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Cultural Intelligence

ARNOLD KLING

Socialists and progressives who seek to remake society have typically claimed that their efforts have a scientific basis. Frequently, they accuse their conservative opponents of being anti-science. They dismiss the warnings of Burke, Hayek, and other conservative intellectuals who doubted the ability of the individual scientist-reformer to fully comprehend the social order he proposes to overthrow.

Ironically, there is a growing body of academic research that supports the conservative view of the social process. Thanks to work in a number of related fields, collected in some exceptionally important books published in just the past few years, it is becoming increasingly apparent that progress tends to arise from the evolution of decentralized trial-and-error processes more than from grand schemes launched by planners and revolutionaries.

Economists and scholars of public policy are not the only ones conducting this research; students of human behavior are also finding support for Burke and Hayek's theses — that the knowledge embedded in social norms and practices is vast compared to the knowledge of even the brightest, most educated individuals. As individuals, we cannot figure out very much by ourselves, but we learn a remarkable amount from others. In short, some social scientists in recent years have been building (or rebuilding) a powerful case for cultural intelligence.

One implication of their findings and arguments is that two sets of institutions in particular — markets and traditional social and familial practices — are the most important products of the process of social evolution building on cultural intelligence because they are the foremost means by which that process operates in free societies. It should hardly surprise us, therefore, that these two sets of institutions are also the foremost targets and objects of scorn of today's progressive planners.

This suggests that we should be concerned about the ideas that are being transmitted by the dominant institutions in the United States — the media, higher education, and the teaching profession. These institutions tend to impose strong conformity to the progressive narrative, which treats our culture as creating large classes of victims and views expert social engineering as the right approach for solving problems. If our leading cultural institutions are thus geared toward suppressing cultural intelligence, we need to think about how to change them.

That effort could begin by taking account of several recent books — all published in this decade and intended more or less for a general audience beyond the narrow confines of the academy — that offer a multifaceted case for thinking anew about how societies make progress. Our progressives should pay them some attention.

ECOLOGISTS AND ENGINEERS

Understanding cultural intelligence first requires a better understanding of culture itself, and recent studies have yielded some important discoveries. Joseph Henrich, an anthropologist, summarized this research in a recent book, The Secret of Our Success: How Culture Is Driving Human Evolution, Domesticating Our Species, and Making Us Smarter. He writes:

The key to understanding how humans evolved and why we are so different from other animals is to recognize that we are a cultural species. Probably over a million years ago, members of our evolutionary lineage began learning from each other in such a way that culture became cumulative....[K]nowledge began to improve and aggregate — by learning from others — so that one generation could build on and hone the skills and know-how gleaned from the previous generation. After several generations, this process produced a sufficiently large and complex toolkit of practices and techniques that individuals, relying only on their own ingenuity and personal experience, could not get anywhere close to figuring out over their lifetime.

Culture, in this sense, allows us to make use of much more knowledge than what we possess as individuals, indeed more than any one person could ever really hope to possess. It does this not just by serving as a kind of library — a repository of facts and figures and recipes — but by functioning as something like a common brain for countless people. Henrich continues:

The secret of our species' success resides not in the power of our individual minds, but in the collective brains of our communities. Our collective brains arise from the synthesis of our cultural and social natures — from the fact that we readily learn from others (are cultural) and can, with the right norms, live in large and widely interconnected groups (are social). The striking technologies that characterize our species, from the kayaks and compound bows used by hunter-gatherers to the antibiotics and airplanes of the modern world, emerge not from singular geniuses but from the flow and recombination of ideas, practices, lucky errors, and chance insights among interconnected minds and across generations....[I]nnovation in our species depends more on our sociality than on our intellect, and the challenge has always been how to prevent communities from fragmenting and social networks from dissolving.

Henrich points out many ways in which humans have evolved to transmit and receive information from one another. We have an aptitude for language and for imitation. We have an instinct for identifying prestigious individuals to copy and learn from. Cultural norms can also be selected by evolution, without our necessarily being consciously aware of how they promote our welfare. For example, Henrich endorses the theory that monogamous societies prospered in part because monogamous marriage reduces violent competition among men.

Among the most important things we learn collectively is an approach to solving problems. In fact, our trial-and-error method of dealing with challenges can sometimes work so effectively as to actually persuade us that we are not following such a method at all but have found some brilliant formula for managing our complex world. The very prowess of decentralized problem-solving can undermine our appreciation of it.

Indeed, the degree to which we do or do not appreciate this approach to problem-solving has a lot to do with some of our political divisions, and with some heated disputes among policymakers, intellectuals, and other elites. In his recent book Foolproof, financial journalist Greg Ip says of economic-policy analysts:

Philosophically, they fall into two schools of thought. One, which I call the engineers, seeks to use the maximum of our knowledge and ability to solve problems and make the world safer and more stable; the other, which I call the ecologists, regards such experts with suspicion, because given the complexity and adaptability of people and the environment, they will always have unintended consequences that may be worse than the problem we are trying to solve.

A major theme of Ip's book is that attempts to ensure safety through regulatory policy frequently cause more catastrophic failures. For example, government provision of flood insurance encourages more people to move into flood-prone areas, increasing the cost of damage when floods do occur.

The ecologist point of view, which acknowledges the cultural character of our species and the bottom-up character of the sort of problem-solving in which we frequently engage, was expressed in this way by George Mason University economist Donald Boudreaux last year:

When a biologist encounters in a living organism a physical or behavioral trait that is unusual or unfamiliar, and that does not contribute to survival in any way that is immediately obvious to the biologist, the biologist's professional instinct is to think hard about that trait in order to identify its likely genetic benefit to its possessor. That professional instinct is sound. The biologist, upon encountering such an unfamiliar trait in an organism, does not leap to the conclusion that she has encountered an instance of "nature failure." The biologist, of course, recognizes that nature and natural selection are never perfect; sometimes living creatures are indeed saddled with traits that do indeed reduce their genes' chances of survival. But this possibility of "nature failure" is not the competent biologist's first go-to explanation whenever she cannot quickly, and within the conclusions of current theory, grasp the reason why natural selection might have created in the organism this unusual or unfamiliar trait.

Boudreaux argues that economists should have a similar respect for evolved economic practices. But instead they tend to leap quickly to the conclusion that their models show "market failure," which can be corrected through policy engineering.

The economists who have gained power at institutions like the Federal Reserve Board and the International Monetary Fund fall into what Ip would call the engineering camp. Many of these officials, as well as some of the heads of central banks in other countries, were trained at the Massachusetts Institute of Technology. They share a common approach to social problems, one which emphasizes the economist's ability to identify and correct "market failure."

After starting from nothing during World War II, MIT's economics department came to dominate the profession over the next two decades. The department's distinctive approach involved using small mathematical models of optimization subject to constraints. Because this combination of engineering and economics seemed well-suited to solving problems of wartime resource allocation, MIT was well funded by the Department of Defense. Economic engineering spread rapidly to other universities and grew to dominate the profession.

The engineers believe that policy experts should be in charge of key elements of the economy. They want the Federal Reserve Board, and especially its chairman, to play a strong role in regulating financial stability. However, as Ip points out, financial stability can be an elusive goal. Policies that increase confidence in the short run can over time result in overconfidence, leading to excessive risk-taking and ending in a severe crisis.

The economic engineers will say, as they have concerning the Fed's performance during and after the 2008 crisis, that without the Fed our economic performance would have been much worse. But this is an untestable assertion. Moreover, it is sobering to observe that the U.S. economy has suffered from recessions with at least as much frequency and severity since the Fed was created in 1914 as it did before.

Those same engineers believe that health-care policy also ought to be managed by experts. Former senator Tom Daschle explicitly called for the equivalent of a Federal Reserve to take charge of our health-care system. The Affordable Care Act called for the creation of an Independent Payment Advisory Board, composed of 15 experts who would set payment policies for Medicare. Some economists of the engineering persuasion, such as leading health-policy expert David Cutler, believe that, when independent experts are given such authority, they can create incentives that will lead to better health care at lower cost.

To an ecologist, the idea that a centralized bureaucracy could successfully manage the performance of skilled health-care professionals seems implausible. The doctor who is with the patient is in the best position to judge the most appropriate treatment. Moreover, much of medical knowledge comes from doctors experimenting with slightly different protocols and reporting the results to one another. Replacing this evolutionary process with a set of fixed national standards would thwart medical progress. Substituting top-down control for the cultural intelligence of the medical profession would likely be a step backwards.

Evolution, not intelligent design, is how societies advance.

ADAPTED CULTURES

Such evolutionary social advancement has itself been the subject of some important research and writing in the last few years. Science journalist Matt Ridley's most recent book, The Evolution of Everything, argues that we observe the decentralized, incremental, trial-and-error process of evolution in all human endeavors, including culture, law, business, and technology. Like Henrich, Ridley argues that we tend to overstate the importance of the individual genius or leader while understating the gradual, cumulative nature of change.

In the field of technology, for example, Ridley points out that many important inventions were discovered independently at nearly the same time. These include the electric light bulb, the telephone, photography, and the steamboat. Ridley's explanation for this is that successful inventors deal in "the adjacent possible," meaning small adaptations or re-combinations made possible by preceding work.

Conversely, one might observe that when a visionary tries to implement an idea before its time, the result is failure. For example, in 1993, long before the iPhone and the iPad, Apple attempted to market a small personal device called the Newton. It flopped, probably because other technologies, including the internet and the cell-phone network, were too immature.

In the concluding section to his book, Ridley writes that "bad news is manmade, top-down, purposed stuff, imposed on history. Good news is accidental, unplanned, emergent stuff that gradually evolves." But why might it be that plans imposed by powerful leaders tend to work out poorly, while evolutionary trial-and-error tends to work well?

One reason may be that individual intelligence is less significant than overall average intelligence among large groups. That is the suggestion made by economist Garett Jones in his recent book, Hive Mind. He writes,

[C]onsider this one fact: your own, individual IQ score isn't that good at predicting how much you'll earn over the course of your life....Now set that next to another fact — that nations with the highest test scores are about eight times more prosperous than nations with the lowest scores — and you can see the paradox of IQ.

The paradox is that your own intelligence seems to have a weaker effect on your income than does the average intelligence of those around you. Jones considers a number of possible explanations. Not surprisingly, many of them involve culture. For example, people with high IQ scores tend to be better at cooperating and at creating institutions that promote cooperation.

To grasp why it might not be paradoxical that the intelligence that surrounds you might be more important than your own, consider this thought experiment: Suppose that you were suddenly placed without any possessions in an unfamiliar environment, such as a remote tropical village or the Alaskan wilderness. Your own skills and knowledge would have very little value in such an environment, and your very survival would be in doubt. Yet other humans, who would score far below you on IQ tests, have mastered such environments, and it would be a great boon for you to be able to learn from them.

Henrich even goes so far as to argue that, as isolated individuals, humans are not particularly intelligent in comparison with chimpanzees. It is not the hardware of our brains that makes us superior. It is instead the software that is loaded into our brains by cultural learning. In fact, Henrich's central thesis, in terms of this metaphor, is that the hardware of human brains evolved to be able to run the software of cultural learning, and that we are the only species that evolved in this manner. To use a different computer metaphor, we are not born with much in the way of individual intelligence and knowledge. Instead, we download cultural information from the "cloud": our family and friends, teachers and mentors, books, electronic media, markets, and other cultural institutions.

Henrich emphasizes that cultural learning itself follows an evolutionary process:

[C]ultural evolution is often much smarter than we are. Operating over generations as individuals unconsciously attend to and learn from more successful, prestigious, and healthier members of their communities, this evolutionary process generates cultural adaptations. Though these complex repertoires appear well designed to meet local challenges, they are not primarily the products of individuals applying causal models, rational thinking, or cost-benefit analyses. Often, most or all of the people skilled in deploying such adaptive practices do not understand how or why they work, or even that they "do" anything at all. Such complex adaptations can emerge precisely because natural selection has favored individuals who often place their faith in cultural inheritance — in the accumulated wisdom implicit in the practices and beliefs derived from their forbearers [sic] — over their own intuitions and personal experiences.

This paragraph is highly reminiscent of Friedrich Hayek's views about how markets work. Markets coordinate across many people the tacit knowledge that resides with individuals. In contrast, the would-be economic planner, who makes decisions by "applying causal models, rational thinking, or cost-benefit analyses," works with an information set that is woefully inadequate to the task.

Henrich and Ridley both point to the development and the effects of monogamous marriage in promoting successful societies as an example of how societies evolve. Ridley writes,

Societies that chose "normative monogamy," or an insistence upon sex within exclusive marriage, tended to tame their young men, improve social cohesion, balance the sex ratio, reduce the crime rate, and encourage men to work rather than fight. This made such societies more productive and less destructive, so they tended to expand at the expense of other societies.

Ridley claims that settled agriculture created economic inequality that was conducive to polygamy, but some societies, particularly those influenced by Christianity, adopted the cultural norm of monogamy. He continues,

[A]s soon as farming came along, 10,000 years ago, powerful men were able to accumulate the resources to buy off and intimidate other men, and to attract low-status women into harems....[I]t was not such a good deal for low-status men, who remained single, or high-status women, who had to share their partners' attention. If only to try to satisfy the low-status men, societies that allowed widespread polygamy tended to be very violent toward their neighbours. This was especially true of pastoral societies reliant on sheep, goats, or cattle....[H]erders from Asia and Arabia not only experienced chronic violence, but kept erupting into Europe, India, China and Africa to kill men and abduct women.

However, in some of these settled civilizations trading cities grew up, and these generated a wholly new selective pressure — towards monogamy, fidelity and marriage....This transition to monogamy is a big theme of Christianity and an incessant preoccupation of the early Church fathers.

The institution of monogamous marriage helps to ensure that more men will have access to women. From the standpoint of evolutionary psychology, by giving men a chance to reproduce, monogamy encourages peace.

Henrich estimates that 85% of human societies permitted polygamous marriage. Where the norm of monogamy holds sway, it is reinforced by elaborate rituals and social expectations:

Social norms about sexual fidelity mean not only that the husband is monitoring his wife's sexual and romantic life, but so is the rest of the community....This has a psychological impact on the husband, motivating him to invest more in his wife's offspring (because they are more likely to be his)....

On the husband's side, norms that constrain his sexual behavior also inhibit — not prevent — him from diverting resources away from his family in efforts to obtain extramarital sexual opportunities....[A] community is now monitoring him, and violations of these norms can affect his relationships well beyond that with his wife and her kin.

Henrich writes that humans underwent a kind of "self-domestication" process. That is, we gained control over harmful tendencies, such as violence and low investment in children, by adopting cultural norms like monogamous marriage. Societies that adopted such norms were able to prosper and expand.

These societies often evolved in this direction by respecting more ordered and productive behavior, and thereby making such behavior prestigious. This phenomenon of prestige, Henrich argues, plays an important role in cultural learning in our own time too. We have evolved to respond to cues about prestige in choosing the models from whom we learn:

Across human societies, we see that seeking prestige, often more than wealth itself, drives much human behavior. However, prestige derives from success, skill, or knowledge in locally valued domains. While not infinitely malleable, what constitutes a valued domain is amazingly flexible. The differential success of societies and institutions will hinge, in part, on what domains are valued.

Henrich contrasts prestige with dominance. Dominant individuals influence others through coercion and threat. While this induces lower-status individuals to obey, it does not create bonding and learning. Prestige, on the other hand, influences through persuasion and deferential agreement. When we perceive that someone has high prestige, we want to imitate them and get as close to them as possible.

Prestige is important to us because we depend so much on our cultural intelligence. We need to know from whom to obtain our learning. We instinctively feel that we can thrive by imitating prestigious individuals.

CULTURE AND POLICY

Evolutionary anthropology emphasizes the importance of culture. Human intelligence is not embedded in the hardware of the individual brain. It is found in the software that we download from our cultural "cloud." Our knowledge does not come from our individual brilliance. Instead, it comes from our ability to learn from one another and from the past. Progress comes from small experiments and cultural evolution.

The implications of all this for how we govern ourselves and our societies are enormous. The importance of cultural intelligence implies that we should be skeptical of giving any individual or small group of individuals the responsibility to exert vast power over society. We should be wary of the social engineers and instead listen to the social ecologists.

In the case of economics, this suggests that markets are better suited than government to exploiting and expanding cultural intelligence. Henrich writes that an important lesson of cultural intelligence is that, for the greatest economic success,

we should take a page from cultural evolution's playbook and design "variation and selection systems" that will allow alternative institutions or organizational forms to compete. We can dump the losers, keep the winners, and hopefully gain some general insights during the process.

This is exactly how markets work. They allow businesses and other organizations to compete, with the profit-and-loss system serving to weed out losers and reward winners. The market has emerged in a way that facilitates cultural learning. The attempt to design something better can easily backfire by suppressing or distorting the evolutionary process.

In the case of political institutions, Ridley writes, "everywhere, political institutions show a tendency to change much more slowly than the society around them." He makes this sound like a bug, but perhaps it is a feature. Rapid change of political institutions would at worst mean revolutionary violence and at best create instability in the "rules of the game."

In his book Knowledge and Power, George Gilder develops the idea of information theory, in which information is conveyed by variable signals operating within a stable, low-noise medium. It could be that what we should want out of our political system are conditions to provide a low-noise medium that allows markets and other competitive institutions to maximize the signal production favorable for evolution. In other words, in an ideal world, if we were eager to accelerate the pace of progress, we would try to create a steady political environment with set rules to provide ideal conditions for market competition.

But Henrich offers this sobering reflection:

Over time, history suggests that all prosocial institutions age and eventually collapse at the hands of self-interest, unless they are renewed by the dynamics of intergroup competition. That is, although it may take a long time, individuals and coalitions eventually figure out how to beat or manipulate the system to their own ends, and these techniques spread and slowly corrode any prosocial effects.

This often happens in business. When management changes its incentive system, the initial effect is to improve the alignment of work effort to corporate goals. But over time, employees learn how to maximize personal rewards within the system while undertaking minimal effort to achieve corporate goals. Thus, it becomes necessary to periodically revise the rules concerning bonuses, promotion requirements, and so on.

What does this mean for the American political system? Is it destined to "eventually collapse at the hands of self-interest"? And what about our culture and its institutions? Have those, too, been gamed by the most successful for their own benefit?

There is no question that the institutions of our culture seem today to offer less to the less privileged than they used to. In recent years, for instance, scholars Charles Murray, Kay Hymowitz, Robert Putnam, and others have documented what Putnam calls "bifurcated marriage patterns," in which higher-income women tend to have children after they are married and tend to stay married, while lower-income women tend to have children out of wedlock and not to remain married for long.

The institution of marriage may also be threatened by the increasingly unequal distribution of wealth and income. When some men have vastly more resources than other men, this may translate into unequal access to women. In this context, it is chilling to note this passage from Ridley:

Surely the explanation for most killing lies in the fact that natural selection has endowed human beings with the sort of instinct that means that (in [Martin] Daly and [Margot] Wilson's words) "any creature that is recognizably on track towards complete reproductive failure must somehow expend effort, often at risk of death, to try to improve its present life trajectory."

Do bifurcated marriage patterns and increased economic inequality pose a threat to peace? If so, what might be done to change this trajectory?

Jones, in Hive Mind, offers a reason for optimism in the form of the Flynn effect, named for social scientist James Flynn. He and others have found that there has been a significant upward trend in average IQ scores. Although tests do not go back that far, Henrich estimates that the average American 200 years ago had an IQ that would equate to 70 today. (Today, a score of 100 is average.) If our individual hardware is that much better, surely we are capable of running much better cultural software.

Perhaps the main policy implication of the importance of cultural intelligence is "follow the prestige." Because prestige is such a key element in people's choice of cultural learning, much depends on how we assign prestige. In Henrich's words, "the differential success of societies and institutions will hinge, in part, on what domains are valued." If we choose well the domains that are valued, then prestige will accrue to people from whom we want others to learn. If we choose poorly, then the social norms that people live by and enforce on others will be harmful ones.

Economist Deirdre McCloskey has devoted several volumes to the thesis that the Industrial Revolution took place where and when it did because of what she calls "bourgeois dignity." That is, the domains of production, commerce, and innovation, which had been held in contempt throughout much of history, suddenly were granted respect. This in turn caused what she calls "The Great Enrichment," by unleashing the forces of economic improvement and progress that we have enjoyed ever since. The prosperity and freedom we enjoy may be functions, in large part, of our society's choosing (or coming gradually over time) to value some very constructive behaviors and traits.

MISPLACED PRESTIGE

The power of prestige to direct societal evolution suggests that what a free society chooses to value and admire is enormously important. This may not be great news for our own free society.

Today, the domain of profit-seeking business does garner some respect, and surely more than in some periods of our history. But the non-profit sector is much more prestigious. It's easy to see why: Non-profits can present themselves (often honestly, not cynically) as working in pursuit of social improvements and high ideals. But non-profits still have backers to please, and it is far from obvious that their incentives are "healthier" for society than those of for-profit firms. For-profit firms are accountable to ordinary consumers, and so in effect to the public at large. Non-profits are accountable to the elites who fund them.

The prestige of traditional social norms, meanwhile, is clearly declining in our society, and, to the extent that such norms are necessary for stable, prosperous lives, this is a serious problem. Our popular culture works relentlessly to undermine the prestige of people who follow traditional social norms, and there are very few institutions pushing in the opposite direction.

College campuses are centers of contempt for business and for cultural norms alike. There, prestige is accorded to those who denounce entire classes of people as villains and who claim to speak on behalf of other classes labeled as victims. It is ironic that our institutions of higher education are so often the sources or drivers of our contempt for these two institutions — the market and the family. Both institutions are the products, and also the settings, of the kind of evolutionary process that appears to be responsible for the enormous economic, political, and social progress that the modern West has made. They have made possible a society successful, wealthy, and comfortable enough to reject the foundations of its own success.

But we cannot sustain such a society if we persist in rejecting those foundations. In order to accept them, we must first understand them. The failure of the contemporary academy to treat as prestigious and valuable our evolved and evolving social institutions is rooted in a failure to acknowledge that such evolution — rather than the engineering and management approach to social change advanced by today's academic economists, sociologists, and political scientists — is how society in fact advances. It is a failure of the academy in its own terms: a failure to grasp the truth and to acknowledge it.

The spate of recent books making the case for cultural intelligence suggests that some academics are intent on addressing that failure. Let us hope they succeed.

Arnold Kling holds a Ph.D. in economics from the Massachusetts Institute of Technology. His latest book, Specialization and Trade, forthcoming from the Cato Institute, disputes MIT's engineering approach to macroeconomics.