The Power of Collective Fictions and Imagined Realities in Human Society

Key Insight

Human social organization is naturally limited by the ability to intimately know and gossip about individuals, restricting stable group sizes to approximately 150. Beyond this 'magic number,' cohesion typically destabilizes, as seen in chimpanzee troops. To overcome this limitation and enable cooperation among vast numbers of strangers, Homo sapiens developed the unique capacity to believe in 'collective fictions' or 'imagined realities'—shared myths that exist only in peoples' collective imagination.

These collective fictions form the bedrock of all large-scale human cooperation, from ancient tribes to modern states and global institutions. Churches are founded on religious myths, such as the incarnation and crucifixion of God, allowing millions of adherents to unite for common goals. States rely on national myths, like the belief in a common homeland and flag, inspiring individuals to risk their lives for strangers. Judicial systems are underpinned by legal myths concerning laws, justice, and human rights, enabling complex societal governance.

A prime example is the 'legal fiction' of a limited liability company, like Peugeot SA. This entity, created through legal codes and rituals, exists independently of its physical assets, employees, or owners, capable of owning property, paying taxes, and being sued. Such corporations, despite having 'no real bodies,' are treated as legal persons because millions collectively believe in their existence. This shared belief in imagined realities, whether gods, nations, or corporations, allows for immense power and complex cooperation, distinguishing humans from all other animals who only communicate about things that objectively exist.