Human Nature and Institutional Design

The debate over whether human nature is instinctively virtuous or self-interested has been happening for hundreds, probably even thousands of years. Assuming people are virtuous can lead to institutions that do not protect other people from the self-interested, and making the assumption that people are self-interested can lead to institutions that are encroach on the rights of the people and restrict freedom. It is easier to protect a country from corruption if people are seen as naturally self-interested than to assume that a person will always make the virtuous decision. An example of this corruption was during the 1830s when the Native Americans were being forced off of their land. Based on this situation and the events that took place, I believe the best and most useful basis for designing institutions like government and public policy is to assume that people are self-interested.

In the 1830's, almost 125,000 Native Americans lived on acres of land in the southeastern United States in states, such as Georgia, Alabama, Tennessee, Florida, and North Carolina. Their ancestors had occupied and cultivated this land for many generations, but by the end of the decade, few remained. Why would they leave land that was so special to them and had so much history for their tribes? The white settlers didn't completely accept the Native American people's ideas about land and property and whether it can be owned or not. The settlers believed it could, while the natives believed the opposite. This came to be known as the Indian problem. The settlers wanted the land occupied by the Native Americans so that they could make their fortunes by growing cotton on the land. They tried to solve this problem was to civilize the Native Americans. The goal of this campaign was to make Native Americans as much like white Americans as possible by encouraging them to convert to Christianity, learn to speak and read English, and adopt European-style economic practices such as the individual ownership of land and other property (including, in some instances in the South, African slaves). They wanted this so badly that they were willing to do almost anything to get it. They stole livestock; burned and looted houses and towns; committed mass murder; and squatted on land that did not belong to them. Despite a few Supreme Court cases affirming the native nations' sovereignty, President Andrew Jackson and the southern states were still determined to secure the land. Even though the settlers knew that the land was not theirs, they still tried everything they could to get their agenda completed through programs such as civilization. There were no laws restricting the settlers from inflicting their ideals onto another people, so they were lawfully allowed to strip this people of something that was theirs.

In 1830, Andrew Jackson signed what was called the Indian Removal Act, which gave the federal government the power to exchange Native-held land in the cotton kingdom east of the Mississippi for land to the west, in the 'Indian colonization zone' that the United States had acquired as part of the Louisiana Purchase. Even though the law did not permit anyone, including the president, to coerce the nations to give up their land, Jackson and the government frequently ignored this and forced them to leave their homelands, often by threat of invasion. President Jackson's actions prove that people, especially people with power, will do what they think is best no matter what the law says, so it is important to have a government structure that prevents people in power from being able to ignore the law. There should be consequences for people who ignore the law, or else the laws will not be taken seriously and many people will not try even a little bit to be decent people and live by public policies.

After they were expelled from the land, the journey to their assigned territory was made on foot and many did not survive the trip, known as the Trail of Tears. The Cherokee people were divided: when asked about the best way to handle the situation, some wanted to stay and fight and others thought it best to comply with the government in exchange for money and other things. In 1835, a few representatives of the Cherokee nation negotiated the Treaty of New Echota, which traded all Cherokee land east of the Mississippi for $5 million, relocation assistance, and the compensation for lost property. For the national government, the treaty was final and worked in their favor, but many of the Cherokee people felt betrayed. The nation's chief, John Ross, wrote to the United States senate protesting the treaty and almost 16,000 Cherokees signed his petition, but Congress approved the treaty anyway. By 1838, only a small number of Cherokees has actually left their homeland, so President Martin Van Buren sent troops to speed up the removal process. The Cherokee were forced into stockades at gun point, while their homes and belongings were looted by whites, and then marched more than 1,200 miles by whites into Indian territory. Whooping cough, typhus, dysentery, cholera, and starvation were epidemic along the way, and historians estimate that more than 5,000 Cherokee died as a result of the journey. Tens of thousands of Native Americans had been forced to leave their land in the southeast and driven across the Mississippi to Indian territory with the promise that their new land would be left alone forever. However, as white settlers pushed further west, their land became smaller and was eventually gone. Although this is one of the more extreme examples of America suffering the consequences of its actions, we are able to learn from this what can happen when efficient government laws are not made and enforced.

By assuming that people are self-interested, laws are naturally made more carefully and with more details that restrict people from doing things they shouldn't be able to do. The most useful basis for designing institutions, such as government and public policy is to assume that people are more self-interested than virtuous. It is the best way to prevent extreme corruption and any taking advantage of government laws and policies. If we let laws be made based on the assumption that people are virtuous, we might end up with more problems like this in the future.

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