Being and Time: On the Nature and the Evolution of Institutions

The process that drove the early evolution of hominid culture was an arms race that led to selection for 'big brains,' higher consciousness, and language. Culture was a constraining force on this arms race. 'Big brains,' higher consciousness and language paved the way for the evolution of theory of mind and lower rates of time preference, two keys to the development of complex culture. Culture is a shared mental construct, a form of shared social intentionality with a deeply abstract and symbolic nature. Our symbolic ability enabled the development of this public good, which included such mental constructs as promises, obligations, contracts, marriages, property, money, agency, and government. Cultural institutions change the way we think because they both reduce the cost of cognition and become a substitute for cognition by forming a framework for social habits and routines and that allows for specialization in cognition over space and time; in a fundamental and often unrecognized way, they reduce transactions costs. Perception—including social perception—is an ill-posed problem. Culture provides background assumptions and constraints which allow us to solve this problem and thereby reduce transactions costs.