Bart Engelen

Complementing Markets and States: The Importance of Communities 

Most modern political philosophers assume that individuals act in ways that serve either their own private interest or the public interest. This behavioral dichotomy has led to a dichotomy in normative thinking on ideal institutions as well. Those who model individuals as egoists tend to favor markets for their capacity to spontaneously coordinate self-interested behavior into mutually beneficial outcomes. In contrast, those who model individuals as public-spirited tend to favor a more pervasive state. This article, however, argues that there are phenomena that do not fit these behavioral and institutional dichotomies. Focusing on strong reciprocity, it aims to show the importance of communities in reforming and improving modern institutions.