Evolution and Economics
A few weeks ago, I posted the following on my other blog, theConverted:
Dr. Michael Shermer, of the Skeptics Society, has a fascinating article at Scientific American entitled 'Evonomics'. He postulates that evolution and economics are both part and parcel of the same phenomenon - complex adaptive systems.
In biological evolution, nature selects from the variation produced by random genetic mutations and the mixing of parental genes. Out of that process of cumulative selection emerges complexity and diversity. In economic evolution, our material economy proceeds through the production and selection of numerous permutations of countless products.
Quoting both Mises ("Socialism") and Basitat, Shermer shows that top-down government "design" of the economy is a ludicrous as "design" in evolution.
As with living organisms and ecosystems, the economy looks designed—so just as humans naturally deduce the existence of a top-down intelligent designer, humans also (understandably) infer that a top-down government designer is needed in nearly every aspect of the economy. But just as living organisms are shaped from the bottom up by natural selection, the economy is molded from the bottom up by the invisible hand. [emphasis mine]
He still thinks (sadly) some interference is necessary to ensure "free and fair trade", but he is, at least headed in the right direction.
But what this really points to is yet another example of hypocrisy that seems to plague both the 'left' and the 'right', both so-called liberals and conservatives. Each has their own cognitive dissonance here. The conservative right, staunchly defends the idea (for the most part) that the economy is molded "from the bottom up by the invisible hand" of the market, while denying the identical process that occurs in biology. Of course, the liberal left seems to have the opposite problem - while rightly defending the process of evolution and natural selection, they fail to see this exact same process in the field of economics and claim that the government is needed to manage the market.
One cannot support true free market economics and deny evolution nor can one deny the power of the true free market while vehemently supporting evolution. Interference in the market causes unexpected distortions and unintended consequences just as interfering with evolution does.
Since then, Dr. Shermer has appeared on Skepticality and on ReasonTV, explaining in greater detail his thesis outlined above.
In that time I have also bought and read the book The Mind of the Market. It is, of course, brilliant. Dr. Shermer also takes his thesis one step further, in explaining how a free market has an evolutionary basis, how a truly free market and truly free trade are the best ways to foster both peace and human happiness. He touches on the evolutionary basis of morality, as well as good and evil. In his chapter on it and through ongoing discussion, Dr. Shermer points to the evolution-driven biological basis for "folk economics" - why people want the egalitarian, fairness and cooperative model of society as well as the accumulation and consumer based market society; why they hate the rich but also strive to be them. And in dispelling the myth that evolution is about "survival of the fittest" and "red in tooth and claw", he not only demonstrates that cooperation and altruism are the dominant, most effective strategy for the survival of one's genes, but that this is not incompatible with a free market.
He does not, thankfully, fall into the "vulgar libertarian mode". He does not become an apologist for corporate greed. His chapter entitled "Don't be evil" dissects all that was wrong with Enron (no transperancy, destruction of team work, micromanagement, divide and conquer mentality - sound familiar CPC supporters?) and all that is right with Google (the opposite of everything that is wrong with Enron). He rightly identifies the kind of KBR-Haliburton-Enron kind of capitalism as properly corporatism and mercantilism, not true free market capitalism that Adam Smith envisioned.
All in all, he makes an excellent arguement in favour of actual freed markets and trade, based on evolution-driven human nature and behaviour. The science is solid, and Dr. Shermer provides copious endnotes to primary sources, so you can check it out for yourself.
So here is the challenge, to both those on the left and the right. Read the article, listen to the podcast, watch the video and read the book. Discuss the ideas, but keep an open mind and try to reconcile how you can believe in a bottom-up, emergent system in one area, but not in another, nearly identical area.
Consider new approaches and different solutions with these ideas in mind.