The Rise and Fall of Nations: A Perspective from the Evolutionary Humean Farmer Game

Abstract

Abstract We employ evolutionary game theory to derive an insight into the scholarship of the Rise and Decline of Nations. We construct the Evolutionary Humean Farmer Game which, following David Hume, employs two behavioral types: the reciprocal type (R) who offers help but will punish when betrayed; and the selfish type (S) who offers no help. Punishment is through assortative matching where the probability of matching with an R-type decays but improves with abidance. Modern scaffoldings of the opportunity cost of helping e > 0 and the cost of punishing p > 0 are added. The levels of these parameters are established as Humean conventions which themselves change with the socio-physical environment. We employ Malthusian replication to mimic Hume’s protracted process of discovery. The unique evolutionary equilibrium of this game is the pure R-type (cooperator) population if and only if the benign inequality holds: the level of vigilance b exceeds the sum of the helping cost e and the punishing cost p. This condition supports a rise in the proportion of R-types in the population thereby raising productivity and overall prosperity—the nation rises. But increasing prosperity and population growth profoundly change the socio-physical environment, in turn, changing prevailing conventions: reduce vigilance b while raising both the cost of helping e and the cost of punishing p—what collectively Gibbons called the “loss of civic virtue”. If these changes reverse the benign inequality, the nation embarks on a trajectory of increasing defection, decreasing productivity and decline. JEL Classification: B0, B15, B31, C73