http://www.nature.com/nsu/020107/020107-6.html

Prosperity through punishment
Retribution can breed cooperation.
10 January 2002
JOHN WHITFIELD



Cooperation can flourish if the public-spirited majority can punish
freeloaders, say Swiss economists. People will pay to punish - suggesting
that their notions of fairness outweigh selfish considerations. The work
may help explain why people cooperate in society.
In an investment game with shared profits, players punish those who do not
contribute to the group's good, despite the personal cost. The emotional
satisfaction of dispensing justice seems to spur them on: "People say, 'I
like to punish'," says Ernst Fehr of the University of Zurich.
The fear of being fined keeps potential defectors in line, and the power
to punish gives willing cooperators a sense of security. These dynamics
may explain why early humans banded together into cooperative groups for
hunting or warfare.
Explanations of cooperation have tended to focus on what the altruist gets
out of it, either through the swapping of good turns or the benefits to
family members. "For a very long time in economics and biology there's
been an assumption of self-interest," says economist Herbert Gintis of the
University of Massachusetts, Amherst. Instead, he says, it seems that
egalitarianism is "a basic part of human behaviour".
The research may hold lessons for policymakers attempting to build social
cohesion, he believes. Decisions may be more acceptable if they come from
within the community and not from a remote central government. "There
could be more community-based policing, and more emphasis on shaming
[criminals] and rehabilitation within the community," Gintis says.
Pay or be punished

Fehr and his colleague Simon Gachter, of the University of St Gallen,
devised an economic game where four anonymous participants had to decide
how much to invest in a common pot. Returns were balanced so that the
'rational' strategy was to invest nothing and reap the benefits of other's
contributions. But by investing a lot, the whole group could gain.
The amount invested by the players was revealed after each round. In some
games, players could then fine each other, but they had to pay a small sum
for this. The make-up of the group changed with each round, preventing
players from learning whether they could trust one another.
When penalties were allowed, the common good prevailed, and the investment
by each group member climbed.1 "But if there's no opportunity for
punishment, cooperation unravels," says Fehr, with investment declining
rapidly.
Union power

Cohesion-through-punishment is an influential force in contemporary
western society. In industrial disputes, for example, the hatred heaped on
strike-breakers cements solidarity, says Fehr.
Conversely, the waning of support for state welfare programmes among the
US middle class over the past few decades was caused by a perception that
too many freeloaders were exploiting the system without fear of detection
or punishment, says Gintis.
Gintis acknowledges the potential pitfalls of using local action to stamp
out social scrounging: it might fragment communities into opposing
factions, or breed resentment of nonconformists.
There are also problems if fear of punishment cultivates antisocial aims,
Fehr points out. "You see it in the Mafia," he says, where the threat of
reprisal maintains a code of silence.

References
Fehr, E & Gachter, S. Altruistic punishment in humans. Nature, 415, 137 -
140, (2002).



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