A flurry of recent activity indicates that evolution is beginning to occupy center stage in economic debates--and not a moment too soon.
Recently published books include Robert Frank's The Darwin Economy: Liberty, Competition, and the Common Good (in which he predicts that Darwin will eventually be regarded as the father of economics), Yochai Benkler's The Penguin and the Leviathan: How Cooperation Triumphs Over Self-Interest, Geoffrey Hodgson and Thorbjorn Knudsen's Darwin's Conjecture: The Search for General Principles of Social and Economic Evolution, and my own The Neighborhood Project: Using Evolution to Improve My City, One Block at a Time.
Behind the trade books is a growing academic movement, including a recently concluded conference organized by Denise Dollimore and Geoffrey Hodgson titled Evolutionary Thinking and Its Policy Implications for Modern Capitalism. As president of the Evolution Institute, I am privileged to function as a coordinator in addition to my own contribution, including a collaboration with NSF's National Evolutionary Synthesis Center (NESCent) on integrating economics and evolution. One result has been a white paper submitted to NSF titled "The Relevance of Evolution for Economic Theory and Policy", co-authored with economist John Gowdy and with 64 signatories, including luminaries such as Pulitzer prizewinner E.O. Wilson and Nobel laureate Elinor Ostrom.
Economic policies informed by evolution do not fall cleanly into any current political camp, presenting an opportunity to formulate a new Middle Path. Another exciting prospect is that the dialogue can be based on scientific norms of accountability, which, while not entirely genteel, are vastly more constructive than the fight to the death and disregard for the facts that current political discourse has become. In this spirit, I will focus on a review of Frank's book in Slate magazine by science writer John Whitfield, whose own book, People Will Talk: The Surprising Science of Reputation, will be published in November.
Frank does not aspire to entirely rethink economics in The Darwin Economy. Instead, he focuses on a single foundational difference between evolutionary and economic theory. Evolutionary theory is based on relative fitness--which individuals survive and ultimately reproduce better than other individuals. Economists sometimes think in terms of "positional goods", in their own parlance, but the main edifice of economic theory is based on absolute utility maximization--as much as possible for me, regardless of what anyone else gets.
Thinking about human economic behavior in more relative terms explains some of the excesses that are on display everywhere we look, from the $1000 suit that provides a competitive edge over a $500 suit for a job interview, to the 4000 square foot house that's worth buying in a neighborhood of 2000 square foot houses but not in a neighborhood of 8000 square foot houses, to the millions of dollars worth spending for your daughter's sweet sixteen party, if you happen to have billions of dollars at your disposal. The fact that these excesses are obvious does not mean that they have been incorporated into economic theory. Frank therefore provides an important service by pointing out the difference between absolute vs. relative utility thinking and exploring some of the implications--including a very feasible tax policy that should appeal to thinking libertarians in addition to liberals. Frank is a highly respected economist, an insider rather than an onlooker such as myself. His proposed tax policy richly deserves to occupy center stage in political and economic debates. If it is adopted, it could literally alter the fate of the nation and the world.
Whitfield agrees with Frank's tax plan but disagrees with his evolutionary rationale. According to Whitfield, Frank pays insufficient attention to another foundational difference between evolutionary and economic theory. For an economist, the pursuit of self-interest typically results in a well-functioning economy. That's what the metaphor of the invisible hand (and a lot of neoclassical economic theory) is all about. For an evolutionist, functioning well as a group requires cooperation, which is often undermined by individual self-interest. Explaining how cooperation, altruism, and anything else that appears "for the good of the group" is one of the central problems of evolutionary theory. Many attempts have been made to provide an explanation, which sail by names such as group selection, kin selection, inclusive fitness theory, and evolutionary game theory. Even so-called selfish gene theory treats cooperation as a central problem with a (partial) solution, using its own vocabulary. The relationships among all these theories are famously confusing, even to evolutionary insiders, not to speak of onlookers such as Frank and Whitfield.
Whitfield is right that Frank pays scant attention to the problem of cooperation in The Darwin Economy. You'd think that I would have beaten Whitfield to the punch in my own videocast with Frank, but I was content to focus on Frank's positive contribution. Now I welcome the opportunity to reconcile the points made by Frank and Whitfield. Intriguingly, if we follow Frank by thinking assiduously in relative terms, we can resolve most of the confusion that famously shrouds evolutionary theorizing about cooperation.
To begin, consider a tinker toy evolutionary model in which a single group consists of two types, solid citizens and slackers, that breed true. One of the joys of being an evolutionist is that these could be bacterial types just as easily as human types. The two types can exist in any initial proportion. The solid citizens provide a benefit to the whole group, including themselves, at no personal cost. You might think that such a no-cost public good is unrealistic, but at least it is imaginable. Even though the solid citizens benefit themselves in absolute terms, the proportion of solid citizens in the group has not changed. No evolution has occurred.
What is required for solid citizens to be favored by natural selection in this model? Imagine that there are several groups that vary in the proportion of solid citizens. Within each group, no evolution takes place. The proportions remain the same or vary only by chance. But the groups with more solid citizens fare better than groups with fewer solid citizens. The addition of several groups to the model creates a relative fitness difference that was lacking in the single group model--and the fitness difference is between groups, not within groups.
When I read the title of the article I thought that I would read the typical social darwinist bs. Thankfully, I was wrong, it's actually an explanation of how things like kin selection tend to have a heavier relative weight that evolutionary "selfishness" (whatever that means). There is no call for eugenics or for rampant unregulated capitalism (which wouldn't make sense because that'd be quoting Smith and Malthus disguised as Darwin.
Of course, applying non-teleological systems (evolution) to a purpose driven society should be taken with great great GREAT care, and I find the approach interesting and appealing mostly in an academic way. Studying how economics change rather than planning economics with this approach doesn't seem that far fetched, the same way that some people are already studying language change with evolutionary theory.
Kropotkin was also a keen student of evolution although, as Stephen Jay Gould points out in his 1988 paper, "Kropotkin was no crackpot”, together with the Russian school of evolutionary thought at the time, he “favored cooperation while most nineteenth-century Darwinians advocated competition as the predominant result of struggle in nature”. Gould suggests one of the reasons for this was the formative role of differing ecological contexts. Kropotkin had spent 5 years in Siberia and there "in the polar opposite to Darwin’s tropical experiences, he dwelled in the environment least conducive to Malthus’s vision. He observed a sparsely populated world, swept with frequent catastrophes that threatened the few species able to find a place in such bleakness. As a potential disciple of Darwin, he looked for competition, but rarely found any. Instead, he continually observed the benefits of mutual aid in coping with an exterior harshness that threatened all alike …”
When we think we know what is fittest, we are only experiencing reification--that seems very Hegelian, a way of the Self seeking the self-same.
You disprove your own assertion with your last sentence.
"It may be that an unencumbered market economy results is such unequal distribution of wealth" - it seems that it's happening here now and the disparity is growing and could bring (I'd say "will", if not regulated) the break up of the system. Soros said something like "Unregulated free market could be more dangerous than totalitarism". Well, monopolistic capitalism is economic totalitarism.
Thanks for well balanced, intelligent post.
These are Cipolla's five fundamental laws of stupidity:
1. Always and inevitably each of us underestimates the number of stupid individuals in circulation.
2. The probability that a given person is stupid is independent of any other characteristic possessed by that person.
3. A person is stupid if they cause damage to another person or group of people without experiencing personal gain, or even worse causing damage to themselves in the process.
4. Non-stupid people always underestimate the harmful potential of stupid people; they constantly forget that at any time anywhere, and in any circumstance, dealing with or associating themselves with stupid individuals invariably constitutes a costly error.
5. A stupid person is the most dangerous type of person there is.
As is evident from the third law, Cipolla identifies two factors to consider when exploring human behaviour:
• Benefits and losses that an individual causes to him or herself.
• Benefits and losses that an individual causes to others.
http://wwwcsif.cs.ucdavis.edu/~leeey/stupidity/basic.htm
It's an honest question -- does selfishness or altruism benefit survival? A parent's willingness to sacrifice for his/her children is definitely pro-survival for that parent's bloodline. Conversely, shallow, self-centered parents virtually guarantee that their children will grow up shallow and marginally dysfunctional. Is this the kind of thought process the author is talking about when advocating "solid citizen" behavior? I'd like to think so...
Presumably, everything that led to the current state, which is a state of apparent fitness, provided the necessary selective environment to do so. But that would have been the case even for those organisms that didn't survive, eventually.
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This line stood out for me, for two reasons:
1) Isn't this the crux of why we won the Cold War and the Soviets lost? In this case, "raising sufficient revenue" meant being able to produce in sufficient abundance to spend on defense and still take care of the needs and desires of the people.
2) It also resonates with what's going on relative to the USA and China. There's real fear that China will displace the US as a leading world power, based on its growing ability to create wealth while we stagnate.
Any thoughts out there?
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Yeah, that's an excess alright. It also flies in the face of some very cogent wisdom my Dad passed on to me:
"Look to buy a relatively low-priced house in a high-priced neighborhood, and take care of it." He did very well by that philosophy. Never lost money on a house -- which is more than I can say for myself at the moment...
Anyone familiar with 19th Century thought knows this path was well marked in those days. The idea that society evolves by a process of variation and selection was set out in great detail in Spencer's works..
It is obvious, almost tautologous. People try out various ways of thinking and acting; some ideas work better than others and the ideas propagate themselves. Sometimes this is because the bearers of the surpassing ideas displace peoples stuck with failing folkways, but it also by a process of diffusion of just the technologies.
Spencer applied the paradigm to every aspect of culture. It makes a great deal of sense, and it is worth looking at. .
You recognize Spender's intellectual legacy, but seem to go along with neglecting his place in not just 18th Century, but even contemporary, thought.
Omitting Spencer from a discussion of cultural evolution is as though some latter-day Winston Smith, working for some post-1984 Ministry of Truth has torn the pages from the history books.
Be that as it may, any discussion of evolutionary cultural anthropology, applying the principles of evolution to such fields as law, religion, economics, politics and social organization, must necessarily cover ground Spencer trod. Neglecting his contributions suggests what this master meant when he wrote that, "The greatest of all infidelities is the fear that the truth will be bad."
Moderns shy away from cultural evolution because they cannot stand the light it sheds on their assumptions.
I am curious though about Republicans and evolution. When did the Republican party become so anti-science? They were the party of the EPA in the 70's. What happened?
A Few Impertinent Questions about Autism, Freudianism and Materialism
http://30145.myauthorsite.com/