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Greene: Signal goodness in your daily actions

Many economists contend that, for the most part, people act selfishly. In our current society where headlines trumpet headlines about greedy corporate executives and the like, it may be easy to agree. Yet people in general often perform unselfish acts like devoting considerable time and money to charities, volunteer organizations, public service and even to voting.

In his newest book, Kenneth Greene, distinguished professor of economics, explains that pure altruism cannot explain such activities because of the free rider phenomenon.

But he and co-author Phillip Nelson, emeritus professor of economics, reason in Signaling Goodness: Social Rules and Public Choice that people engaged in altruistic activities do as much good for themselves and their heirs as the harm done by the discovered corporate miscreants.

These activities signal trustworthiness in daily activities and change how others perceive them and their reputations, and how they perceive themselves, through conscience. These changes in perception at all levels have empirical implications similar to the signaling theory.

Greene notes that such people have more relationships — and more productive relationships with others who are “good like themselves.” Signaling Goodness focuses on three propositions. First, one that discusses how charity and voting increase one’s reputation for trustworthiness. Second, that some behavior is meant to signal specific groups of people one already associates with and is highly imitative. And finally, one that indicates there is goodness signaling of a general variety that might offend some, but is meant to impress others and that this signaling is asymmetric, signaling goodness only if one comes down on one side of certain issues.

This final proposition includes support for redistribution to the poor and very young, and spending on the environment because of certain social norms developed in prehistoric times that had advantages from a group survival perspective. These norms continue today despite the possibility that democratic voting processes already express enough support for such issues.

The book contains a plethora of empirical data that the authors contend are consistent with their hypotheses. It shows that individual characteristics that increase returns from signaling conscience-driven behaviors lead to more giving of money and time to both religiously-based and non-sectarian charities. People who are more actively religious give more to both and have more to gain from signaling. The same people have alternative means of signaling general goodness by taking sides on two-sided issues like defense, patriotism and “family values.” They also are considerably less liberal in advocating for redistribution and for environmental causes.

The same is true of those with big stakes in the community. Those with fewer stakes in localized communities, such as the religiously inactive, are likely to be strong asymmetric goodness signalers.

Greene and Nelson also present much empirical data supporting the view that those who enter certain professions, particularly the academic fields in the social sciences and humanities, are a self-selecting group that specialize in asymmetric goodness signaling and that this can help explain their attachment to “political correctness” and extremely liberal political positions.

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