division of labour and its phases of development in human societies?
Paul H. Rubin: In sufficiently primitive societies (hunter-gathers, or foragers) there is little division of labor. There is division of labor by gender. Men hunt and fight, women gather and take care of the children. There is also some division of labor by age. Old people provide training to the young. Young males are the warriors. However, the division of labor is limited. Adam Smith taught that “The division of labor is limited by the extent of the market,” meaning that a small society cannot have much division of labor. For example, a good stone axe maker cannot be employed full time at making axes in a small band because a small society would have no use for all the axes he could make. He would make some axes, but also engage in hunting and other activities. He would only be partially specialized.
Once our ancestors became sedentary, the scope for division of labor greatly increased. This is for two reasons. First, there were simply more things to do – farm various crops, build structures, police property rights, and myriad other tasks. Second, societies and markets became larger, and so there was more possibility of specialisation, the flip side of division of labor. This process has never stopped – as transportation costs have been reduced, markets have continued to grow, from national to international, and many of us now do such highly specialised jobs that it is often difficult to understand what your neighbour actually does for a living.
The converse is also true. From time to time, some group is split off from a larger society. For example, the Tasmanians were separated from the Australian aborigines by a rise in the ocean, and they lost many skills that they had because the society was now too small to support as much division of labor.
Grégoire Canlorbe: In your 2002 book, Darwinian Politics: The Evolutionary Origin of Freedom, you tried to investigate the genetic roots of human desire for freedom. Would you say retrospectively that some of your own political values and prejudices were affected by your research work? Are you still nowadays the same libertarian you used to be before starting your inquiry in the evolutionary influences on political behaviour?
Paul H. Rubin: I now understand some of the bases for anti-libertarian interventions, such as drug prohibitions. However, I don’t think my own libertarian beliefs have changed. Even though I am a libertarian in domestic affairs, I have always been in favour of a strong national defence, a position that many libertarians do not share. My study of the role of conflict in human evolution has if anything made me more concerned with the necessity of defence and the danger of international conflict.
Grégoire Canlorbe: Evolutionary psychology suggests that most of our psychological traits were imposed upon us by the so-called EEA (Environment of Evolutionary Adaptedness), i.e. essentially the Pleistocene, the whole, long period lasting from 1.6 million years ago up until the shift to the Holocene with the invention of agriculture and large settlements 10,000 years ago.
The catalogue of our political preferences, you argue, was shaped in prehistory, during the 80,000 hunter-gather generations that took us from apes to humans. In particular, our desire for freedom is nothing but an old Pleistocene adaptation pitted against extreme coercive hierarchy.
Could you come back on the deep meaning of this assertion?
Paul H. Rubin: Just as humans have always desired freedom, so humans have also desired to be dominants. This has not changed. What has changed is the ability of dominants to hide their preference for domination. Thus, even the worst dictatorships call themselves “Peoples Republics,” implying that they are seeking freedom and benefits for the populace, not domination. In democracies, dominants are able to hide their goals, often by claiming to “protect” consumers. For a recent U.S. example, the Federal Communications Commission has recently taken over the Internet, claiming to provide something called “net neutrality.” This is just one example of successfully hiding coercion behind a label of protection. These strategies often work. In democracies, citizens often vote for coercive parties in part because of such obfuscation.
Grégoire Canlorbe: One of your main insights is that Karl Marx’s analysis of capitalism attributes features to productive hierarchies that are actually inherent to dominance hierarchies. Moreover, you suggest that the way in which the EEA has equipped us to understand simple barter and zero-sum trading has also given us an immediate intuitive grasp of the Marxian labour theory of value, i.e. the idea that the value of something is created by the labour invested in it.
The converse of this fact is that we do not easily understand the productive use of capital and the payment of interest it entails. This may explain why many religions forbid the payment of interest.
Could you elaborate on these different points?
Paul H. Rubin: Marxism views capitalists as “exploiting” labor, and workers as being controlled by capitalists. This might be the case in a dominance hierarchy. However, in a market economy, workers are free to move and so it is not possible for capitalists to exploit them. Workers can simply take another job if they feel underpaid.
We have no intuition for the productivity of capital. As you say, that is the basis for the Marxist “labour theory of value” and also for the prohibition in many religions of interest. Most modern religions have managed to eliminate this prohibition. Islam still prohibits interest, and Islamic accountants and economists must go through complicated financial contortions in order to do business without paying explicit interest on loans or investments.
Grégoire Canlorbe: According to a predominant view among free market defenders, political ideologies promoting income redistribution are merely based on feelings of envy and resentment. In the words of Thomas Sowell, “envy plus rhetoric equals “social justice.” ”
According to you, is this popular view scientifically corroborated by anthropology and evolutionary psychology? If we are likely to support redistribution programs, is it ultimately because human species evolved toward a tendency to envy and feeling dispossessed or cheated by the mere fact that others own what we do not own?
Paul H. Rubin: There is an evolutionary basis for altruism separately from envy. Our ancestors lived close to the Malthusian margin, and life was risky and uncertain. For example, a hunter might have an unsuccessful hunt even if he tried hard. In these circumstances, it paid to share – the hunter who was successful today might share with the unsuccessful hunter, and the positions might be reversed tomorrow. Someone might be injured, and it would pay to feed him until he recovered because a larger band would be more secure.
However, in the small group environment in which we evolved, individuals could monitor others. I might claim to have a bad hunt, but I was really sleeping by the river. Then others would observe this and refuse to share with me. In our larger societies, it is more difficult to detect shirking, but altruistic impulses still exist, so it is possible for some to exploit these feelings. Moreover, recipients of transfers can also vote, and they would want to vote themselves larger payments.
Envy evolved in a zero sum society, so that if I had more you probably had less. In today’s non-zero sum environment, I might have more because I am more productive, but you might view my wealth through the zero-sum lens. Thus, there is probably too much envy today, and too many decisions are based on envy.
Grégoire Canlorbe: Anarcho-capitalism is a political philosophy, which advocates the elimination of the state in favor of individual sovereignty, private property, and open markets. Anarcho-capitalists believe that in the absence of statute, private enterprise could provide law enforcement, and the market place could resolve disagreements about what the law is and what the law means.
What is your opinion on anarcho-capitalism? Does it seem to you a desirable and achievable ideal given what we know on human species and its cognitive and emotional predispositions?
Paul H. Rubin: I am not an anarcho-capitalist. I see no alternative to the state for certain functions. The most important is defence against both internal and external predators. For example, I see no way to prevent private police from exploiting society, including the people that hire them. Someone must also run the legal system and protect property rights. Moreover, I do not see any way to finance national defence without some sort of government financed by taxation.
Unfortunately, once a government has powers of taxation and weapons, I see no way to restrain it. Fortunately in the U.S. we have had a 240 year run with no major exploitation by the government. We have less freedom than would be optimal, but we still have a good deal of freedom. Moreover, net the trend is probably towards more freedom. African-Americans, women and homosexuals have gained significant amounts of freedom in the last 50-75 years, and these gains outweigh any loss in freedom from excessive government regulation. Even with respect to government regulation the trend is not so clear. For example, we have deregulated the entire transportation industry, with tremendous gains to the economy. We have also reduced tariffs and other barriers to international trade, again with tremendous benefits.
Grégoire Canlorbe: A popular discourse is to accuse free-market ideas of denying the reality of the common good, or at best reducing it to an economic optimum as enabled by free competition and the law of the supply and demand.
On the one hand, the common good is emptied of all social and cultural content in favor of a strictly economic interpretation of the notion: the point of optimal agreement between buyers and sellers, produced by constant negotiations between these two market players.
On the other hand, the sovereign ceases at the same time to be the guarantor of the common good: it is not within its jurisdiction to intervene in the economy to correct market prices, make public investments, protect social welfare, or to establish protectionist barriers. Its role is limited to protect property rights and to “leave alone” market players.
All this leads to promoting an atomized society, one made exclusively of individuals who pursue their commercial interests and have lost any collective purpose, any kind of common ideal of which the sovereign would be the custodian. What do you retort to this recurring criticism?
Paul H. Rubin: I don’t see it as a criticism. A society in which each individual is free to pursue his or her own goals subject to a few constraints is an ideal society in my mind. I do not understand any notion of the common good. A free society is not inconsistent with giving the sovereign power to correct market failures, such as the creation of public goods, the most important of which is defence.
Grégoire Canlorbe: Our interview comes to its end. Would you like to add a few words?
Paul H. Rubin: Thank you for a very interesting and well thought out set of questions. If you had asked these as I was writing the book, it would have been a much better work.
Grégoire Canlorbe: You’re welcome.