After discovering the basic principle of electromagnetic induction in 1831, Michael Faraday was asked by a skeptical politician what good might come of electricity. "Sir, I do not know what it is good for," Faraday replied. "But of one thing I am quite certain -- someday you will tax it."
Living cells, complex systems and the economy
In my 2011 book, Evolution: A View from the 21st Century, I briefly reviewed the relevance of 21st century evolutionary theory to other fields. One of those fields was economics. Since my arguments failed to convince my wife of this relevance, let us explore the biology-economics connection in more detail, with particular reference to economic stability and instability.
I suggested that cell division cycle "checkpoints" could serve as useful models for economic regulatory regimes. The checkpoint concept was recognized in the 2001 Nobel Prize awarded to Lee Hartwell of the University of Washington. The idea of a checkpoint is that cellular regulatory circuits include mechanisms to hold up progress through certain key places in the cell division cycle ("checkpoints") when the circuits receive information that damage needs to be repaired or that an essential process has not yet been properly completed (Hartwell 1989). Checkpoint systems monitor aspects of the cell cycle as diverse as DNA replication (Putnam, Jaehnig et al. 2009), chromosome alignment (Taylor, Scott et al. 2004), and cell size (Rupes, Webb et al. 2001). Without proper checkpoint regulation, cell reproduction either stalls or proceeds in an uncontrolled fashion.
The checkpoint concept has profound implications for how we view biological systems, including the economy. Since checkpoint operations are based upon constant monitoring, information acquisition and signaling, I argue that cell regulation involves cognitive processes. In this context, I use the terms "cognitive" and "cognition" to mean that actions are based upon information or knowledge. This is consistent with Wikipedia's definition: "The term cognition (Latin: cognoscere, "to know", "to conceptualize" or "to recognize") refers to a faculty for the processing of information, applying knowledge, and changing preferences." One of the most basic lessons of late 20th and early 21st Century molecular biology is that sensory, signaling and regulatory functions and networks are often as or more abundant in living cells than executive functions and networks that carry out specific biochemical and biomechanical tasks (Gerhart and Kirschner 1997; Alberts, Johnson et al. 2002). From this well-documented lesson, we are entitled to postulate that cognition and control are as essential to life as metabolism, DNA replication and protein synthesis.
How do these insights apply to economics? Checkpoint systems notably break down in cancer cells (Hartwell 2004). Cancer may usefully be viewed as an analogy to an economic system in crisis. The analogy may be particularly appropriate to the US economy, in which financial markets turnover expanded from 1.5 times GDP in 1960 to over 50 times GDP in 2000. It is not unreasonable to argue that the housing bubble and 2007-2008 collapse were chiefly the results of uncontrolled proliferation by aberrant forms of normally useful constituents in the body economic: mortgages and financial derivatives. The crisis might never have happened if proper checkpoints (i.e. government oversight and regulation) had been fully operational.
This interesting coincidence is particularly important because living cells are often cited scientifically as paradigms for complex interactive systems. For example, my friend Wendell Read pointed out to me that a course on Complex Systems at George Washington University links the cell and the economy as objects of study. Moreover, evolutionary theories impact our thinking about economics implicitly and explicitly, as occurred when Robert Frank called his new book on the current financial contraction, The Darwin Economy.
Recently, the New England Complex Systems Institute (NECSI) became involved in controversy because its President, Yaneer Bar-Yam, endorsed the Occupy Wall Street movement. When questioned about taking such a seemingly unscientific political stance, Bar-Yam referred his readers to an NECSI study on the financial system and how it displays behavior typical of other complex systems. The conclusions of the NECSI study have relevant scientific, economic, social and political implications: "Identifying the underlying reasons for instability of the economic system and how they may be corrected motivates our work...Our results show that government policy decisions, often in deregulation but also in regulation, have undermined the ability of our economic system to function and made it highly susceptible to crises...When functioning properly its action enables both basic survival and many other opportunities for us, individually and collectively. The need for its functional reliability should be apparent, and should not be assumed."
Living cells are replete with intricate monitoring and regulatory circuits because survival, reproduction and adaptation to changing circumstances must be highly robust. Understanding these circuits and how they operate is a priority for 21st century cell and molecular biology. As the introductory words of Michael Faraday imply, significant practical application of scientific exploration is inevitable, even though the forms it will take are unknowable in advance. In other words, increased understanding in molecular, cell and evolutionary biology may have significant potential for fostering better economic management. Certainly, ideas based on outdated genetic determinism or Social Darwinism promise little help. Accordingly, let us hope that truly open research in all fields of science, including evolutionary biology, is a priority of our national recovery agenda.
Alberts, B., A. Johnson, et al. (2002). Molecular Biology of the Cell. New York and London, Garland Science.
Gerhart, J. and M. Kirschner (1997). Cells, Embryos, and Evolution. Malden, MA, Blackwell Science.
Hartwell, L., Weinert, TA (1989). "Checkpoints: controls that ensure the order of cell cycle events." Science 246: 629-634.
Hartwell, L. H. (2004). "Yeast and cancer." Biosci Rep 24(4-5): 523-544.
Putnam, C. D., E. J. Jaehnig, et al. (2009). "Perspectives on the DNA damage and replication checkpoint responses in Saccharomyces cerevisiae." DNA Repair (Amst) 8(9): 974-982.
Rupes, I., B. A. Webb, et al. (2001). "G2/M arrest caused by actin disruption is a manifestation of the cell size checkpoint in fission yeast." Mol Biol Cell 12(12): 3892-3903.
Taylor, S. S., M. I. Scott, et al. (2004). "The spindle checkpoint: a quality control mechanism which ensures accurate chromosome segregation." Chromosome Res 12(6): 599-616.
More:Financialization Yaneer-bar-yam Leland Hartwell New-england-complex-systems-institute Checkpoints
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more