Scale makes big surpluses function differently from small ones. I first discovered this principle three decades ago, when my parents sent me to New York City to visit a cousin for my sixteenth birthday. My reaction was pretty much what you’d expect from a midwestern kid dumped into that environment—awe at the buildings and the crowds and the hustle—but in addition to all the big things, I noticed a small one, and it changed my sense of the possible: pizza by the slice. Where I grew up, I worked at a pizza chain called Ken’s. Here I learned this: A customer asks for a pizza. You make a...
one of the great bulwarks of ethical standards in a society is people’s willingness to punish others who defect from norms of fairness or good behavior, even when meting out that punishment costs them something. This is exactly what responders do in the Ultimatum Game when they reject low offers, and because society enjoys the benefits of this individually costly behavior, it is called altruistic punishment. People derive pleasure from punishing wrongdoing, even if it costs them time, energy, or money to do so.
When we want something to happen, and it’s more complex than one person can accomplish alone, we need a group to do it. There are many ways to get groups to undertake big or complex activities, but for large-scale, long-lived tasks, the primary mechanisms have been twofold. The first is the private sector, where a task will get done when the group to do it can be assembled and paid for less than their output will fetch in the market. (This is the world of the firm; it is how most cars are built.) The second is the public sector, where employment comes with an obligation to work together on tasks...
The decision not to make someone else’s life better when it would cost you little or nothing has a name: spite. The music industry, in order to preserve its revenues, wanted (and still wants) all of us to be voluntarily spiteful to our friends.