I just finished reading Ian Maitland's paper for tomorrow's Paduano seminar at NYU. The argument, which I found persuasive given its premise, goes like this: If (as lab experiments on willingness to contribute to public goods suggest), most people are conditional cooperators whose willingness to cooperate goes away if the selfish are not punished, then hierarchy and other control mechanisms in the firm have significant value. Maitland concludes that economists are therefore right in their governance conclusions even if they are wrong in their model of man, and sociologists who wish to dispense with control in the firm are wrong in their conclusions even if their model of human willingness to cooperate is correct for most people.
Some value competition thoughts provoked by the paper: Instead of or in addition to focusing on the division between good and bad--between conditional cooperators and the anti-social--one can focus on the division between two groups that both have their good and bad features, and in whom egoistic values of a kind as well as altruistic values can be desirable. Let's call the groups "market people" and "equality people." In the collective public goods experiments of Fehr, et al that Maitland focuses on, it's a reasonable guess that the market people are considerably more likely to do the socially undesirable thing by defecting. In a different sort of experiment--a "rights game"--that involves whether people are willing to resist being treated unfairly, contrary to their immediate interests in having an easy life but also benefically to the firm and society, I would also bet that market people are less likely to do the socially desirable thing. Equality people in sticking up for their rights would be acting based on what in VC parlance are called egoistic values, in that their actions are not economically rational (given that self-interest includes living an easy life), but do aim at enhancing their welfare.
But there are also plausible experiments that relate to plausible real life circumstances in which my intuition is that market people would show more desirable values of both the altruistic and the egoistic sort. In a "competition game" that examines subjects' willingness to engage in socially useful work that is rewarded by performance incentives such as dollars, my guess is that market people will be considerably better than equality people at overcoming their self-interest in an easy life by means of egoistic values, in this case commitment to individual reward and achievement. Finally, in an "envy game" that examines subjects' willingness to take from or give to the productive, my intuition is that market people will be better than equality people in showing socially desirable altruism.
The case for market people and equality people being both useful and destructive depending on circumstances is enhanced by the realization that the payoffs in any of the four classes of experiments can be flipped around so that the games have the opposite ethical valence. Instead of a public goods game, one can have a "public bads" game in which the noncontributing market person is the benefactor of society. Instead of a competition game with a growing pie, one can have a competition game with a fixed total output in which the mellower equality person intead of the toiling market person benefits society. Instead of a rights game, one can have a "resentment game" in which the acquiescent market person rather than the indignant equality person is socially helpful. Instead of an envy game, one can have an "equal opportunity game" in which the more equal distribution advanced by the equality people helps society.
While most of these VC thoughts are orthogonal to the paper, I believe they have some relevance to Maitland's argument, and more relevance to the broader pro-market, libertarian perspective that informs his work. In one sense, the VC points are supportive of a market-oriented perspective, in that they can be used to counter the common, simplistic link drawn between market-orientation and anti-social selfishness or lack of values, and on the other hand between market-aversion and pro-social values. In another sense, the VC points given here are less supportive, since I have postulated a moral parallelism--one might call it equivalence--between "equality people" and "market people" that I suspect is unsatisfactory from a libertarian perspective, as well as from an egalitarian one.