Human History Is an Ever-Expanding Circle of Empathy
The world has become freer, more just, more compassionate, gentler, and more equal. But there is clearly room for improvement.
Marian L. Tupy —
There are many different ways to look at the history of U.S. race relations. One extreme, for example, compares America’s past and present state of race relations with a future when all of America’s remaining imperfections will have been ironed out. Let’s call that the “future perfect” perspective. The other extreme compares the flawed present with a past scarred by still greater injustices. Let’s call that the “past imperfect” perspective. Both can be illuminating and both can be held at the same time. An appreciation of the past-imperfect perspective provides an understanding of history as a complex and messy process of gradual liberation. The future-perfect perspective reminds us that we can and should strive to do better.
Progress of Civilization
Were a reasonable person today asked to design a society de novo, the blueprint would almost certainly contain a proviso stipulating that all people are equal under the law. Few things strike the modern reader as more sensible than equal protection without regard to race, sex, or class. What’s often underappreciated is how extraordinarily recent such sentiment is.
Homo sapiens is, by some accounts, 300,000 years old. Throughout most of that time, we were engaged in a zero-sum struggle for survival. We survived through the slaughter of wild animals and flourished by thieving from other humans or enslaving them outright. Our allegiances rested with our family and tribe, which made our individual survival easier. The notion of bestowing equal dignity on all people — no matter what they looked like and where in the world they lived — would have struck our ancestors as utterly fanciful. Not surprisingly, scholarly understanding of “our place in the universe” reflected the dismal reality of human existence. Most of the ancient thinkers believed that history was a process of gradual decline from a mythical “golden age.” Homo homini lupus — a man is a wolf to another man.
Fast-forward some 10,000 generations to the time of the Renaissance, when the renewed interest in science had to be reconciled with the main tenets of the Christian religion, including the often-ignored and inconsistently applied insistence of Christian teachings on the equal dignity of all of God’s children. That led some thinkers to theorize that the physical world had to be governed by divine laws. Since the Christian God was good, the Renaissance reasoning went, so must be the laws governing society in general and individual lives in particular. Working from that assumption, later philosophers, such as the Scottish thinker Francis Hutcheson (1694–1746) argued that a good society resulted from “natural bonds of beneficence and humanity” in all people. That idea of universal human bonds formed the foundation of the Enlightenment. Humanism was born.
According to the American scholar Arthur Herman, the Enlightenment developed the “first secular theory” of human progress, which was then known as “civilization.” As a historical process, civilization came to be seen as a linear transformation with distinct stages. First, humans existed in a “state of nature.” They were alone and vulnerable to cold, hunger, and predation. In the second stage, humans came together to form nomadic bands of herders and hunter-gatherers. With agriculture came the third stage of human development. Finally, people gathered in towns and cities and began to live through industry and commerce.
With each stage, humans become more productive, more connected, and more civil. As agriculture improves and food becomes abundant, people specialize in distinct tasks and live through exchange. People who might have been rivals become trading partners and friends. As human relationships become more complex, people become socialized, polite, and refined. All of that stimulating conversation eventually leads to further advances in art and science.
The underlying force that drove the process of civilization was, the Enlightenment thinkers believed, commerce. In the words of Scottish historian William Robertson (1721–1793), “Commerce . . . softens and polishes the manners of men. It unites them, by one of the strongest of all ties, the desire of supplying their mutual wants.” People, who might have otherwise hated one another, in other words, were brought together in the pursuit of profit. By the 18th century, the extent of human cooperation within the context of the market economy reached levels that even philosophers, such as Voltaire, felt obliged to opine about it.
Go into the London Stock Exchange — a more respectable place than many a court — and you will see representatives from all nations gathered together for the utility of men. Here Jew, Mohammedan and Christian deal with each other as though they were all of the same faith, and only apply the word infidel to people who go bankrupt. Here the Presbyterian trusts the Anabaptist and the Anglican accepts a promise from the Quaker. On leaving these peaceful and free assemblies some go to the Synagogue and others for a drink, this one goes to be baptized in a great bath in the name of Father, Son and Holy Ghost, that one has his son’s foreskin cut and has some Hebrew words he doesn’t understand mumbled over the child, others go to their church and await the inspiration of God with their hats on, and everybody is happy.
Besides creating wealth and friends, commerce created the middle class, or “bourgeoisie.” This class of people was educated, but unlike the nobility, the bourgeois still had to work to survive. The Scottish literary critic Francis Jeffrey (1773–1850) argued that the unique position of the bourgeoisie was responsible for the continuing moral, social, and economic advances of civilization. Finally, commerce allowed people to create wealth independently of their rulers, which in turn allowed them to question the political relationship between ruler and subject. Once people could make a living outside feudal structures, which is to say without the need for a lord’s land, people started to question the need to obey the lord’s laws.
To thinkers such as the Scottish economist Adam Smith (1723–1790) and French historian François Guizot (1787–1874), dependency and tyranny were remnants of humanity’s barbarian past, while liberty and self-governance were the hallmarks of the Enlightenment. The French mathematician and philosopher Nicolas de Caritat, Marquis de Condorcet (1743–1794) went as far as to predict the global triumph of liberty. He wrote:
Then will arrive the moment in which the sun will observe in its course free nations only, acknowledging no other master than their reason; in which tyrants and slaves, priests and their stupid or hypocritical instruments, will no longer exist but in history and upon the stage; in which our only concern will be to lament their past victims and dupes, and, by the recollection of their horrid enormities, to exercise a vigilant circumspection, that we may be able instantly to recognize and effectually to stifle by the force of reason, the seeds of superstition and tyranny, should they ever presume again to make their appearance upon the earth.
His contemporary, German philosopher Johann Gottlieb Fichte (1762–1814), agreed. Since the Europe of his day was once barbarous, he reasoned, surely everyone was capable of enlightenment. Arriving at that point, it needs repeating, took centuries. The evolution of ideas was mirrored in the real world by the gradual liberation (empowerment, in today’s parlance) of the formerly powerless (or excluded). Human institutions, which were previously dominated and exploited by the nobility, the clergy, and the army, began to serve a broader spectrum of society. The role of the bourgeoisie, as the University of Chicago at Illinois economist Deirdre McCloskey documented in her trilogy of books on the bourgeois era, was crucial in breaking the power monopoly of the “higher orders.”
Like any other revolutionary idea, greater inclusion and empowerment (or, to use the original terminology, “liberalism”) did not progress steadily and without setbacks. Some people jealously guarded their new rights, while others refused to bestow equal dignity on others outright. And so, liberalism coexisted with imperialism and slavery for centuries. On occasion, rights that were previously granted were violently, but thankfully only temporarily, withdrawn from some people, such as the Jews during the Third Reich, Black Americans during the Woodrow Wilson administration, and Japanese Americans during World War II. But the tide of gradual liberation continued, eroding eternal prejudices that still remained.
Equal Dignity Emerges
Since both the Enlightenment and the bourgeoisie arose in Europe and its offshoots in North America, it stands to reason that the initial beneficiaries of the change in relations between the powerful and the powerless were the city burghers or the newly enriched white men. Of course, the matter did not rest there. Once the power monopoly of the “higher orders,” which characterized human society since the agricultural revolution some 12,000 years ago, was broken, others saw an opening. And so, over the past 200 years, Western economic and political institutions came to include women, ethnic minorities, and sexual minorities. Ponder that for a moment. Two centuries. That’s 0.07 percent of our time on Earth.
The process of institutional change differed across the globe. In England, for example, the parliament that emerged from the Glorious Revolution in 1688 originally consisted of nobles, bishops, and shire representatives, and the franchise was restricted to a tiny sliver of propertied men. The Reform Acts of 1832 and 1867 expanded the franchise further. By the time of the Representation of the People Act of 1884, some 60 percent of all men could vote. All men over the age of 21 and “qualified” women over the age of 30 got the vote in 1918, but equal enfranchisement of all women had to wait until 1928.
In America, the first people to get a say in politics were white male property owners. During the early part of the 19th century, state legislatures begin to limit the property requirement for voting; the de jure racial barrier to Black enfranchisement was removed only by the 15th Amendment to the U.S. Constitution in 1870. As everyone knows, the Southern states used every trick imaginable to keep Black Americans from voting as a practical matter for decades to come, and women were enfranchised only in 1920.
The Present Should Give Optimism about the Future
As a result of ideological and institutional changes, the world has become freer, more just, more compassionate, gentler, and more equal. But clearly there is room for much improvement. Our economic and political institutions are flawed because they are a product of flawed human beings. Or, as the German philosopher Immanuel Kant observed in 1784, “from such crooked timber as humankind is made of nothing entirely straight can be made.”
The future-perfect perspective is right to point to the injustices that still persist, but that does not mean that our society in general and our institutions in particular are unsalvageable. We should not throw out the baby with the bathwater in exchange for a promise of a utopian future, as some extremists demand. The word “utopia” combines two Greek words, οὐ (ou, or “not”) and τόπος (tópos, or “place, region”). It literally means “no place.” Those who attempted to reach it in the past — be it the religious zealots during the Wars of Religion in the 17th century, the French revolutionaries in the 18th century, or a plethora of Communist governments in the 20th century — failed to achieve freedom, prosperity, peace, or equality (except, of course, for the equality of suffering).
Those advocating a new start include Harvard University professor Cornel West said last month on CNN:
I think what we are witnessing America as a failed social experiment. What I mean by that is that the history of Black people for over 200 and some years in America has been looking at America’s failure. Its capitalist economy could not generate and deliver in such a way that people could live lives of decency. The nation-state, its criminal-justice system, its legal system could not generate protection of rights and liberties. And now our culture, of course is so market-driven — everything for sale, everybody for sale — it can’t deliver the kind of nourishment for soul, for meaning, for purpose. . . . The system cannot reform itself.
I doubt that West is right. After all, the United States has abolished slavery and Jim Crow laws and passed extensive civil-rights legislation — all in an attempt to overcome overt discrimination against Black Americans. Other reforms should follow. They should include policing reforms, aimed at protecting the safety and dignity of the citizenry, and occupational licensing reform, aimed at reducing the ranks of the unemployed.
But even if West is right, who is to say that out of the ashes of the old society, a better one will emerge? The evolution of ideas — the ever-expanding circle of empathy that the Australian moral philosopher Peter Singer has written about — is ongoing. As ideas change, so will the institutions that govern all of us. Judging by the universal condemnation of the killing of George Floyd, it seems reasonable to say that our society can adapt and change. Let’s keep it and make it better.
A version of this essay originally appeared in National Review.
People Overestimate the Actual Dishonesty of Others
“Do people believe that others are similarly, more, or less dishonest than they truly are? The accuracy of dishonesty beliefs is not only important for psychological knowledge, but also has implications for organizations and policymaking. In this paper, Study 1 presents a research program on moral decision-making comprising 31 different effects from 11 experiments, where participants could anonymously lie for personal gain. Crucially, participants were also asked to estimate what percentage of other people would lie in the same situation. An internal meta-analysis summarizing all belief-behavior comparisons revealed that people substantially overestimate others’ dishonest behavior (g = 0.61; k = 31; N = 8126), by 13.6 percentage points on average. This effect holds across study contexts and participants’ own behavior, and 63.5% of participants overestimated dishonesty by 5 percentage points or more (only 25.4% underestimated it). We then examined potential consequences of biased dishonesty beliefs in three pre-registered follow-up studies. Study 2 (N = 981) found that providing correct information about actual honesty levels enhanced general prosocial expectations (e.g., trustworthiness, fairness). Study 3 (N = 285) revealed that professional managers have pessimistic beliefs also about people’s real-world dishonesty (e.g., insurance fraud, workplace theft), and moral pessimism predicted greater support for freedom-restrictive countermeasures to reduce dishonesty (e.g., surveillance). Study 4 (N = 741) demonstrated that providing managers with correct information about actual honesty levels causally reduced their support for freedom-restrictive countermeasures. In conclusion, the pessimistic bias in dishonesty beliefs about others is robust, and it shapes prosocial expectations and policy preferences.”
Summary: Many people assume that markets breed dishonesty, but the opposite is true. Commerce depends on trust. Repeated exchange and reputation make honesty not just virtuous, but profitable. When trade is open and competition thrives, deceit is punished and integrity is rewarded. By contrast, heavy regulation invites corruption and favoritism. A truly commercial society, grounded in voluntary exchange and mutual accountability, is also a more honest and trustworthy one.
In my previous essays, I argued that a trade society is both a prosperous and trust-based society. Trust and trustworthiness in society revolve around norms of honesty. Dishonesty breeds distrust and frays the threads of our social fabric. Some may worry that dishonesty is the lifeblood of a commercial society: a system that runs on lies, with an every-man-for-himself attitude and shady opportunists around every corner. In fact, greater honesty is best achieved through reputational pressures and the mutual accountability that is fostered by frequent exchange; frequent exchange is enabled by the removal of corrupting restrictions.
In his Lectures on Jurisprudence, the Scottish economist Adam Smith described the commercial society in the following terms:
Whenever commerce is introduced into any country, probity and punctuality always accompany it . . . Of all the nations in Europe … the most commercial, are the most faithfull to their word … A dealer is afraid of losing his character, and is scrupulous in observing every engagement … When people seldom deal with one another, we find that they are somewhat disposed to cheat … When the greater part of people are merchants they always bring probity and punctuality into fashion, and these therefore are the principal virtues of a commercial nation.
In Smith’s view, fear of reputational damage and unemployment prevents fraud and dishonesty. He believed that success within a commercial society stems from “prudent, just, firm, and temperate conduct” and “almost always depends upon the favour and good opinion of … neighbours and equals; and without a tolerably regular conduct these can very seldom be obtained. The good old proverb, therefore, that honesty is the best policy, holds, in such situations, almost always perfectly true.” For Smith, the market in many ways makes us accountable to each other: repeated dealings and fear of reputational damage incentivize honest behavior. And plenty of empirical evidence supports his outlook.
Laboratory experiments demonstrate that trade teaches participants whom to trust and whom not to. Dishonest behavior is punished in the marketplace, providing an incentive for participants to be honest in their dealings. For example, one study found that adding market competition to the experiment reduced sellers’ over-diagnosis of high-quality treatment (when lower-quality would suffice) and increased buyer trust. Another experiment found that introducing market competition into one-off exchanges boosted trust and efficiency to match that of trading networks built on repeated interactions. Adding market competition and private reputation information in one experiment tripled trust and trustworthiness while increasing efficiency tenfold. By practicing honesty to protect their reputations, trade participants eventually internalize honesty as a habit.
Conversely, trade restrictions lead to greater dishonesty. For example, Transparency International’s Corruption Perceptions Index (CPI) measures the perceived levels of public sector corruption across numerous countries using multiple surveys of business people and country experts (Figure 1). Variousstudies that rely on the CPICPI have shown that a greater amount of international trade and foreign direct investment and low levels of state control of the economy curtail corruption. High levels of regulation—including regulation on trade—tend to be a strong predictor of corruption. Even seemingly small adjustments to trade procedures can make a difference. For example, the World Bank’s 2020 Doing Business report found that “economies that have adopted electronic means of compliance with regulatory requirements . . . experience a lower incidence of bribery.” That includes digital trade reforms such as electronic single-window systems, e-payments, paperless clearance, online certificate issuance, and more.
More recently, a 2023 study looked at firm-level data across 138 countries and confirmed that the imposition of more red tape in public services—such as import licenses—is associated with a greater tendency to pay bribes, particularly in nondemocratic countries. Similarly, a recent study found that India’s trade liberalization since the early 1990s, especially tariff reductions, significantly reduced the economic advantages of politically connected firms by decreasing their reliance on political favoritism. It appears that the friendlier a nation’s economy is to trade, the less corrupt it tends to be. Economic restrictions and regulations allow corruption to grow, instead of the economy. By reducing barriers, more trade is unleashed, which in turn promotes the “probity and punctuality” that Smith described.
When the level of economic freedom within countries is compared to their level of corruption, economically-free countries come out looking relatively clean. And the scores of the freest countries are more than twice as high as those of the least free countries (Figure 2). That’s because various aspects of economic freedom—including trade openness—are associated with lesscorruption. Freer trade makes reputation king, mitigating corrupt incentives and embedding honest norms throughout society.
Figure 2. Economic freedom and corruption
Source: Robert Lawson, Ryan Murphy, and Matthew D. Mitchell, “Economic Freedom of the World in 2022,” in Economic Freedom of the World: 2024 Annual Report, eds. James Gwartney, Robert Lawson, and Ryan Murphy (Fraser Institute, 2024), p. 33. Higher CPI scores denote less corruption.
As a case in point, East Germany suffered under severe trade restrictions prior to the fall of the Berlin Wall. After testing randomly selected German citizens on their willingness to cheat at a die-rolling game, researchers found that those who had East German (communist) roots were significantly more likely to cheat compared to those with West German (capitalist) roots. It was also shown that the longer the person had exposure to communism and its trade barriers (i.e., those who were at least 20 years old when the Berlin Wall fell in 1989 compared to those who were only 10 years old), the greater their likelihood to cheat.
These findings are supported by the work of the Mercatus Center’s Virgil Storr and Ginny Choi, who discovered a significant difference in attitudes between members of nonmarket and market societies: More than double the number of nonmarket residents versus market residents believe that avoiding fares on public transport, cheating on taxes, and bribery are justifiable. Those from nonmarket societies are also more accepting of theft compared to those from market societies (Figure 3).
Figure 3. Market versus nonmarket societies on dishonest behavior
Follow-up studies by other researchers have drawn similar conclusions about market societies and honest behavior. For example, a 2023 study surveyed residents in both market and nonmarket societies on their attitudes toward claiming government benefits to which they are not entitled, avoiding fares on public transport, and cheating on taxes. After controlling for a number of variables, they found that those with greater exposure to markets were less likely to justify these dishonest actions. What’s more, individuals who preferred markets (“market thinking”) were also less likely to justify dishonesty. The researchers concluded that there is “a universal association between markets and morality” and “a robust association between an increase in market exposure and an increase in civic morality.”
Even within communist countries, research shows that the more trade-oriented areas tend to be the least corrupt. A study in China Economic Review employed the National Economic Research Institute (NERI) Index of Marketization, which measures five major fields of Chinese marketization with 23 indicators. Examining different provinces in China, the authors’ analysis found that deregulation and trade reduce corruption: a 1 percent increase in the marketization index leads to a 2.72 percent reduction in corruption. Regions that increased trade openness by 1 percent experienced a 0.35 percent reduction in corruption.
Overall, the evidence overwhelmingly suggests that open economies stifle the spread of corruption and reinforce honest habits through reputation-building exchange. The removal of trade barriers allows for more commerce to take place and, consequently, more reputations to be a stake—a powerful incentive to keep honorable reputations intact. The most enduring way to achieve this is through genuinely honest conduct. A commercial society is, at its core, a society of integrity: it limits the opportunities for corruption and encourages honest behavior in the process. The norms of commerce—Smith’s “probity and punctuality”—settle in like a kind of glue, helping to bind society together.
What You Need to Know About Humans to Advance Human Progress
Neither nature nor nurture can be ignored.
Adam Omary —
Summary: Human progress depends on understanding human nature to some degree. Our blended capacities for cooperation, competition, empathy, and aggression cannot necessarily be ignored or overwritten by social engineering. Sustainable progress arises when institutions and innovations work with our evolved psychology rather than against it, channeling our instincts toward creativity, cooperation, and flourishing.
“Nature versus nurture” is a debate older than the field of psychology itself. Are we born with fixed traits, or are we shaped entirely by our upbringing? Of course, this is a false dichotomy. Both genes and environment shape most psychological traits. The real question is not nature versus nurture, but how much each contributes to different outcomes.
This question matters deeply for thinking about human progress. Any attempts at improving the human condition must be compatible with human nature, or they will risk creating more problems—such as the collapse of communist and socialist economies, for example—than they solve. And understanding human nature means grappling with our biological constraints and evolutionary history. Progress for squirrels might mean a world devoid of natural predators, where every tree grows acorns year-round. But human progress is a distinctly human concept.
As a psychologist, I am interested in the psychological foundations of human progress. To understand and sustain human progress, we must first understand the nature of the humans who are progressing. Strangely, the beings most capable of reflecting on our own values are also the most skilled at obfuscating them, as my graduate advisor, Harvard University psychologist Steven Pinker, has explored at length in his books The Blank Slate and Rationality. Many influential thinkers throughout history have questioned or outright denied the concept of human nature.
Superficially, that makes sense. Unlike some animals, which can walk and forage minutes after birth, human infants are born helpless and remain dependent on others for years. We are not born with language, and the languages we learn to speak depend entirely on the environment we were brought up in. As the English philosopher John Locke noted, all knowledge appears to come from experience, whether firsthand or taught by others. The human mind, at birth, is seemingly a true blank slate.
The blank-slate view was profoundly influential on the Enlightenment philosophy that set the stage for the miraculous forms of human progress in the coming centuries. If every baby starts out essentially the same, only advantaged or disadvantaged by their environment, then the case for equality becomes not just moral, but empirically necessary. It suggests that no one is born inherently superior, and that differences in status, intelligence, or virtue are all shaped by experience, not destiny. If all minds begin equally blank, then all individuals are capable of reason, learning, and democratic self-governance.
The idea that human nature was endlessly flexible fueled optimism, but it also began to cast blame on modern society. If we are all a product of our environments, then violence, poverty, and inequality were the results of a manipulated system. This philosophy was most famously embodied by the Enlightenment philosopher Jean-Jacques Rousseau, who believed that humans were born fundamentally good and were corrupted by society. In his view, the natural state of humanity was one of egalitarian peace, disrupted only by the emergence of social institutions that fostered competition and inequality.
The English philosopher Thomas Hobbes, in stark contrast, believed the default state of human life was solitary, poor, nasty, brutish, and short. For Hobbes, society constrained the worst of our innate impulses, and a strong legal system made crime more dangerous than cooperation. While Hobbes’s vision was often caricatured as bleak or authoritarian, modern psychology has increasingly validated his core insight. Humans are not born peaceful and rational, but possess a mix of impulses—some prosocial, others aggressive, impulsive, and self-serving. As the Canadian developmental psychologist Richard Tremblay has shown, the most aggressive humans are, in fact, toddlers. Although they cannot inflict real harm, most toddlers hit, steal, and lie as soon as they are capable. As all parents know, these innate antisocial behaviors must be patiently weaned out of children through healthy socialization and repeated instruction.
These two visions—Rousseau’s romanticism and Hobbes’s realism—have shaped centuries of thought about human nature and the role of institutions. One sees society as the source of our problems; the other sees it as the solution. Both, in their extremes, miss the full picture. We are born capable of both empathy and cruelty, cooperation and tribalism, innovation and superstition. Society both nurtures us and constrains us. Different aspects of different ideologies and institutions both facilitate and prevent human progress.
Institutions are not just abstract systems—they are extensions of human psychology. Their success or failure often hinges on how well they accommodate and channel our evolved tendencies. When institutions align with human nature, they can guide self-interest into cooperation, aggression into justice, and tribalism into civic identity. When they ignore it, they risk collapse, corruption, or unintended negative consequences.
Consider the market economy. At its best, it transforms individual ambition into mutual benefit. Entrepreneurs seek profit, but in doing so, they create goods, services, and jobs. This is not a triumph over human nature—it is a clever use of it. As the Scottish economist Adam Smith noted, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Contrast that with utopian communes that attempt to erase hierarchy, suppress competition, or eliminate private property. These experiments often fail because they ignore deep-seated human drives for status, autonomy, and reciprocity. When institutions deny these drives, they invite dysfunction.
Successful democracies are not built on the belief that humans are all born the same, but that our differences can complement each other, given sufficient freedom and equality before the law. Checks and balances, the rule of law, and free speech are not just moral principles, but safeguards against the psychological realities that humans are fallible, competitive, and prone to power-seeking. Progress is not achieved by transcending our psychology, but by building systems that align with our best impulses and constrain our worst.
Despite these self-evident truths, discussions of progress often neglect human nature in favor of nurture. Whether arguing for government intervention in the market, increased social welfare spending, or profound cultural change, advocates of such positions share a commitment to reshaping our environments. Yet even in identical environments, outcomes vary dramatically depending on psychological factors such as trust, optimism, gratitude, and self-control. These are not variables that can be socially engineered. Instead, they are traits that arise from genetic inheritance, individual beliefs, decisions, and cultivation of habits.
Even in this almost miraculous age of superabundance—characterized by unprecedented material wealth, a high degree of freedom, and technological sophistication—many people feel lost, cynical, and devoid of purpose. To improve people’s psychological outlook, a deep understanding of human nature is necessary. That consists of considering not only our environments but also human nature itself. Without that understanding, progress can lead to unintended, sometimes negative, consequences. Material abundance can breed obesity and lethargy; excess freedom can lead to decision paralysis; technological progress can erode attention spans and lead to addiction. History shows that we are not blank slates who can be remolded into something we are not.
My role at Human Progress will be to not just examine the psychological aspects of progress—mental health, optimism, rationality, cooperation, creativity, and productivity—but to understand how progress interfaces with human nature and leads to human flourishing. In the words of the American economist Thomas Sowell, there are no solutions, only trade-offs. Progress is a negotiation between our aspirations and our nature—between what we were built to be and what we hope to become. The most enduring advances come not from denying our instincts, but from designing systems that guide them toward constructive ends.
In Trade We Trust: How Markets Build Social Fabric
Far from eroding community bonds, markets weave broader networks of trust.
Walker Wright —
Summary: Many worry that markets, while efficient, corrode social trust and weaken community bonds. The evidence suggests the opposite: trade depends on trust, and commercial societies encourage people to extend trust beyond family and friends to strangers and colleagues. Experiments and cross-country studies show that economic freedom fosters cooperation, honesty, and reciprocity.
In my previous piece, I argued that a trade society generates prosperity, a widespread abundance of capital. But that raises another question: Does commercial exchange also lead to an abundance of social capital? While many may accept the economic efficiency of a market economy, they may see the trade-off as the fracturing of our social fabric and the deterioration of social capital.
But trade requires trusting attitudes and trustworthy behaviors to function properly, making a commercial society equivalent to a trust-based society. The American economist Ryan Murphy of the Bridwell Institute has distinguished between what he calls bonding social capital and bridging social capital. Bonding social capital refers to what increases the bond of affection with those in our inner circle, such as our family and friends. Bridging social capital refers to what builds social bridges, expanding our social network to those outside our inner circle. Too much bonding can interfere with bridge-building and can even burn bridges, creating a host of problems such as corruption and hostility toward out-groups. Trade acts as a social bridge. And a trade society is one full of social bridges.
Research from the Mercatus Center’s Virgil Henry Storr and Ginny Choi demonstrates the bridge-building capacities of market economies. They found that people in both market and nonmarket societies trust close family and neighbors. However, as social distance increases—from family and friends to neighbors or strangers—trust decreases. And yet, this decline in trust is slower in market societies. Compared with those in nonmarket societies, people in market societies are more likely to (at least somewhat) trust friends, colleagues, and even strangers. As Choi and Storr concluded, “People around the world seem to have equally strong core networks, but those living in market societies seem to have stronger periphery networks.”
Figure 1. Market versus nonmarket societies on trust
Other survey data support Storr and Choi’s findings and suggest that commercial societies produce trust. Utilizing data from the Economic Freedom of the World (EFW) index and the World Values Survey, researchers ran cross-country regressions with over 50 countries for the years 1995 and 2000. They found that economic freedom plays a significant and possibly causal role in the development of trust within countries. Even after controlling for variables such as urban population, age, human capital, government share of gross domestic product, political institutions, and inequality, countries with higher levels of economic freedom have been shown to have higher generalized trust than less free countries. But these trust levels are not fixed! Countries that experience pro-market reforms also see improvements in trust.
Drawing on European survey data and the EFW index, Mercer University economist Antonio Saravia looked at the effects of economic freedom on generalized trust for the years 1980, 1985, 1990, and 1995. After implementing several controls, Saravia found that a 10 percent increase in economic freedom led to a 2.5 percent increase in generalized trust.
Figure 2. Economic freedom and generalized trust across countries
The evidence appears to indicate that market-based economic institutions have a positive effect on trust. However, one of the criticisms of the trust literature is that survey data and real-world behavior do not always match up. Contrary to expectations, people tend to be more trusting and trustworthy in experiments than survey answers, and laboratory experiments can give us a better sense of how economic institutions shape the trust-based behaviors of individuals.
The results of various laboratory experiments by Storr and Choi are telling. In studies published between 2018 and 2022, the two researchers demonstrate that in markets where cheating is possible, participants learn to reward trustworthy partners with greater trust and reciprocity (measured through token transfers). Those with positive market interactions received significantly more tokens than cheaters. What’s more, even strangers received more tokens than cheaters. In experiments where cheating was prevented or its effect neutralized, positive relationships were treated similarly to relationships between strangers. Storr and Choi stressed that participants knew nothing about each other and could not communicate beyond offers. That means the relationships were purely commercial, with no distortions stemming from race, sex, religion, or the like. In short, when corruption and dishonesty are absent from the marketplace, trust and equal treatment emerge. When dishonesty is a factor (as it is in the real world), trustworthiness is incentivized, and dishonesty is stigmatized. Positive market transactions breed trust and trustworthiness.
Using similar trust games as the one featured in Storr and Choi’s study, other laboratory experiments primed random participants to unconsciously think about markets. The results indicate that a market mindset makes people more trusting of others. George Mason University economist Omar Al-Ubaydli and colleagues explain their findings:
Priming markets leaves people more optimistic about the trustworthiness of anonymous strangers and therefore increases trusting decisions and, in turn, social efficiency. . . . Absent markets, economic interactions with strangers tend to be negative. Market proliferation allows good things to happen when interacting with strangers, thus encouraging optimism and leading to more trusting behaviors. Participation in markets, rather than making people suspicious, makes people more likely to trust anonymous strangers. Our results seem therefore to corroborate the idea of doux commerce. [Italics in original.]
Another pair of economists selected internet business professionals from two cutthroat industries: domain trading and online adult entertainment. Multiple laboratory games between these internet professionals and Berkeley students yielded surprising results: The business professionals were more trustworthy, trusting, generous, and honest. As the study’s authors put it, “Internet business people were, on the whole, ‘nicer’ than students.” An earlier study performed similar experiments with company CEOs and students. Although CEOs are often caricatured as being greedy Gordon Gekko clones, they ended up being both more trusting and more trustworthy than students in the experiments.
The fact that the commercial society exists should be awe-inspiring. The absolute scale of trust and cooperation is incredible. But markets aren’t magical. They are spaces in which people engage in repeated trade, where individuals learn to consistently rely on and cooperate with each other. As people demonstrate a pattern of trustworthy behavior, exchange becomes more fluid, and trust becomes more concrete. Long-term success in the market depends partly on developing strong bonds of trust. And this practical necessity for economic success can eventually develop into a personal virtue.
