Monday, July 23, 2012

Kids Prefer Euvoluntary Exchange

I've long held a suspicion that many moral intuitions are holdovers from childhood lessons. Fairy tales are moral nilla wafers, intended for minds too feeble to grasp narrative subtlety. "Adult supervision" usually means reigning in kids' natural reaction to situations, ranging from "golly, I wonder what that fork tastes like after I jam it into that power outlet" to "hey, that kid has a toy I want and all I have to do it punch him and take it." Children's sports and games reflect cultural norms, at least in the meta-rules they convey (note that soccer is popular on the continent and in Latin America, hockey in Canada, football in the US, cricket and rugby in the commonwealth).

Early education is an exercise in indoctrination. I attended a series of public schools, several of them on military bases. School prayer was a thing of the past on the West Coast by the time the 1980s rolled around (and it was being phased out in the heavily Catholic New England schools I attended), but there were a few ceaseless lessons that followed me from state to state, county to county, district to district. Foremost was nationalism: American exceptionalism was an easy graft atop flag totemization. Order and discipline was close behind: fail to obtain the permission of the authorities to void your bowels at your own peril. A quieter lesson, one that sort of waits in the wings after being planted early on is the sharing heuristic.

Sharing is a staple of preschools and kindergartens and its adult counterpart is taxation and transfer. I'd be extremely curious to see what sort of society might emerge if instead of encouraging kids to share, they'd be encouraged to trade. To engage in euvoluntary exchanges, if you like.

As a researcher, this is the one experiment I would dearly love to run. The treatment is that a randomly assigned group of children would be raised to trade toys, while the control group would be raised using the status quo dedication to sharing. The null hypothesis is that, as adults, the two groups would favor peaceful exchange equally, with the alternative hypothesis that the trading group would be more amicable towards capitalistic exchange than the control.

For obvious reasons, this experiment is impossible to run. I can raise my own daughter to value trading over coercive sharing, but she's burdened by my genetic legacy. I could adopt children and apply the treatment, but I'd be prone to applying other confounding treatments, so that's kind of a non-starter, as well as being vulnerable to some awkward selection bias and small sample size problems.

There are a number of interesting ancillary questions that could be addressed using a good longitudinal study like this. One issue that sort of plagues me (I don't know if it bothers my co-bloggers that much) is one of boundaries. My previous post on the Boudreaux-Kling CFPB debate noted that we have a boundary problem on the shady end of the trade spectrum: there's no bright-line rule that defines the cross-over from simply questionable transactions from fraud. Similarly, there's some squish room in the boundary between euvoluntary exchange and voluntary exchange that is a little bit less (unequal BATNA is the norm rather than the exception, but the degree where it becomes "unfair" is personal and subjective). If we had a group of people raised to appreciate peaceful exchange, would they be more or less willing to support price gouging laws? Would they be quicker or slower to accept consumer sovereignty as a go-to rule? Would they want to shut down payday lenders? More generally, would they be more willing to classify borderline exchanges as euvoluntary as opposed to merely voluntary?

At any rate, as a practical matter, I can't see how it would hurt to raise my own kids to appreciate the importance of trade as a creative vehicle. I would encourage anyone reading this to do the same. At its worst, trade makes one party better off and the other indifferent. Sharing can potentially make one of the parties worse off. If nothing else, in the short run, trading might help prevent jealousy and strife.

It occurs to me that lessons on the components of EE and the ultimate lesson that exchange is mutually beneficial is something suitable for kids. I think I'd like to follow up on this. Maybe I'll write some economics for kids (perhaps even spelling it "kidz" and inverting the z) tracts or something. I might also look around for a natural experiment that mimics what I'm trying to get at with the designed stuff above.

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Do you have suggestions on where we could find more examples of this phenomenon?