The Public Good

There exists a game by which the famed economist Paul Samuelson, with support from fellow economist Amartya Sen, contends that the self-interested economic man is revealed to be a rational fool. The game here is one in which eight participants individually enter a room with five one-dollar bills — that is, each individual holds in his or her possession five one-dollar bills. 

Let us suspend for a moment, and in doing so indulge the position of imprudent economists, any curiosity regarding the source of these five-dollar windfalls to conveniently afford the game the convenient assumption that some form of recognized labor, or sacrifice, enabled their acquisition and their utility as money.

The participants are then informed that their anonymous donations to the envelope of “public good” will be doubled then distributed evenly amongst the participants. 

The prediction in this game, as forecasted by the aforementioned economists, is that the individual, facing an 80% loss on his individual dollar contribution if no other participant joins him, will merely forego the donation. In total, the principal prediction is that nobody will contribute. 

Despite this forecast’s accuracy with any given test group, this experiment hardly bears any semblance to the way in which the “public good” is carried out in practice, let alone the way in which the purchasing power of money is created and multiplied. 

This game grossly overstates the value of the so-called “public good” by simply assuming that the headline objective is sufficient grounds for it to be so. Is it at all possible that the alternative investment, or the deferred investment in the form of present savings, may eventually further the “public good” by market transactions not explicitly carrying the “public good” title? 

This game falls devastatingly short in explaining the means by which the investment would multiply, let alone the way by which money empowers interests and actively incentivizes and orchestates the mechanics of the market, by which individuals coordinate directly and indirectly in the fulfillment of their own respective agendas, the total expression of which forms the only up-to-date and accurate expression of the so-called “public good.” 

If nothing else, the outcomes derived from this game highlight the propensity of human beings to be attitudinally risk-averse with their money. Ultimately, this game promises an infinite multiplication of monetary value if only the participants will overcome the statistical biases which impede the realization of their advanced collective good. 

If this were self-evidently the case that the “public good” here were so calculated and tested an investment, how might privatization of this good sterilize its fruits? Might this game then evolve to permit self-interested and privy investors to buy a real stake in this supposed gold mine? As it turns out, players in this game demonstrate a decreased willingness to contribute as they repeat the game, dropping from the usual 50% to near zero. 

One crucial spin, however, on the same experiment weighs considerably on the direction of outcomes. After ten rounds of play, the subjects are informed that they will participate again for another ten rounds with the same cast of players. 

With a more sophisticated understanding of the game and with a more intense sensitivity to the ramifications of their individual actions and their attending influences on the group, the individuals became more willing to contribute. 

These individuals essentially become what is known as conditional cooperators, actors who are willing to cooperate if a critical mass of others have already committed. 

Short of demonstrating the folly of human action, this experiment brilliantly exposes a gaping hole in the precepts of socialist, communist or generally statist leanings: governance is most powerful, responsive and cooperative at the most local level.