Reciprocal Altruism in the Theory of Money

Essay on the concept of ‘reciprocal altruism’ in biology being applied to money.

Reciprocal altruism is the biological explanation of why people cooperate. Essentially we help people so that we may receive help when we need it. The term was coined by Robert Axelrod in The Evolution of Cooperation which explains that people cooperate with those who will reciprocate the help (It is more detailed and based on game theory, read it if you are interested).

The essay discusses the differences between economics and biology and how money can be explained as a means to measure the potential for altruism by the holder of the money.

Interestingly, it explains why simple concepts like money are more powerful than ideologies (including religions) because applying a value to money is the only belief necessary for money to function. Ideologies aim at creating benefit to its adherents and are often anti-money because money creates loyalty beyond the ideological sub-group. This makes money as a mechanism to cooperate with the broader society very powerful.

Whilst I agree with the underlying point above, I think it overplays the altruistic nature of wealth accumulation. Many fortunes are inherited and the subsequent generations get piles of money without having done anything to earn it other than sharing the genes of the original wealth generator (which actually fits into the nepotistic tendencies as explained by Dawkin’s Selfish Gene hypothesis). There is also some truth to the saying ‘behind every great fortune is a great crime’. That said, it was still a great read.