The selfish employee
If you know something about evolution, but not enough, you may think it has something to do with “the survival of the species.” I hate to break it to you, but this idea makes absolutely no sense.
To understand why we have to go back to the basics. From the standpoint of evolution, living beings do essentially two things: survive, and reproduce. When they reproduce, part of their genes is replicated and transmitted forward to their descendants, making the availability of the traits determined by these genes more prevalent in the population. By the same token, when living beings fail to survive and reproduce, the prevalence of their traits is reduced. However, as the replication process is not perfect, new traits appear from time to time, creating different beings that may branch out from the existing ones. If the beings in one of these branches are similar enough to each other, and considerably different from other beings, we call them a “species.” This is the origin of “species.”
But if you have been paying attention, you may notice that “species” do not play any special role in this story. It is merely a way of classifying beings into groups, in the same manner we could classify them into kingdoms (animals vs plants), classes (mammals vs amphibians), or families (canids vs felids). More than a technicality, this realization gives us real insight into behavior.
For example, a popular myth claims that lemmings commit mass suicide when the lemming population gets unsustainably big, so there can be more resources for the remaining lemmings. But from the vantage point of evolution, a lemming couldn’t care less about the lemming species. A gene for caring about the species could never get passed on because all the lemmings carrying it would, well, kill themselves.
But if the lens of “species” is the wrong level of analysis to understand evolution, are individual beings, then, the main units of natural selection? When we think this way, we start running into some problems too. Because although lemmings do not commit mass suicide, some animals do in fact sacrifice themselves for the good of others. Some monkeys, for instance, emit loud warning calls when they see predators approaching, which draws attention to themselves and decreases their chances of survival, but at the same time alerts their kin to run from danger, potentially saving them. How can we make sense of this type of “senseless” behavior?
As it turns out, we still have to go down one step to find the correct level of analysis, all the way to the genes. Because if you notice from the story I told earlier, when beings reproduce, it’s not them in their entirety that are getting replicated, but their genes instead. Therefore, for a trait to get passed on throughout the generations, it has to benefit the gene that determines it. But how can a gene for self-sacrifice survive?
Imagine you are a monkey who developed a mutation that makes you produce an alarm call when predators come. This would obviously not benefit yourself, as you would most likely die by doing so. But if you manage to have kids before this happens, we can expect nearly half of them to carry the same gene. This means that if in the act of sacrificing yourself you end up saving lots of your children, the gene’s prevalence in the population increases. Your children, in the same manner, may end up saving their siblings or their own children by doing the same thing, guaranteeing the survival of the gene. In this sense, a gene that guarantees not its own preservation but the preservations of its copies in other beings will also tend to increase in prevalence in the population, giving rise to behaviors such as self-sacrifice to save kins.
As you can see, in evolution there is no such a thing as survival of the species, nor even survival of the individual; there is only survival of the genes. It was this conclusion that led Richard Dawkins to publish his first book, The selfish gene, in 1976, summarizing the main findings from evolutionary biology from the previous decades. Dawkins called this type of gene selection “selfish” because a gene’s sole “interest” is its survival, and all kinds of “altruistic” behavior that come from it, such as screaming when a predator arrives, exist merely as long as they promote the gene’s survival.
The 2008 financial crisis
The interesting thing about Dawkins' insight is realizing that once you get rid of arbitrary groupings (in his case, “species”), and go down to the basic unit of analysis (in his case, “gene”), you start to understand some behaviors that seem completely illogical at first. And what better collection of seemingly illogical behavior than a financial crisis?
During the 2008 financial crisis, it became clear that some financial institutions were holding too much debt (or too much in worthless assets) to be sustainable in the long run. These organizations had put themselves at a level of risk that totally compromised their long-term survival. But how could a firm get to this point? I mean, it makes absolutely no sense that a bunch of reasonably intelligent and financially informed firms would want to put themselves in this situation.
A common explanation is that these institutions knew that they were “too big to fail,” meaning that they knew that due to their significant relevance in the economy the government would eventually bail them out to avoid bigger problems. Although this is true, it still seems kind of weird that they would be so risky to the point of almost jeopardizing their entire operations only on the belief that they would be saved. Reducing the price you pay for your downfall does increase your propensity to risk, but shouldn’t lead organizations into clearly reckless behavior.
Well, as it turns out, “firms” are one of these arbitrary groupings we use to understand reality, just like “species.” But in reality, there is no such a thing as a firm, or an organization, or a government; it’s just a bunch of people, who might as well hate each other, working together under the same LinkedIn bio. Ultimately, it is individuals who make decisions, not organizations. So if the behavior of an organization seems senseless at first, it may well be the case that what led to this behavior was the accumulation of individual behaviors that were pretty sensible, even rational, from the point of view of the individual.
And this was exactly the case in the 2008 financial crisis. Because although the “firms” — whatever that might be — didn’t want to put themselves at risk, the actual individuals driving the decisions had all the incentives to do so. For instance, if your Christmas bonus is determined by the sheer volume of money you lend, then you don’t really care to whom you are lending it, or about the probability you will see the money back; you only care about lending more and more. And these kinds of incentives, which don’t align the interests of the individuals with the interests of the firms, were widespread in the financial industry. (I would love to say they aren’t anymore, but I’m afraid I can’t make such a claim.)
Therefore, what people were actually doing was behaving like the selfish genes in the natural world: acting upon their own interests, with no relevant concern for larger fictional entities such as “companies” of “the economy.” In fact, a banker has as much interest in reducing their bonus to protect the overall market from systemic risk as a lemming has in killing himself for the sake of the lemming species. The agents may have been acting collectively irrationally — if there is even such a thing —, but they were surely being individually rational.
Dissecting behavior to the level of the individual gives you a powerful tool to understand behaviors that may startle you at first by how collectively irrational they seem. “Why did this company do X, when it is detrimental to its long-term profits?” or “It makes no sense for the government to do Y since it is bad for the people!” If you look closely, you may realize that in the majority of these situations all the agents are behaving absolutely rationally, just following the incentives they have in front of them. The structure of incentives individuals face is by far the best tool we have for understanding weird collective behavior.
Netflix
The realization that it is ultimately individual behavior that guides organizations also entails that if you want to lead people into doing something greater than themselves then you have to align their interests with these higher purposes. Many companies try to do this by offering bonuses, but as the example of the 2008 financial crisis vividly illustrates, objective metrics many times fail to capture everything you want your employees to be aiming for.
The company that has taken the most heterodox approach to aligning its selfish employees’ interests was Netflix. It has dropped all performance bonuses and indicators for its employees and focused instead on creating a culture in which everyone feels that their ultimate goal is to benefit Netflix as a whole. The idea here is that instead of giving employees blind metrics to follow, which if not properly set could work to Netflix’s disadvantage, you can create a company ethos in which everyone feels they have an obligation not to themselves but to the entire company.
This part of the culture is elegantly summarized in one of the company’s mantras: “We tell people not to seek to please their boss. Instead, seek to serve the business.” If an organization is rigidly organized around its hierarchy, the best thing employees can do to serve their own interests is to seek to please their boss. But if you realign the organization around a set of common goals, individual incentives shift in accordance. This is, of course, much easier said than done.
Max Weber
Although I think that the logic of the selfish gene provides a beautiful metaphor for why we should focus on individuals when studying social phenomena, the truth is that these ideas have been around in the social sciences much before The selfish gene was written. As a matter of fact, they were first proposed by no other than Max Weber himself. In his 1921 book Economy and Society, writing about the methodology of sociology regarding social groups, Weber proposed:
[T]hese collectivities must be treated as solely the resultants and modes of organisation of the particular acts of individual persons, since these alone can be treated as agents in a course of subjectively understandable action. … For sociological purposes … there is no such thing as a collective personality which "acts." When reference is made in a sociological context to a "state," a "nation," a "corporation," a "family," or an "army corps," or to similar collectivities, what is meant is, on the contrary, only a certain kind of development of actual or possible social actions of individual persons.
What Weber was saying was that groups such as “nation” or “corporation” cannot act, since they have no intentional states and make no decisions. When we say they act we are merely referring to a collection of individual decisions being made in their name. What gives these actions a collective character, then, is the meaning we attribute to them. As the Austrian economist Ludwig von Mises explained:
It is the meaning which the acting individuals and all those who are touched by their action attribute to an action, that determines its character. It is the meaning that marks one action as the action of an individual and another action as the action of the state or of the municipality. The hangman, not the state, executes a criminal. It is the meaning of those concerned that discerns in the hangman's action an action of the state. A group of armed men occupies a place. It is the meaning of those concerned which imputes this occupation not to the officers and soldiers on the spot, but to their nation. … For a social collective has no existence and reality outside of the individual members' actions.
One of Weber’s students, Joseph Schumpeter, called this method of analysis “methodological individualism.” By examining social phenomena through the lens of individual actions, which in turn can be explained by the motivations of individual agents, we get a much better understanding of social behavior.
Back to Dawkins
I must admit that although I am pretty content with my analogy between the selfish gene and methodological individualism, thinking too much about it raises an uncomfortable question. Because if methodological individualism suggests that social phenomena can be better explained as a collection of individual behaviors and the theory of the selfish gene, in turn, suggests that individual behaviors can be explained by gene selection, doesn’t that mean that we should try to explain society, as well, through the lens of genes?
Part of the answer, now I come to realize, is, well... yes. I have no doubt that a genetically informed view of human nature has a tremendous lot to contribute to the social sciences, as it helps us better understand where motivations come from in the first place. However, always looking at human behavior from the lens of genes or even neurons seems a bit like putting a vinyl record under the microscope to determine whether the music is any good. Once we’ve established what are the basic tendencies and desires that motivate human behavior, we don’t have to keep going back to the genes, in the same way that we don’t really need to look at the vinyl record if we can identify the major notes and rhythms in a piece of music.
As a final curiosity, Richard Dawkins himself realized how his theory of selfish genes could be applied to cultural evolution and decided to coin a term for the units of culture that get replicated and form greater cultural expressions. He mixed the word “gene” with the Greek word “mimeme”, meaning “imitated thing”, to form… “meme”. Yes, that kind of meme. When Dawkins published The selfish gene, he had no idea it would be such a great success, as he thought it to be only a summarization of what evolutionary biologists already knew. Much less expected, however, is that the academic term he created would be borrowed to name Internet jokes. But the people creating funny images on the Internet couldn't care less about the origin of the term; they act solely on their own selfish motivations.
Thanks to André Eler, Edson Matsubayashi, François Boris, Helena Freire, Nicolas Klein-Zirbes, and William Radaic for reading drafts of this.