A great number of theories have been offered as to the root of the difference between modern and premodern mentalities. One neglected account comes from Georg Simmel’s The Philosophy of Money, which argues that the rise of the mass money economy in the early modern era encouraged calculative modes of thought, and took over the coordinating functions of a number of previously important institutions such as kin and religious networks, thus “freeing” the latter to evolve without strong material feedback. This paper considers monetary exchange and kin/religious networks as alternative strategies for coordinating the division of labor, and shows how the widespread availability of the former can alter the cultural-evolutionary constraints on the latter. This dynamic explains a number of salient differences between modern and premodern moral life such as money’s profaning character, as well as the sociological significance of modern moral phenomena like individualism, rationalism, and fundamentalism.
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The personalistic societies of the following section, for example, do not necessarily correspond to paleolithic societies, which likely varied widely in scale, complexity (Singh & Glowacki 2022), and the potential for ad hoc large-scale cooperation (Boyd & Richerson 2022). Nevertheless, any stage of supra-personalistic social complexity presumably follows a period of lower complexity at some point in the past, implying a solution of the problems raised in this paper. Regress, of course, is also possible following the loss of a coordinating technology (e.g., Harwick 2018).
Examples of rational reconstructions of social phenomena that self-consciously do not follow historical development include Menger (1892), Buchanan and Tullock (1962), Rawls (1971). There is of course the opposite danger of historical overfitting; a “just-so story”. Rooting the elements of our story as firmly as possible in orthodox economic theory will be important to guard against this danger.
The division of labor between cells within a multicellular body is also governed by phenotypic divisions between cell types, with considerably more complexity than between organism types of a species: Kaufmann (1993: 461) estimates the human body has up to 300 distinct cell types, with more types requiring exponentially longer genomes.
For more on why parables of goods-exchange emerging out of anarchy do not work, see Harwick (2023a).
Harwick (2020) defines the Incentive Gap as “the impossibility in broad classes of social dilemmas of eliminating the incentive to defect among some subset of agents, whose defection would eventually lead to the total unraveling of cooperation.”
Evolutionary stability is a closely related refinement of Nash equilibrium where strategies are selected at the population level through differential reproduction, rather than by individuals through rational choice. While evolutionary stability is usually thought of as a narrower concept than Nash equilibrium (e.g., it will exclude “knife-edge” equilibria that are not robust to random noise), selection between groups can generate evolutionarily stable strategies which are not Nash equilibria for the individuals in those groups. See Okasha (2006) for a detailed defense of the meaningfulness of “"selection between groups” and the conditions under which it would apply.
Because at this point we are interested in the evolution of basic cultural capacity rather than the evolution of specific cultural forms, several of Henrich & Muthukrishna’s proposed avenues of intergroup competition – prestige-based copying and differential migration – are not applicable, and may even hinder the evolution of basic cultural capacity to the extent they reduce genetic assortativity. Differential survival and differential reproduction of groups, however – even without direct conflict – will suffice.
The importance of metering benefits in the heuristics used to build up social exchange strategies is emphasized by Cosmides et al. (2010) in both dyadic and n-person exchange.
This can operationalize the complementarity between social ties and production in Kerr and Mandorff’s (2021) model of ethnic specialization.
Greif (2006) notes that as it becomes more difficult for groups to exclude nonmembers from the use of their visible markers, the effectiveness of inter-group trade and specialization declines, which can either lead to a breakdown of exchange, or the development of centralized enforcement institutions and territorial law.
Interestingly, a reorganization of sartorial laws was a key piece of Sultan Mahmud II’s attempted rebalancing of Ottoman interest groups in 1829, particularly the establishment of distinctive dress for the administrative class (Quataert 1997).
Why the Reformation succeeded where previous aniconic movements had failed, will be suggested in the following sections.
Simmel (1907: 249) does discuss disordered attitudes to money as an end in itself, namely the miser (who values the holding of money for its own sake) and the spendthrift (who values the spending of money for its own sake), but these are marginal cases.
Interestingly, the prior use of money by mercantile classes does seem to have taken place mostly in settings where overarching inter-group enforcement mechanisms had evolved. See e.g., Milgrom et al (1990) on the medieval Law Merchant.
This cannot, of course, be taken for granted, as the previous section shows. Nevertheless, the origin of this kind of enforcement (on which see Harwick and Root 2020) is outside the scope of this paper: here we are more interested in its effects than its causes.
Particularly severe information asymmetries may still make a division of labor along group lines efficient even today, especially where state enforcement is unwieldy, unreliable, or unwanted (e.g., Richman 2006). It should be noted however that one vital function of money is to eliminate information asymmetries on at least one side of the transaction (Alchian 1977).
Though not on everyone, particularly in the enforcing group, which must still organize collective action for enforcement of property claims upon subsidiary groups.
To the extent that moralizing religions (as opposed to the pure costly signal rituals of Section 1) are an expression of rationalization in the Simmel/Weber sense, Baumard et al. (2015) suggests that economic affluence (corresponding to monetization) is the direct causal factor as opposed to political complexity or state capacity. The present paper fills in “the proximate mechanisms by which affluence leads to the emergence of new kinds of religions.”
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Harwick, C. Money’s mutation of the modern moral mind: The Simmel hypothesis and the cultural evolution of WEIRDness. J Evol Econ (2023). https://doi.org/10.1007/s00191-023-00844-4