Free Markets and the Bastardization of Charles Darwin
FILED TO: Economics
By Ben Cohen: I had a conversation with a conservative friend over the weekend about the different economic philosophies being practiced in the US and Europe, and disagreed on which one is working. My friend argued that the only way out of the gigantic mess in Europe was to press on with austerity, while I argued that Europe should adopt the American model of government stimulus spending.
I don’t want to say that I ‘won’ the argument, but I did make the point that we are getting the benefit of seeing two economic theories being put to the test in a very real way – and the results couldn’t be clearer. Government spending in the US is working (the economy is growing) while austerity is failing in Europe (the Spanish and Greek economies are contracting). My friend countered that regardless of whether austerity was working, it was still the right thing to do, and proceeded to outline the moral argument for free market capitalism.
As the conversation evolved, I began to probe my friend on the intellectual underpinning behind his steadfast belief in the morality of markets. And what I discovered was slightly unsettling.
Libertarianism is based on a circular logic that when you dig beneath the rhetoric, is completely devoid of human emotion or common sense (in complete contrast to my friend, who is warm hearted and highly intelligent). Libertarianism works on the theory that absolute freedom is the only moral way to organize an economy. In libertarian philosophy, the purity of the system is so perfect that the only reason for failure can only come from the imperfect practice of the theory. If deregulation doesn’t work, you must deregulate further because the only reason for failure must be because you didn’t deregulate enough. This can of course go on forever. Purists will never be happy – there will always be new ways to cut spending, reduce the size of government and introduce privatization.
My friend’s argument centered around the idea that selfishness is the overriding principle that drives human beings – we are inherently greedy, self interested creatures who look only to maximize material, social and sexual gain for themselves. Our economic system should reflect this principle from a moral point of view because selfishness leads to the proliferation of life, and therefore in an economic sense, money and wealth.
If you read about evolution and genetics, this theory proves to be not only incomplete, but inaccurate. Humans are most certainly selfish and do all sorts of nasty things to get ahead of their social group. But they are also genetically wired to cooperate, sympathize and share – all equally powerful drives that are as much a part of our DNA as the desire to cheat, steal or lie.
The mistake I believe comes from a misunderstanding of modern evolutionary theory. Richard Dawkins showed in his breathtaking book ‘The Selfish Gene’ that evolution actually happens on an individual gene basis – that every gene’s mission is to replicate itself at all costs. Dawkins argues that the emergence of large, multi cellular organisms were the result of individual genes banding together in order to maximize the chances of individual replication. This then extends to families, larger groups (herds, shoals, tribes etc) and on to species. Human beings are essentially vessels of self interested genes that have found success in working together, and groups of humans essentially mimic this behavior on a larger scale. They work together to maximize the chances of survival for the group, and by consequence, themselves. Purely selfish behavior can often be counterproductive in nature, and as a result, cooperation emerges as a strategy for survival.
It is quite a difficult concept to comprehend – that through a selfish process emerges mutualism and cooperation, and it may seem quite unpleasant to think about. But the genes responsible for sympathy, cooperation and sharing are very real, and despite the process that created them, they lead to extraordinary acts of generosity and kindness that are a hallmark of our species. There are many cases of completely selfless acts that lead to no tangible benefit to the individual (and may not be useful from an evolutionary point of view). It is simply a characteristic of the human animal.
Free market capitalism is a bastardization of this theory, and completely discounts the complexity that arises out of the evolutionary process.
To create an economic system that operates on the same basis as the building blocks for life is complete madness. Firstly, the two are completely unrelated – an economic system should work to create wealth for people, while evolution is an amoral and blind process that creates and destroys life in equal measure. Secondly, the process of evolution has created incredibly complex social structures that are the result of billions of years of trial and error. Human social structures have developed millions of ways of organizing themselves, and to assume that there is one perfect system defies logic and thousands of years of history. There are many workable systems that help humans maximize material wealth, and they are highly dependent on the geography, culture and size of the population. I wouldn’t presume to have the answer on how to best organize our economy (I think much of it comes from experimentation and trial and error), and one should be highly skeptical of anyone who claims to have a perfect system. I personally believe that in a modern industrialized nation like America, some form of social democracy would work best. This could not be applied to 16th century Japanese society or to tribes in Papua New Guinea, but it would make most sense for Americans right now given the huge inequalities, instability of the economy and rampant poverty that define its culture.
Free markets have historically imploded, and for good reason – the principles work against the totality of human nature as they amplify greed and selfishness while ignoring our sympathetic and cooperative side. From a logical standpoint, any system built on pure selfishness cannot remain free over long periods of time. Once there is inequality in any system, those at the top rig the system to prevent the loss of their wealth by turning free markets into crony capitalist states that work in their interest (the US and post Soviet Russia are classic examples of this). The only way to prevent this is through government regulation, and of course if there is regulation, it cannot be free.
This contradiction is built into Libertarian philosophy, and the only way around it is to accept compromise. And for many adherents to the theory, this is unacceptable. There can be no compromise in Darwin’s theory of evolution, and by extension, no compromise in our monetary system.
The final point I made to my friend was that an economic system designed for human beings should attempt to reflect our nature (or at least what we understand of it). A system built on one principle at the expense of the other is destined to fail, and there’s no need to take one side over the other. Mixed economies seem to do quite well in today’s economic climate (look at northern Europe), and that’s probably because their guiding principles more accurately mirror the results of millions of years of evolution, rather than the process itself.