Interview by Peter Rooney
Dueling may seem to be the ultimate irrational act, whether pistols at 20 paces or a swashbuckling sword fight. But in a recent paper in the Southern Economic Journal, Amherst economics professor Christopher Kingston and financial historian Robert E. Wright of Augustana College maintain that people historically engaged in duels for very rational reasons having to do with creditworthiness, honor and social standing. Dueling thrived “when and where credit markets were opaque and highly personal,” they write. “Where credit markets are more impersonal and formal, like the antebellum North, Nazi Germany and much of the globe today, ‘honor’ loses its strength as a credit signal and dueling fades.” Kingston spoke to Amherst magazine about his work:
Q What is it about dueling that interests an economist?
A One thing that interests economists is trying to understand hidden rationale. If you think about why people would engage in this extremely dangerous and apparently unproductive practice, it seems like something simply irrational. But if the institution survived for centuries in so many different parts of the world, there needs to be some sort of explanation for that.
Q Is dueling purely rational?
A It’s rational from the point of view of the individual who lives in a world that values honor. Engaging in a duel might have been the rational thing to do, given the extreme costs of not dueling. From the point of view of the society overall, dueling might have been irrational, with everybody caught up in a bad equilibrium where you are expected to duel. On the other hand, the alternative mechanisms of enforcing credit contracts are also costly. You have to pay a judiciary, police, investigators and lawyers to have a system of bankruptcy law, for example. In some settings this might be prohibitively costly, and thus dueling is better than nothing as a way of enforcing contracts.
Q From an economic perspective, why was maintaining one’s honor a cause worth fighting for?
A In a world where honor is regarded as paramount in maintaining access to credit markets, it was really worth
defending, even if there was a chance that by defending your honor you would lose your life. If you were accused of being untrustworthy or not creditworthy, that could be disastrous.
Q In your model, why might someone not repay a loan?
A One possibility is that they deliberately choose not to repay, and the other is that, for example, their venture fails, so they are unlucky and are not able to repay. Dueling gives that unlucky person a credible way to demonstrate good faith. But at the same time, the prospect of having to fight a duel gives people an incentive to try to repay their loans.
Read a longer version of this interview here.