Number of words: 625

Exploring the indirect form of reciprocity is important because it is critical for society. Direct reciprocity—“I’ll scratch your back and you scratch mine”— operates well within small groups of people, or in villages where there is at ightknit community where it would be hard to get away with cheating one another. In small societies, indirect reciprocity is also at work, as people create, observe, and report the soap opera of everyday life. But by the time of Christ, Eurasia’s middle latitudes were straddled by the Roman Empire, the Parthian Empire, the Kushan Empire of Central Asia and Northern India, and the Han Empire of China and Korea. To extend and thrive, these sprawling societies had to depend on more than just direct reciprocity.

Societies could more easily evolve to become larger, more complex, and interconnected if their citizens depended on economic exchanges that relied on indirect reciprocity. Today, this is central to the way we conduct our affairs and cooperate. With the help of gossip, chat, and banter we are able to gauge the reputation of other people, sizing them up, or marking them down, to decide how to deal with them. This sheds light on both the proliferation of charity and of glossy celebrity gossip magazines.

Thanks to the power of reputation, we think nothing of paying one stranger for a gift and then waiting to receive delivery from another stranger, thanks also to the efforts of various other people whom we have never met and will never meet —from the person who packs our gift to the one who checks our credit rating. In our vast society it is a case of: “I scratch your back and someone else will scratch mine.” We all depend on third parties to ensure that those who scratch backs will have theirs scratched eventually.

Under the influence of indirect reciprocity, our society is not only larger than ever but also more intricate. The increasing size of modern communities can now support a greater subdivision of physical and cognitive labor. People can specialize when networks of indirect reciprocity enable a person to establish a reputation for being skilled at a particular job. Thanks to the power of reputation, great collections of mutually dependent people in a society can now sustain individuals who are specialized to an extraordinary degree, so that some of its denizens are able to spend much of their time thinking about how to capture the quintessence of cooperation in mathematical terms while others are paid to think about how to express mathematical terms about cooperation in plain English. It’s amazing.

This link between the size of a settlement and the specialization of its inhabitants was recorded in ancient times. Xenophon, an Athenian gentleman soldier, wrote in the fourth century BC that the bigger a settlement was, the more finely divided its labor: “In a small city the same man must make beds and chairs and ploughs and tables, and often build houses as well; and indeed he will be only too glad if he can find enough employers in all trades to keep him. Now it is impossible that a single man working at a dozen crafts can do them all well; but in the great cities, owing to the wide demand for each particular thing, a single craft will suffice for a means of livelihood, and often enough even a single department of that; there are shoe-makers who will only make sandals for men and others only for women. Or one artisan will get his living merely by stitching shoes, another by cutting them out, a third by shaping the upper leathers, and a fourth will do nothing but fit the parts together.”

Excerpted from page 52-54of ‘Super co-operators ’ by Martin Nowak