The Concept
The concept for this edition is “Kinship".
This theory explains a lot of costly endeavour that people do for others.
This includes costly behaviours such as child investment, organ transplantation etc.
These can probably be explained by the following:
Blood relatives tend to have copies of the same gene by descent from a common ancestor
Kinship creates numerous opportunities and cues to reliably identify kin.
Highly costly cooperation is restricted to only very close kin. i.e. spouses, siblings.
This also contributes to the Us vs Them(We vs Outsiders) phenomenon.
Credits: https://www.umanitoba.ca/faculties/arts/anthropology/tutor/image_list/39.html
This diagram gives a idea about the degree of relatedness. The lesser the distance from the centre, the more the chances of the person undertaking highly costly behaviour.
Examples:
The owner of a business will passover his company to his son even though his son is not competent to run the business. This costly behaviour is explained by kinship.
A person is more likely to give his kidney( highly costly behaviour) to her sibling than to her second cousin. This type of costly behaviour decreases as the degree of relatedness decreases.
A question that we tried answering using this concept.
Why do some businesses have a high level of Kin employment?
We looked at probable determinants to the question and narrowed down on two which have the most effect on the Kin employment.
Degree of Expertise: This is the expertise/skill required in that job/business.
Degree of Trust : This is the trust that the employee has to have on his employees. This can be high due to the following factors
Monetary Risk.
Low state capacity/low trust on the criminal justice system
The business lies in the legal gray area or is illegal.
Looking at the 2X2 matrix that we have made. Here are specific scenarios as an example.
The bottom right quadrant: High trust, Low expertise. For Instance, running a drug business: So kin employment is at the highest.
The top right quadrant: High trust, High expertise. For instance, as a diamond worker in a business which doesn’t pay taxes and operates under the radar. The employee wants to hire his immediate kin but has to look at least some degree outwards for the right expertise.
The top left quadrant: Low trust, High expertise. For instance, as an IT worker in a legal company. The employee has no need to hire kin as it's a perfectly legal business and he can use the criminal justice system as a resource.
The bottom left quadrant: Low trust, low expertise. For instance, as an employee in a fully legal grocery shop. The monetary risks are quite low and because the operations are perfectly legal so there are legal resources available. So, Kin employment is not needed.
What can the State do?
There is a need to intervene in the top right quadrant and bottom right quadrant which show considerable levels of Kin employment. The following steps are suggested
Increase state capacity in the criminal justice system.
Make it easier for business to become legal : lower tax rates, efficient bureaucracy
Push the economy towards more skill dependent jobs
One interesting insight that we arrived at is that kinship has certain positive impacts on the economy as well. For instance, look at Hawala Transactions. These are transactions done without using the formal banking system and avoid bank charges/scrutiny.
Person A wants to send money to Person B (from Delhi to Bengaluru) but doesn’t want to use the formal banking system to avoid the high fees/scrutiny. He approaches a Hawala agent 1 in Delhi and gives him the money. Person B gets the money from Hawala agent 2 in Bengaluru. There is no immediate cash changing hands. The system runs on trust and is controlled by a specific clan. The system is running because of Kinship.
I also did a podcast on the same concept. Give it a listen.
In other news, we at Takshashila Institution are exploring this unique intersection of Biology and Policy.
If you interested in joining our discussion about implementing policies using biological reasoning, do consider joining our “Biology and Policy” learned society.
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