Folk economics is by far the largest barrier that stands in the way of free markets — hence the importance of understanding its cause and cure. Paul Rubin draws on evolutionary psychology to explain the stubborn persistence of folk economics. FULL ARTICLE by Toban Wiebe
Source link: http://archive.mises.org/13904/evolutionary-psychology-and-the-antimarket-bias/
Evolutionary Psychology and the Antimarket Bias
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Lately I have been struggling to find some rational explanation as to why Socialism seems to enjoy a resurgence every generation or so, despite being proven time and again to be based upon false principles. This article has given me a new perspective on the problem, and for that I thank you.
Wow ,Tobin ,not a single bit of science involved in this post. I guess you’re from the economic school that just makes thing up because it supports your ideology.
Keynesianism?
I agree completely. This was one of those articles justifying economics as a religion. We just need to have faith and everything will be okay!
also, jumped from the theoritical free market to the real world at random. sorry, just doesn’t cut it.
Where does the article or anyone here say we “just need to have faith.” If you don’t believe the market works how do you explain that those countries that have established and long sustained individual and market freedom have seen the largest growth in personal and aggregate wealth?
It is not faith that is required, but reason that rejects misconceptions founded in ignorance.
Faith is instead what is required to believe in interventionism, which can only be called an epic failure as it has been proven throughout history that it just doesn’t work. When will you renounce the religion of interventionism?
The problem is that economics is not a science. You get Kenesian economics when something that isn’t a science is pretended to be one. Economics is a non-intuitive art.
The point is, you can’t post your hypothesis as fact when you have done nothing to support it. No science just BS. Oh wait, its the Mises blog…
so go find something else to do with your time, joe. dropping by and posting arsehole remarks doesn’t help anyone or anything, except maybe for that little lump in your pants.
So , I don’t get to participate, I assume because you disagree with some point that I made?
What point, joe? You’ve not made any. Just a couple of snide one liners.
And there’s no problem with disagreement at all, that’s really the whole point in joining a discussion. When the reasons for the disagreement are clearly set out in good spirit and there’s open minded engagement between opponents, that’s most enjoyable. But calling the blog on which you’re posting a load of BS is hardly participating. If you don’t want to play nice, you can take what you get. You could always just stay at home and write out C + I + G + X − M = Y over and over again. That’s pretty scientific.
Post your scientific evidence on why you thought the last movie you watched was good or not. Economics, like film, art, and literature, is a creation of the human mind and not a scientific principle grounded in some natural law, and as such, what you would classify as evidence cannot be provided. If it is, then the economic argument being presented is immediately false as intangible human action and preference cannot be scientifically or numerically proven.
not numerically, true. but not unscientific, either. i cannot have my cake and eat it too.
“Oh wait, its the Mises blog…”
…and?
and, the blog seems to be more propaganda than anything else. I disagree with the posters who claim Economics is not a science, I believe the definition states that it is a science. There are real requirements for conducting science and they are rarely met here. This particular post is a good example of bad science.
Praxeology is the study of logical human action. I think of it as a case study – like in medical journals. In this situation, with these people involved, under these circumstances, this happened, for example. This may be a stretch – what if you compiled a bunch of these “case studies”, all from similar situations (i.e., how everyone reacted to a type of zoning ordinance in towns across the country or world), and treat the data binomially (they either complied, or objected, for example)? I already see some apparent flaws to this admittedly simple approach, but this would allow for some sort of non-parametric statistical analysis (to see which way human action shifted, one way or the other). Has anyone done anything like? If I am way off here, let me know. This could inject a little more statistical analysis into praxeology, perhaps………?
If the market activities are free, then action of the aggregate is optimized if the results are random.
If their is a signal in the noise then something is creating that signal and the process is no longer optimal. It may be possible to eliminate the signal because it is possible to detect that the signal is gone.
To me the stock market graphs do not seem random but driven. It is my conjecture that statistical process control methods could detect that signal. Can that information be used to accuse someone of market manipulation?
can you cite even one austrian economist who shares this opinion?
I slipped and my reply ended up below. My apology.
This depends on what you define as “science.” By the positivist definition you’re right, by the standard definition around these parts you’re wrong.
“A look back through history reveals that people of all times and places have held these same biases.”
- Wrong. Tell that to Ancient Celtic Ireland (1,000 years). Pennsylvania in 1680-1690. The Not So Wild West. The medieval fairs of Champagne (100 years +) etc.
That is the natural state of things. When a counter veiling force comes in, supported by ideology to try gain legitimacy – those ideas need to be countered, or they begin to hold sway and then influence people.
“These two facts — its universality and its resistance to reason — strongly suggest that folk economics is a cultural universal, attributable to the genetic makeup of the species.”
- Except it’s not.
“If it were not, we would expect that libertarian ideas would bring success to cultures that adopted them, and that they would spread via growth and imitation.”
- Previously, the positive & correct case for economics and libertarianism were not as clear – nor even anywhere near fully understood so they could be defended.
And yet people, when not forced or given propaganda – they naturally went about voluntary associations, and the market formed. These are the examples above.
What has happened is that these days, with state schools, universities, mainstream media (airwaves controlled by the state via licensing) etc etc. There is no clean slate, people are constantly bombarded with the false and wrong economics and political philosophy from the earliest of days.
What do you expect? That in no way lays comment to the nature of man though. Economic and political philosophical education is needed to COMBAT the fallacies etc offered by the intellectual whores of the state. In an anarcho-capitalist society, a free society – not every person, cat and dog needs to understand or study economics.
This is true.
Most people are indoctrinated at a very early age, from their very own parents, then their school and peers until the idea of the state is ingrained into their very own personality and it is something they cannot divorce their ideas from. Butler Schafer has written about this.
I know this because I used to think like that. Many here probably experienced it as well.
With such terrible odds, it is a wonder any of us were able to break free (at least intellectually) and this gives me hope that someday others will also be able to overcome the undue influence of the death cult called “State”
I agree.
People seem to think that the society in which we live is the product of “human nature”, yet since the moment of birth we’ve been systematically abused by the “State”. And this has been going on for how long? So, how can we judge humanity on a contaminated sample? We don’t live in a free society. We are all controlled in one way or another and that control, I believe, is what creates the deviant behavior that we are then judge by.
My personal skepticism re: evopsych aside, I would like to point out that “folk economics” hardly seems like the biggest impediment to free markets. Do we really want people trusting economists like they trust other experts when so many economists today are anti-market?
We should be more concerned with the birth-to-death mental conditioning against free markets that goes on than we are with what biases people might have coming out of the womb.
When “folk” is appended next to a discipline’s name, it’s usually by scientistic elitists come to think of it, trying to denigrate concepts they usually lack the conceptual tools to rationally deal with. So I agree, folk economics is hardly a danger compared to more scientistic brands of the discipline.
The issue is that economics today is dominated by a group that has attempted to formalize the same folk economics that is harmful to further human advancement to the point that it masquerades as legitimate thought.
Evolutionary explanation of folk economics?
As a Christian, I don’t need a complex explanation of why people remain ignorant of good economic theory. People are a corrupted creation and because of that are self focused, ignorant, and lazy in thought and action (to differing extents.) Christian praxeology at its simplest.
The writer makes some cogent points, but there is much I could take issue with in the detail of this article . However for now I just want to highlight one or two things. This statement:
‘If people trusted economic theory to professional economists, their economic ignorance would be as harmless as their ignorance of most other subjects.’
….just has to be the most irresponsible and overweeningly arrogant* statement Ive ever read on on Mises.org. If theres one thing the Austrian school has taught me, it is that the overwhelming majority of professional economists are quite as ignorant of economic fundamentals as the rest of the ordinarily ignorant population, and far more dangerous. Do we really need to name them? Krugman, Samuelson, and Keynes are three who come readily to mind, but there are hundreds more.
Secondly, the writer makes a categorical distinction between reciprocal exchange in an EEA context, and economic exchange in a post-EEA world. I can find no qualitative distinction, it is one of scale and complexity. There is no principled difference between the voluntary division of labour activities between hunting and gathering, between toolmaking and hunting, between protection from predators and childminding, within an intimate group of individuals, and between mutually-agreeable trades between people less intimately acquainted. Economic exchange – trade- whether barter or facilitated by a medium of exchange – is no more than the extension of reciprocal altruism – you scratch my back and Ill scratch yours – the same ‘co-operation to mutual benefit’ that makes up th emodern market in all its complexity.
the difference that arises is an institutional one: Within a small intimate group, there is no need for institutions like money, and detailed accounting, because the human brain is configured to carry up to some 130 individual relationships, and up to that number, it is easy to keep track of who did what for and to whom, and while some compassion and empathy makes allowances for those injured or unfortunate , those free riders who do not pull their weight are swiftly pressed to shape up or ship out. these collections of reciprocal assistances are given far too little credit – for wealth generation and the co-operative creation of positive-sum value, albeit modest, began before our forebears were even human!
this arrangement breaks down when co-operation is required between strangers, and this is where th erise of social and market institutions emerged to close the gap. Trade between strangers required institutions to forestall free riders and assure bona fide reciprocity, and it began with direct exchange between less-than-intimate associates, which was later extended to monetary exchange, which is no more than an institutional accounting mechanism to keep track of th evalue one has placed in the hands of another, pending the reciprocation. The money money in anyones hands at this point merely represents his claim against the other members of society for value he has given, but which has not yet been reciprocated.
YTTYhe folk economics that gives rise to the general hatred of th eextremely wealthy arises from th efact that people can not readily SEE the value that th erich person has placed in the hands of others. (the prevalence of wealth from the exercise of power and rentseeking doesnt make this any easier because there is no way the average joe can clearly see who has generated value commensurate with his wealth, and who has merely appropriated someone elses work, but I digress….). But it is telling that while many people do not begrudge the wealth and celebrity of their favourite movie and music stars, those same people despise your average CEO for his wealth – because while they can see th eoutput of George ZClooney, they cant directly see what value Jack Welch has put in their hands.
* Rothbard’s phrase, he used it in reference to Keynes.
great post.
‘If people trusted economic theory to professional economists, their economic ignorance would be as harmless as their ignorance of most other subjects.’
Yes, that was ludicrous and is the kind of statement that if made by Krugman would spawn a blog post here saying how ridiculous it was.
I’ve always been interested in the economics of a hypothetical prehistoric society, and the way I envisioned it is far different from what is said here. I gather that the substance of this piece was put forth by Paul Rubin, and why I wonder how much research he put into it — I, admittedly, have conducted little research of real value. Nevertheless, I feel that the differences are also a matter of interpretation.
A hunter-gatherer society does not imply that it was a zero-sum world. A zero-sum exchange is one in which one gains, while the other loses. One man hunting an antelope does not represent a zero-sum exchange, because at that point there was no exchange taking place. In fact, the following contradicts the last sense of the above quoted excerpt,
This describes a non-zero-sum game. Person B accepted the terms of Person A, who held the food, because it benefited him.
This is what occurs today, and it doesn’t imply that we live in a zero-sum world. The “wealthy” person, in this case the man who can bring home the most food, takes a bigger piece of the pie because it provides him an incentive to go out and hunt. If the “pie”, or the total stock of hunted food, was distributed equally (as you simply by calling such a society egalitarian — and so, again, you are contradicting yourself) there would be no incentive to maintain the size of the pie the next day ,and the day after that, and there would be no incentive for people to develop new techniques for bringing food home.
This income inequality is one of the fundamental principles of economics, and what provides an incentive for entrepreneurship and innovation. It is the mark of a non-zero-sum game society, regardless of how extended the division of labor is.
In our present society, does the fact that some men never mate because they are uninterested in the girls they meet mean that we live in a zero-sum world? I mean, maybe had another man not mated with other women, the first individual would have met a girl he was interested in.
A better example: if I were to find a gold mine and claim it as mine (private property, after all) and then decide to use said gold to make jewelry for myself, do I unfairly deny the rest of society of that gold?
What you are advocating, in fact, is a socialized society, in which the average needs of all men are met by depriving others of their own needs and abilities. What responsibility is it of individual A to guarantee individual B a mating partner? None. But, this is not a zero-sum game.
The problem was not that our brains are programmed for a prehistoric society, or that prehistoric society was zero-sum. No, prehistoric society worked by the same fundamental principles ours does today, except that it suffered from a poor division of labor and as such society was much poorer than it is today. The “problem” is that man is programmed to get what he wants — i.e. rational action — and so when an individual can’t get what he wants through mutual exchange, he will get it through coercive action if he believes it will benefit him (the benefit of the other man, at no time, is held in consideration — even in modern day; this explains why men so eagerly join the ranks of bureaucracy).
It seems to me that this essay is riddled with some economic confusions, even though the overall point is more or less agreeable (that economic education is important as long as we live in a society where the few can hold up the rest of society, thanks through the mechanism of government). Nevertheless, I agree with others that giving economic education a bigger role than that already allotted to it by the division of labor is just as bad as any other type of social engineering — although, I recognize that this is probably not what you meant to imply (but is an interpretation that can be derived from your essay by a non-anarchist or perhaps a borderline libertarian).
Nevertheless, more emphasis should be put on the fact that given the opportunity to benefit from such an action, another man would willingly coerce another into giving him what he wants. This is why men so readily coerce the entirety of society through government to guarantee wages, employment, and other benefits. Therefore, the lesson is not to change human psychology through education, rather to deprive men of channels of coercion — the biggest of them all being the state.
I think I follow your argument here and I would agree with most of what you said, but I don’t know that it explains one fact that his position make some sense on, which is why people are given to accepting these coercive acts and not going against them, but going along with them instead.
So while I think you have a perfectly valid explanation for people’s desire to use coercion to make gains where voluntary trade doesn’t allow for it, I’m not sure this explains why people who have coercion used against them go along with it.
Do you think that’s entirely due to societal education of the person or do you have an alternative explanation? I honestly don’t think it’s just society that reinforces that, though I have no scientific reason for such a conclusion.
The other reason I’m not fully on board with what you’ve said thus far here is that it implies that everyone who seeks interventionism is a person who is inclined towards coercion to make gains, while I think that many people really do believe it is altruistic (helps others rather than helps them personally).
Matthew,
What choice do they have? For example, if a thieve holds a gun to another man’s head, the man has no choice but to accept this form of coercion because he values his life over what the thieve wants. If the man being robbed believes that no other action will bring him as much benefit, at a relatively low cost, than accepting the violence, then it would simply be irrational to not accept that course of action.
You might as well ask most anarchists that frequent this blog why they accept the existence of the state? At this point, for these same people it just wouldn’t be rational to overtly contest the coercion.
I believe that coercion is methodologically rooted out with increased standards of living (regarding economic growth and the relevance of the state, see this), because as standards of living increases, along with an extended division of labor and greater competition, it is within more and more people’s interests to interact with others through non-coercive voluntary exchange (because it is more and more within the ability of those being coerced to put up sufficient resistance as to make the coercion uneconomical).
So, I don’t see the problem as one of psychology, rather one shaped by standards of living.
I agree, and know many people who do, but they still seek to use coercion (interventionism) to achieve an ends which would otherwise be impossible to achieve. One can be a utilitarian and/or egalitarian and still believe in the use of coercion. They just believe that the use if said coercion is justified by the ends (or that the end justifies the means).
Is it your view that the majority of people support coercion, or that they really don’t see it as coercive at all? What I see is that when many people think about paying taxes, they typically think of it as something that is their patriotic duty. They may disagree with the government on some things and believe it should be more limited (or bigger) but I think many people aren’t thinking of it as being “forced.”
Most people don’t have an awareness of anarchist thought. When I first heard the statement, “taxation is theft” it sounded odd and radical (It made sense, but wasn’t immediately acceptable without further thought).
I personally think we can make some gains by convincing more people to “see the violence inherent in the system.” I don’t think everyone sees it as it is. But I can’t imagine that people don’t see this if there isn’t some reason for that outside of education, since it affects so many people of different cultures.
Matthew,
I’m not sure how most people see coercion. I know that most people would probably claim that government intervention (as opposed to calling it coercion) is a justified evil, and therefore perhaps not an evil at all. Perhaps most people believe the consequences of a free market to be more evil than the consequences of interventionism, without realizing that the consequences of a free-market are generally utilitarian.
As such, I agree that perhaps many people don’t see it as an issue of force or coercion, but only because they don’t see such ideologically-loaded terminology as particularly relevant. If you were to present the question to them, whether government is coercive or not, I think that under our strict definition of the word they would come to agree. But, then they would say that it was justified by the ends.
I think our best bet is to make more and more people realize that government interventions don’t usually have the results people expect them to have. Or, find a way to remove the mechanism by which the ignorant can oppress the masses; i.e. government.
“I think our best bet is to make more and more people realize that government interventions don’t usually have the results people expect them to have.”
Most people aren’t that interested in economics, wouldn’t understand it if they were, and, besides, expect their representatives to do the research necessary to make sure their decisions don’t have unexpected outcomes.
“Or, find a way to remove the mechanism by which the ignorant can oppress the masses; i.e. government.”
Which would be difficult, given that some form of government is currently thought necessary by most people.
I think the best way of convincing people that the government should be reduced in size is to focus on the elitism of the people in government. People hate it when other people act like they know better than them what they should do, how they should act, what they should eat, etc. Even when the elitists are right, many people still can’t stand it. In other words, if you want to convince the common man, don’t write learned discourses targeted at other intellectuals; play the populist Tea Party angle. Of course, if the people you are trying to work on happen to think that some government is necessary, then cutting them down for thinking this will probably be counter-productive.
Any notion of a zero-sum restraint strictly forcing submission, exchange, coalescence, et cetera to group pressures and/or the endurance of resource scarcity, relies on an assumption that migration was not an option. There’s a bias toward a conceptually closed-system in the article and parts of the subsequent discussion.
Prior to the agricultural revolution and subsequent civilization development, there were few constraints preventing an individual, or group, from splintering away from oppressive group dynamics or limited resources. This roughly varies inversely with population growth over time, but open territory was abundant throughout much of human evolution. Yes, there are a variety of ecological pressures that preclude us from installing a revisionist Paleo-Utopia, but we also have the obvious evidence of migration and expansion to demonstrate that this strategy was available and utilized. With this light, social contracts in the EEA would have been almost completely optional. The implications of this are many and failure to integrate them will erroneously distort the adaptive pressure of group involvement on evolved psychology. The degree of error is certainly up for debate.
WIebe’s article is interesting, but he’s trying to tackle a very difficult subject. Part of his problem is he has limited understanding of evolutionary psychology.
THat’s not really surprising: he’s an undergraduate economics major. He probably took evolutionary psych as part of his science requirements for a Liberal Arts degree. I actually studied the subjects in a somewhat reverse order: I was a college biology major, went to grad school for molecular biology (dropped out), but then went to law school and earned an MBA.
Consequently, I studied economics well after I studied sociobiology (note: this discipline originated as a branch of animal behavior biology called sociobiology, then was adopted by psychologists and taught as evolutionary psych). WHen I first came across economics, I immediately thought that a) economists thought a lot like sociobiologists, and b) better knowledge of sociobiology would help economists understand market behavior.
The first thing to understand is that economics is actually a subset of ecology: how a species interacts with its environment to promote its own survival. Economics is how human beings interacts with their environment, but its far more complex than animal ecology. Also, human beings can radically CHANGE their economic relationship with their environment within a short period of time, while animals really don’t do the same thing.
What Wiebe gets right is that, often, people who consistently make non beneficial economic choices, are generally operating to maximize biologically driven interests. For example, a young man can make the (seemingly) irrational economic choice to heavily leverage his financial future to buy a lot of expensive consumer items today. That behavior makes little economic sense, but could make perfect biological sense: he’s could be trying to signal himself as a dominant male and thus gain a mating advantage with women (helping him maximize his evolutionary goal of getting his genes into the next generation). He may or may not be consciously aware that this is his ultimate goal.
Wiebe confuses the issue with his “alturistic” and “selfish” behaviors. What he apparently missed, is that evolutionary psych generally holds that true altruistic behavior is a myth or a misdirected behavior. When behavior appears to be altruistic, it generally has some evolutionary benefit that is not immediately apparent.
This basic concept comes, again, not directly from human studies but animal behavior studies. Many animal behavior experiments studied alarm calls to warn the group against predators. Biologists wondered why animals gave alarm calls because, while the alarm call decreases the risk that any of the herd gets consumed by a predator, it also draws attention to the animal giving the call (thus increasing the individual capture risk). The biologists viewed this as apparent altruism: benefitting others while harming the animal’s own survival interest).
However, biologists solved this puzzle by studying the genetic investment of the individuals giving the alarm calls. Animals are far more likely to give alarm calls if they have many children in the herd. Alarm call frequency is directly related to how much genetic investment the animals have in the rest of the herd. THus, the alarm callers are protecting their genetic investment in the next generation.
However, behavior is a little more fuzzy that this model makes it seem. For example, at times, single males will make alarm calls, even though they have little genetic investment in rest of the herd. But, the general trend is clear: alarm calls are more likely to come from females with children.
WHen true altruism occurs in nature, biologists often view it as “misdirected behavior”. Misdirected behavior is behavior that actually doesn’t benefit the evolutionary interests of an orgamism, but actually sits CLOSE to or is related to a beneficial behavior. Thus, the organism reacts to a stiuation in a way that is usually beneficial, but isn’t really beneficial in a given circumstance.
We can get a concrete example from the plot of the movie “Titanic”. Jack sacrifices his life at the end of the movie to save Rose. This action makes perfect evolutionary sense, since Jack had sex with her earlier and thus has a “lottery ticket” chance of getting his genes into the next generation by saving her. This choice could maximize his survival of his genes (depending on his estimation of his future mating chances).
But, suppose Jack had never had sex with Rose? Pure evolutionary biology would then suggest his best course would be to save his own life and let his propective mate die. Yet, in practice, he could likely have been so emotionally connected to Rose that he considers her psychologically equivalent to someone he’s had sex with, and thus could sacrifice himself to save her (and still be operating in response to his evolutionary interests).
That would be an example of “misdirected behavior”.
In this article Wiebe considers helping poor members of a hunting gathering tribe survive as “altruism”. Yet, theory strongly suggests that’s not really what’s happening. Again, we can look to animal behavior studies for understanding.
Multiple studies show that the number of male lions in a pride is determined by the number that best allows the pride to hold its territory (and females). Thus, dominant males will allow subordinate males to share in mating opportunities even though it seems they would be better served to keep all the females to themselves. But, a lion pride needs numbers to fight off competing groups of male lions.
In the case of human tribes, altruism toward currently weak members is either driven by 1) genetic relations in the case of family or, in the case of unrelated individuals 2) the need to maintain sufficient numbers to hold the tribe’s territory vs. competing tribes.
The thing is, the ineraction between sociobiology and economics is a massively complex topic that really can’t be addressed in an article this short. Heck, you can barely even scratch the surface. And, it doesn’t really even exist in academic literature, because there really aren’t many people who have sophisticated understanding of both subjects.
I’m sorry man, but this seems like a whole lot of gobbledygook to me. It’s totally based on genetics. As if all we’re here for is to pass on our genes. What if genes don’t work the way the consensus believe they do? Or they’re not as important as the consensus believes they are? What if there’s more to life than just all the individual parts that make it up?
“For example, a young man can make the (seemingly) irrational economic choice to heavily leverage his financial future to buy a lot of expensive consumer items today. That behavior makes little economic sense…”
i’d take issue with this statement. personal priorities and preferences are purely psychological, nothing to do with economics, the use of scarce means to achieve desired ends.
I agree. Mainstream economists tend to model cost-benefit analysis by comparing marginal benefits versus marginal costs. I think the more accurate Austrian portrayal of rationality is comparing marginal utility versus marginal disutility, as this suggests that utility goes beyond material wealth.
costs are defined as disutility (or “negative utility”), even in mainstream economics.
Perhaps I should have said, “makes little sense from a wealth-building perspective”
JohnnvV13,
Great post… I have some background in evolutionary studies and you were bang on (although I agree with your subsequent correction regarding “economic sense”). I have often considered seriously studying the sociobiology/economics connection, but I can’t think of a way to do it that would be economically viable give the aforementioned lack of a field dealing with it.
I don’t have anything against sociobiology per se, but it doesn’t have anything to do with economics, at least from the Austrian point of view. As Newson pointed out, “personal priorities and preferences are purely psychological, nothing to do with economics”. Austrian economics is interested in the “logic of action”; i.e. what would happen in the large given certain actions that people might take. It doesn’t care at all why people take the actions that they do. And from a praxeological point of view, it doesn’t matter why, because certain actions will have certain effects, no matter what the evolutionary/psychologicall cause of the action (if any).
Since I have not invested much time in evolutionary psychology (or sociobiology) I offer the following points that lead me to take a skeptical view of this article:
1) What evidence exists that psychological (or social) preferences can be transmitted genetically? Since I doubt anyone has identified a social or psychological gene in the genome or epigenome, I am guessing evidence may come from the analysis of separated twins. Even so, how can this preference matching be quantified and made statistically significant beyond mere chance?
2) If ancient social experiences are retained in our genetic code, how are they to be weighted in present significance according to there remoteness and duration in time? The human experience over the last fifty thousand years may carry only negligible weight as compared to the millions of years of our hominid (or even pre-hominid) social experience.
It seems to me that if we want to use zero-sum conditioning as a means to explain folk economics we don’t have to go back any further than our own childhoods. The zero-sum condition is approximated within groups that have consumers but no producers. Doesn’t this exactly describe the situation with other children when we were kids?
Jack, I know what I’m talking about is difficult to wrap your head around, plus its completely counter-intuitive. The first objection most people have is, “people don’t think that way, at all. That’s not how we make decisions. We make decisions based on our ideology.”
But, people generally accept that emotions factor into decisions, not just pure rationality.
That’s the level I think that evolutionary psych operates: it helps explains WHERE emotions come from. Or, to put it in abstract terms: ideology tells you that IF i do A, then B is the likely result. Then we base our actions on the results we consciously desire.
What evolutionary psych helps to answer is: why do we want B in the first place?
ANd, isolated actions can be entirely contrary to evolutionary logic. If you like to indulge in analogies, here’s another one: think of behavior like a pinball machine. There are all kinds of forces at play that can drive the ball in almost any direction at any given time: flippers, bumpers, chutes. Trying to predict which direction the ball will be travelling more than a few seconds in the future is a pretty futile endeavor.
But, think of evolutionary inlfuences as something like the tilt of the table. Gravity will act to pull the ball down the drain, given enough time. While we can’t know where the ball will be going at any most future points in time, the overall trend is predictable: the ball will go down.
I am not saying that evolutionary interests determine all of our behaviors, or that people can’t live their lives in an entire contradiction of their evolutionary interests. IN fact, we know they do because we have examples like Roman Catholic priests who choose to be (mostly) celibate.
I’m just saying the evolutionary interests will show you which way the behavioral current runs in the river of life (to use another metaphor). As for the “purpose of life” question, that’s a philosophical debate. But, I will point out that people who consistently act agaisnt their evolutionary interests are significantly less successful in getting their genes into the next generation, and hence, fewer people will act similarly in the future (presuming we give the slow process of evolution sufficient time to operate).
btw, i liked your slant on jack’s titanic “sacrifice”. i might even watch the movie now.
It seems to me that you’re speaking only about passing on genes as the sole mechanism and driving force for evolution and I believe we’re more than just the material pieces that make us up. From what I’ve learned genes are a tool chest to help one get through the world, so depending on what environment one finds one’s self in dictates what tools one would use. Then perhaps the knowledge of one’s environment would be more beneficial to pass on than just the genes. In our environment a good strong work ethic would be beneficial to a successful life…is there such a thing as a “work ethic gene”? Do our genes influence our behavior or does our behavior influence our genes? Perhaps it goes both ways?
I’ll have to read more about Evolutionary Psych to get a better feel for it, but from what you’ve written it just doesn’t feel quite right.
Jack, it indeed “goes both ways”. Learned behaviors can affect gene frequencies within a gene pool.
I’ll give an illustrative example. Lets suppose we have tribe A and tibe B. Tribe A has learned to make and use spears for hunting. Tribe B has only learned how to use clubs. Now, presumably, “spear-chucking” skill depends on a number of genetic attributes, including: spacial relationship recognition, good origin and insertion points around joints to enable throwing distance, hand-eye coordination and a myriad of other phystically determined traits. Presumably, using spears for hunting gives successful tribal members numerous advantages, including more successful hunting excursions (yeilding more food), status advanages for good spear chuckers and better mating opportunities. Isolate tribe A and tribe B long enough, and tribe A members will have considerable genetic advantages with respect to spear chucking than tribe B (who would presumably show selective advantages related to club use).
In human beings, who have extensive ability to communicate and pass learning between generations, individuals who greatly contribute to the storehouse of knowledge can have profound effects on both how the human species lives, as well as the genetic composition of their society’s gene pool, without ever passing on their own genes.
I fear the author may be guilty of promoting folk anthropology in the interest of fighting folk economics. Or at least propagating ideas about hunter-gatherer societies which may not be nearly as universal as believed.
From attending some university courses and reading various ethnological and historical reports of hunter-gatherers, it doesn’t seem to be the case that most of these societies are polygynous. Likewise their economies don’t seem to be all that simple or primitive. The concept of venturing forth to seek new territories, pioneering new hunting, gathering and trading techniques, must be at least as entrenched in our instincts as the desire to sit on our backsides and treat the exploitation of resources in our immediate area as a zero sum. The concepts of capital accumulation (although not known as such) are well known, and I suspect that even the charging of interest is (or was) fairly common among these people. There is even an example of intellectual property in a pre-European native American tribe – the Huron Indians of Canada would seek to reward the pioneer of any new trading route with a cut of all trade revenues which were thereafter obtained on that route (though in an anarchic and voluntary spirit, not with a justice system as such).
Nevertheless I strongly commend the author for seeking answers in human evolution to the puzzle of the attractiveness to humans of bad economics. I recommend going directly to the first-person ethnological and historical studies of (so called) primitive societies. They are numerous and highly readable, and I can practically guarantee that you will be astounded at the intelligence and economic sophistication demonstrated by these people. Better to trust the accounts of eyewitnesses to human hunting and gathering by non-economists and non-political scientists, than to rely on “meta studies” or overviews.
The level of polygyny would have varied greatly relative to multiple factors. However, your point about almost limitless (throughout much of the EEA) territory cannot be understated. It completely negates the closed-system bias required to force zero-sum rules on ancestral humans.
Regardless, it seems like a pretty big leap to project capital accumulation and interest back any farther than the late-late-Upper Paleolithic at best. That it then placed enough adaptive pressure on us to impact our psychology is rather speculative.
I agree with the critique of this article; however, there is something to the sociobiology/evolutionary aspects of humanity (and all of nature) and economics. There has to be connections between them. Ecology and free-market economics have very interesting similarities, from competition for resources, to adaptive mechanisms for problem solving, and finally, to the substrate effect – increase a particular substance or molecule, and something in nature will be able to use it for something via consumption. The incredible, self-correcting, cyclical nature of life on Earth, and interactions in the free market, are very similar.
Economy
If one translates the Greek “oikonomos” as house rules then economics is more akin to law than science. Take the rules to a game like soccer or basketball. Those rules are not the result of scientific processes but a concerted effort to create a game that is fun to play and watch. Games that allow cheating the rules are unfair especially to those that wager. Referees are tasked with allowing the play to continue unless an infraction occurs.
Our game is the voluntary contract between two parties and contract law provides that rules for generating a contract that is fair and workable. At least that’s the goal. Generations have honed those rules to provide a mutually beneficial game where each one loses something they have in order to gain something they want.
Where does science enter this “game”? Is law an art? Is the individual relying on art, science or luck to determine what they are willing to lose in exchange for what they want to gain?
Evolution produces what survives, but what will help us prosper? Can science tell us? Or is it limited to measuring what is objective? Science can tell us what we need like air, water and food. Can it measure what we want and how much we want it, or is it limited to counting what we traded? In human action, free will creates uncertainty in efforts to predict future behavior based on past actions.
Adam Smith wrote “The Wealth of Nations” but was his motivation to protect the wealth of individuals? To do this he has to convince national powers that their prosperity depended on voluntary markets guided by the “invisible hand.” If everyone is able to mutually benefit, is that prosperity? Is this a question for science or philosophy?
But I am not an Austrian economist, I’m from Michigan and an engineer by training.
Valuation is ultimately irrational, and cannot be explained by the so called “positive” science.
Economics does not judge if final values and ends are correct or mistaken – it only cares if the means used to get there are correct.
@Baten:
“it [economics] only cares if the means used to get there are correct.”
What? this is new to me. Economics cannot actually give you advice about what tool is the best or most efficient one for a certain task. Economics is purely descriptive and value-free. It helps explaining why certain phenomena exist (institution, market prices, entrepreneurial activity, etcetera) but it is not at all a prescriptive science in the sense that you can consult an economist who tells you: if you pursue the end x, then you should apply means y.
If fact, economists cannot contribute to these questions and usually lead that to specialists. I give you some examples:
a) you want to build a bridge – you are best advised to ask an engineer
b) you are sick and want to get better – you better ask a doctor
c) your relationship broke and you want to fix it – you might ask specialists in the field of couple-counceling, psychologists, etcetera
d) you want to know how to organize your company – you will NOT ask an economist, but instead a business consultant who might be ignorant of aprior-misesian theories but a far better advisor with regards to market analysis and management tecniques.
So, I wonder what you misesian praxeologists really mean when you say economics deals with the relationships between means and ends. Actually I find that economics (not even austrian) can contribute to the question what means to choose
Hayekian, would this excerpt from Chapter 3 of your namesake’s The Road to Serfdom help, or is your question directed along other lines (the last para is the kicker, but it needs the context I think):
“There are many people who call themselves socialists… who fervently believe those ultimate ends of socialism [social justice, etc.] but neither care nor understand how they must be achieved, and who are merely certain that they must be achieved, whatever the cost. But to nearly all those to whom socialism [as social justice] is not merely a hope but an object of practical politics, the characteristic methods of modern socialism [as social justice] are as essential as the ends themselves. Many people, on the other hand, who value the ultimate ends of socialism no less than the socialists refuse to support socialism because of the dangers to other values they see in the methods proposed by the socialists. The dispute about socialism has thus become largely a dispute about means and not about ends…
“… The situation is still more complicated by the fact that the same means, the “economic planning” which is the prime instrument of socialist reform, can be used for many other purposes. We must centrally direct economic activity if we want to make the distribution of income conform to current ideas of social justice…
“It may, perhaps, seem unfair to use the term “socialism” to describe its methods rather than its aims, to use for a partciular method a term which for many people stands for an ultimate ideal… Yet…, it must always be remembered that socialism is a species of collectivism and that therefore everything which is true of collectivism as such must apply also to socialism. Nearly all the points which are disputed between socialists and liberals concern the methods common to all forms of collectivism and not the particular ends for which socialists want to use them; and all the consequences with which we shall be concerned in this book follow from the methods of collectivism irrespective of the ends for which are used.” (50th Anniversay Ed., pp 38-39).
That’s how I understood Baten’s post, but it may be that this is not economics but political philosophy, and so the issues raised in your post stand unanswered. Anyway I hope that’s interesting.
yes, thanx this is a good quote. But indeed you are right, this is refering to political philosophy and not economics. Economics in the hayekian framework is not praxeology (as understood by mises) but the science of coordination of wants by the means of the market. it deals with information not merely action.
The turn Hayek had in his opinions developed when hayek began to understand the implications of the arising complexity theory in physics, when he discussed with evolutionary biologists and general system thinkers such as ludwig von bertalanffy and when he recoginzed the limits of pure rational reasoning (in accordance with the philosophical debate about aristotelian logic that is entirely ignored by mises -probably due to the fact that mises simply didn’t know about it at all)
@Hayekian
Exactly my point – if you want to build a bridge, economics cannot help you with finding out why it is that you want to build that bridge. But of course, it makes perfect economic sense to choose somebody like an engineer who can show you the best means to make your bridge.
Same for all examples.
It may be that this end – building a bridge – is only a mean to something else, like trading better with your neibour. Economics cannot help you understand why you would like to do such thing, you just “feel” it is better for you – but once you establish your end of better trading with the neibour, you or somebody else has come to the conclusion that a bridge would be the most reasonable way to do that.
An so on.
you are avoiding my question entirely. Noone can tell you what is the best solution, since there probably are no optima at all in the existing universe. this is maybe one of the most interting facts that evolutionary theory showed us: that there are no optima, no static finalitites, only viable processes.
Even the assertion that it is best to ask an engineer in order to build a bridge is a simple guess, nothing more. It might even be better to study a book on arquitecture and statics on your own behalf instead of asking the engineer. A priori you cannot tell, what action is the best, even if your end (builtind the bridge) is a given data, you still cannot tell which means is the best to achieve it. It is all trial and error and we induce from past experience
That is a very interesting article. Though I have doubts about some points I agree with the general idea that we are born with an innate set of economic biases, which is probably the result of evolutionary adjustment to living in hunter-gatherer communities.
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I believe history demonstrates that business tends toward unethical or unlawful activity, frequently both, if existing laws are not surely enforced.
Business is not self regulating moral activity as we saw in the Milkin, Boskey era and again in the countless schemes exposed in the housing hustles of this decade.
American business excels when it is assured that prison terms await those who engage in illegal activity. At that point the public can trust the markets and their results. Otherwise business leaders are viewed as being no more trustworthy than politicians.
Economy is a misnomer since central banking and the federal reserve took over. The currency system used in the world today (legal tender) is entirely based in debt. Every dollar printed comes with a percentage called interest. if every penny owed the banks was paid back their would be no money left in circulation and the interest would never get paid. in other words we live in a state of perpetual debt. Economy means; the efficient use of resources and perpetual debt is not an efficient use of resources it is slavery! did they teach you that in the church of economic wisdom? You sir need to try going the school of common sense. Any grade school child can tell you that slavery is wrong and debt is the opposite of economy!
what an absolute load of bollocks…. bet u r top of the class at manitoba u – wait where the feck is manitoba??
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