Can progress be attributed to exchange and specialization?

'Somewhere in Africa more than 100,000 years ago, a phenomenon new to the planet was born. A Species began to add to its habits, generation by generation, without (much) changing its genes. What made this possible was exchange, the swapping of things and services between individuals. That gave the Species an external, collective intelligence far greater than anything it could hold in its admittedly capricious brain. Two individuals could each have two tools or two ideas while each knowing how to make only one. ... In this way, exchange encouraged specialization, which further increased the number of different habits the Species could have, while shrinking the number of things that each individual knew how to make. Consumption could grow more diversified, while production grew more specialized' (Matt Ridley, ‘The Rational Optimist’, 2010: 350).

Ridley’s bold claim is that human progress can be explained mainly in terms of exchange and specialization. Eric Jones, a scholar who has written extensively on the history of human progress, considers that Ridley makes the case very well, based ‘on the few knowns of early pre-history’. Jones also considers that Ridley gets the story of the industrial revolution ‘mostly right’ (Review in ‘Policy’, Spring 2010, 26 (3)).

The weight that we can place on exchange and specialization as explanators of human progress depends importantly on the extent to which advance of knowledge and innovation can be attributed to exchange and specialization. It is possible to go some distance in explaining technological progress as a consequence of specialization. As Bill Easterly points out in his NYT review, however, many breakthroughs come from creative outsiders who combine technologies generated by different specialties.

Ridley mentions that government actions of various kinds in different countries have often inhibited innovation, particularly the introduction of new products and new ways of doing things that threaten the survival of established patterns of production. The implication is that freedom is a necessary condition for progress comes through clearly in Ridley’s recent contribution to Cato Unbound:

‘I am saying that there have always been liberals, who want to be free to trade in ideas as well as things, and there have always been predators, who want to extract rents by force if necessary. The grand theme of history is how the crushing dominance of the latter has repeatedly stifled the former. As Joel Mokyr puts it: “Prosperity and success led to the emergence of predators and parasites in various forms and guises who eventually slaughtered the geese that laid the golden eggs”. The wonder of the last 200 years is not the outbreak of liberalism, but the fact that it has so far fought off the rent-seeking predators by the skin of its teeth: the continuing triumph of the Bourgeoisie’ (p. 252).

I can’t help thinking that this sounds more like rational pessimism than rational optimism. According to Ridley, the industrial revolution is largely a story about coal - and progress since then has been possible mainly because of abundant cheap energy from fossil fuels. He notes that his optimism wobbles when he looks at the politics of carbon emissions reduction and the potential this has to load economies with further rules, restrictions, subsidies, distortions and corruption (p. 347).

Cartoon by Nicholson from "The Australian" newspaper: http://www.nicholsoncartoons.com.au/

The optimistic note on which Ridley ends his book comes from his view that innovation is such an evolutionary, bottom-up phenomenon that it will continue as long as exchange and specialization are allowed to thrive somewhere in the world.

In the end, it would seem that the gains from innovation, exchange and specialization all depend on liberty – liberty is the key to human progress.

Once a neurotic always a neurotic?

Martin Seligman’s view that authentic happiness comes from using your character strengths makes sense to me. For example, it seems reasonable to expect that activities that would bring lasting happiness to a person whose strengths are curiosity, love of learning and zest would differ from those that would bring lasting happiness to one whose strengths are kindness, fairness and a forgiving nature, or to one whose strengths are judgement, perseverance and leadership. (In his book ‘Authentic Happiness’, Seligman identifies 24 strengths under the general headings: wisdom and knowledge, courage, humanity and love, justice, temperance and transcendence.)

This idea of playing to signature strengths also appeals to the economist in me because it involves specialization on the basis of comparative advantage. Thinking in those terms, specialization doesn’t necessarily enable a person with little education or poor health to achieve a high real income – merely a higher real income than he or she would be able to obtain by attempting to be a jack of all trades. Similarly, a neurotic person – one who has an enduring tendency to experience negative emotions – may not have a life full of joy even if he or she plays to character strengths and focuses activities that do not necessarily require a sunny disposition.

Seligman recognizes that some people whose inherited characteristics make them low in positive affectivity are less likely to be happy. His recommendation for such people is that they should learn to exercise greater control over their emotions by using techniques such as recognizing and disputing negative thoughts.

Do people who successfully follow such advice become less neurotic? From what I have read, the standard answer given by psychologists is ‘no’. For example, Daniel Nettle tells us:

‘High neuroticism scorers will always be vulnerable to negative thoughts and feelings. That they cannot change. However, there are techniques in which they can train themselves that seem to have quite a marked effect on how they deal with this vulnerability, which can make a great deal of difference to their being in the world' (‘Happiness’, 2005: 113).

Timothy Pychyl has a relevant post on the ‘Psychology Today’ blog in which he notes that some leaders in the field of positive psychology have outed themselves as neurotics. (When I did an online test I discovered that I also have a tendency to be somewhat neurotic – but that would probably be only too obvious to readers this blog as well as to everyone else who knows me.) Pychyl suggests that while neurotics can learn to act out of character they can’t change their personalities.

Survey data suggests that personality traits for the vast majority of people tend to remain stable after age 30. End of story? Well, not quite. Such studies also indicate that a small proportion of individuals undergo significant changes in personality (see: Terracciano, Costa and Mc Crae, ‘Personality plasticity after age 30’, 2006).

There is some recent evidence of personality change during treatment for depression both using drugs (Paxil) and cognitive behavioural therapy (CBT). The results of one study, led by Tony Tang, suggest that both the drug therapy and CBT outperformed a placebo and had similar effects in changing neuroticism and extraversion scores.

There has also been some research relating to changes in the brain that might be produced by meditation. A study led by Richard Davidson, which examined changes in brain electrical activity following an eight-week training program in mindfulness meditation, found that the program resulted in significantly larger increases in electrical activity in areas of the brain associated with emotional regulation (‘Well-being and affective style’, 2004). A more recent paper by Davidson includes the following remarks:

‘Mindfulness training can be hypothesized to change an individual’s relationship to his or her emotions so that they are not viewed as fundamental constituents of self, but rather as more fleeting phenomena that appear to the self. We would not necessarily expect mindfulness training to alter the neural circuitry of emotional responding in response to a challenge per se, but rather we might expect a change in the connectivity between emotion circuits and those used for the representation of self. We would predict decreased connectivity between emotion processing and self-relevant processing regions’ (‘Commentary: Empirical explorations of mindfulness’, 2010).

I don’t claim to know a great deal about neuroticism or meditation (apart from my own limited experience) but if meditation helps people to be calm and composed, and less likely to panic, or feel threatened, stressed out, frustrated, or bothered in the face of challenges, then I would have thought that would probably be reflected in lower neuroticism according to standard measures used by psychologists.

Finally, as an economist, it seems to me that revealed preferences are worth considering. As I have discussed previously, the self-help industry seems successful according to the usual market tests. When people engage in meditation or other forms of contemplation instead of sleeping longer or indulging in more immediately pleasurable activities, this suggests to me that they may actually obtain some of the benefits that they claim in terms of desired changes in personality traits.

Postscript
There is an update of this post entitled: How much does personality change over time?

Does one form of sensation-seeking substitute for another?

In the last post Ruth, a mental health nurse, discussed how she had been more willing to participate in risky activities such as bungy jumping while she was working in prisons. This led to a discussion of changes in perception of identity that may be associated with drug taking by young people who are seeking to escape from emotional pain. Ruth discussed how mental health patients with a history of drug use could be helped to perceive a wider set of possibilities for their future lives.


This post explores implications of evidence that some adolescents take drugs as a form of sensation seeking. A literature review by Jonathan Roberti notes that sensation seeking individuals tend to engage in behaviours that increase the amount of stimulation they experience. Sensation seeking is more common among young males than other groups. While risk-taking is involved it is not a primary motive – high sensation seekers tend to appraise risky and stressful situations as less threatening than do low sensation seekers.

Sensation-seeking is associated with stimulating occupational choices e.g. a desire for greater novelty and flexibility in work and with choice of risky vocations such as fire fighting. It is also associated with a preference for arousing music e.g. hard rock; travel to less familiar places; participation in relatively risky sports e.g. bungy jumping, white water rafting, surfing, snow boarding, scuba diving and parachute jumping; gambling; crime; impulsive behaviour; and health risk behaviours e.g. unsafe sex, unsafe driving, binge drinking and use of illicit drugs (‘A review of behavioral and biological correlates of sensation seeking’, Journal of Research in Personality, 38, 2004).

Roberti has high hopes that adverse consequences of sensation seeking traits could be reduced by substituting sensations with low health risks for sensations with high health risks:

‘Early identification of risky behaviors, attitudes, and preferences in young adults, such as engaging in promiscuous sexual activities, reckless drinking habits, use of illicit drugs, gambling, and high-risk sports and replacing those with non-risky options is essential in reducing negative health consequences. Recommending appealing, non-risky forms of sensation seeking to individuals that once engaged in risky behaviors is one way of reducing negative health consequences. The effectiveness of using alternative arousal sources that are non-risky but are equally stimulating has yet to be determined and would be a fruitful line of research’ (p 274).

When I consider this from an economics perspective, it is not entirely clear whether, or to what extent, sensation seekers would view such activities as substitutes. It would be nice to think that an afternoon engaging in an extreme sport would satisfy a sensation seeker’s desire for thrills until the following week - and that the culture associated with all extreme sports would tend to encourage healthy living. It might be possible, however, for a sensation seeker to spend an afternoon engaging in an extreme sport, followed by an evening of illicit drug use and gambling, and then to end the day participating in a sex orgy (although I can’t verify this from personal experience). More research may be required. (Perhaps I should clarify that I am suggesting surveys of the lifestyles of people who engage in various extreme sports.)

Jonathan Roberti draws attention to research suggesting that sensation seekers prefer certain types of friends and tend to surround themselves with others who have similar sensation seeking characteristics. I expect that the behaviour of sensation seekers in this respect would be strongly influenced by their own sense of identity.

How can parents ensure that children with sensation seeking tendencies develop a sense of identity consistent with adopting healthy lifestyles? My previous consideration of this question suggests that the main environmental shaper of personality is a child’s peer group. Parents may not be able to choose their children’s friends for them, but parents do make decisions about where they live and what schools their children attend.

Postscript:
There seems to be increasing evidence linking cannabis use among young people to mental illness. Some recent research is reported here. That suggests that it is stupid for young people to use cannabis. However, that does not provide sufficient reason for cannabis use to be illegal.

How can we explain the attitudes of young drug users towards the risks involved?

This post is the sixth in a series of discussions with Ruth, a mental health nurse who has worked with drug users in prisons and hospitals. There is a brief summary of earlier post in the series, on my other blog.


Ruth began the discussion by considering whether her own history might help us understand why kids engage in risky behaviour:

When I worked in the prison system, I participated in activities such as bungy jumping and solo trekking through the Himalayas and so on. These are risky activities. They differ from drug taking because they are socially acceptable. But they are similar because they involve a risk of being injured or killed. I saw myself as capable in extreme situations. It felt good!

My attitude toward risk-taking has changed since I stopped working in the prisons. I now experience greater fear of heights and tend to allow that fear to dictate my actions. For example, I was walking down some steps – the open variety – descending about 100 metres underground last year. I was terrified, simply of the height, as I looked down to see where to put my foot next. Vertigo had got me – and not for the first time in my life. Yet, only a few years prior, I had bungy jumped off the side of a swing bridge over a river.

The only difference I can point to is that I am now engaged in less risky activities on a daily basis. I experienced great fear on both occasions, but it seems to me that I was accustomed to taking risks back then. Now I am out of practice, so to speak.

This makes me wonder if young drug users see drug-taking as a measured risk - just as the risk of trekking solo through the Himalayas or bungy jumping or so many other things I did, mirrored the risks I took working in the prison. A lot of drug users may consider that the risks involved are not out of the ordinary, relative to the risks that are part of their daily lives. This might explain why so many argue that drug use is quite safe.

I expect that many could relate some of what Ruth has been saying to their own experience. I know that when I took on new roles at work that required me to get out of my comfort zone, this also affected other aspects of my life. If we think in terms of identity economics, a change of role may be associated with a change of perceived identity, which in turn has implications for the satisfaction we obtain from different kinds of behaviour and the choices we make.

Tammy Anderson, a sociologist, has developed a cultural-identity theory of drug abuse which suggests that drug abuse is the outcome of an identity change process. The process may involve a range of factors relating to personal circumstances, identification with sub-cultures and economic opportunity. For example, at a personal level some kids may feel out of place and different from others, or a loss of control in defining their own identity because of unrealistic parental expectations. This may lead them to identify with alternative social groups i.e. a drug sub-culture. In turn, this provides a new identity, with acceptance by a peer group and associated economic opportunities to fund drug use. (‘A cultural identity theory of drug abuse’, here)

In my view, while such a cultural-identity perspective makes sense, it would be desirable for it to be embedded into an identity economics framework in order to recognize the role of individual choice in these personal changes.

Ruth comments:

My experiences mostly centre around drug takers after their habit has become a noticeable problem. Although I know less about the introductory phase of drug taking or experimentation, I have worked with many teens (mostly girls but some boys too) who have lived through sequential painful experiences and have given up on the idea of living free of ongoing emotional pain. Young people in these situations may welcome any mind numbing activity just to escape the hurtful lives they live. This is not about immaturity or lack of worldliness or some other non-reality oriented scenario. I'm referring to situations where there are real reasons for the emotional pain they feel. Many are still too young to leave home and are therefore doomed to continue living in circumstances that are painful to them until they come of age.

The young people I've had most regular contact with have long dispensed with the idea that they can change themselves, or their life circumstances. They have usually had limited exposure to the idea that they can consciously create a life for themselves and much less exposure to ideas about how they might do such a thing. In their own eyes their identity is defined and absolutely limited to what they are now and has been determined indisputably and irrevocably by the circumstances of their birth and upbringing.

From the therapy side, I see these self-perceptions as an excuse to avoid dealing with what the individuals see as an unchangeable future. As these limiting perceptions change then they see that they have greater potential to change their lives than they realized. It would be helpful if the community as a whole could adopt a similar approach to these people.

I found that talking to these patients about travel adventures like trekking the Himalayas and Swiss Alps and so on can make a difference to their long term projections for their own lives. The potential to have that kind of adventure can be enough for them to think it is worth getting through their ordeal. They often turn off drugs as a direct result - not always, but often. What is happens is that their confidence builds in a natural way. I could point out how 'ordinary' I was, much like themselves, and how I went about achieving my goals – the usual methods of planning, practicing and reading relevant material and talking to others who had done similar things. This led the patients to see a whole new set of possibilities - which in turn opened options and gave them confidence to act differently, and with choice.

Confidence and choice are at the heart of every behavioural decision. I suspect identity building is limited by an assumption of 'who I am' in the world around me.

The discussion continues here.