Darwin Versus “the Invisible Hand”, and a Crappy CommutePosted: October 28, 2011
I have a long commute to the lab everyday. It’s only about 12 miles from downtown Brooklyn, where I live, to Flushing, where Queens College resides. However, the travails inherent to being bound to the oppressive traffic of both the Brooklyn-Queens Expressway and the Long Island Expressway often make this relatively short distance require more than an hour of travel time in the car. This morning was like many others, and I once again found myself participating in the daily burden of NYC automobile commuting (I secretly hate the eco-commuter’s mantra, “you’re not in traffic, you ARE traffic”. I love a bike commute when possible, and have done it in previous lives, but I dare you to find a bike route from Boerum Hill to Flushing that will get you to work in time to earn a PhD before 2040). To break up the time, I decided to risk a moment of texting-while-driving-extremely-slow and whip up a podcast of yesterday’s Diane Rehm show.
I have a soft spot for talk radio, and Diane has one of the best talk shows I know of, thanks to her being perhaps the best interviewer of her time (sorry, Charlie Rose). In my humble opinion she always has the best guests and the most insightful panels. A recent interview with Pat Buchanan, who was plugging his new book on the show, evolved (or juicily devolved) into an argument ranging from the relative merits and pitfalls of multiculturalism to the grimy details of Richard Nixon’s political denouement. Half of Rehm’s show features the participation of listeners via telephone, email, Facebook, or Twitter. I always find it to be an extremely interesting and informative virtual town hall meeting. The show I was blessed to cue up this morning featured Robert Frank, the Cornell economist, whose new book The Darwin Economy: Liberty, Competition, and the Common Good argues that it will be Charles Darwin, and not Adam Smith, who will ultimately be recognized as the father of economic theory. As a political news junkie, and with so much of the current political discourse focusing on the Great Recession, the prospect of a “double dip”, and the potential impact of the fledgeling Occupy Wall Street movement, I was intrigued. Also, I’m an evolutionary biologist so having Darwin being brought up certainly piqued my interest.
Frank’s argument is this: Adam Smith is an 18th-century economist widely cited for giving birth to the idea of “the invisible hand”, a metaphor for the free market that proponents of laissez-faire capitalism and those on the economic and political right so often invoke, in his famous book The Wealth of Nations. In Adam Smith’s free market, a business can invent a terrific idea or product, 0ne that people decide they really want to buy, and so the business will profit. Other firms may want to get in on the action and produce similar products with the hope of tapping into this new consumer market. Now consumers are faced with a choice, one that encompasses a payoff between the quality of a product and how much they are willing to pay for it. Businesses will compete with one another to provide consumers with the best possible products for the cheapest price. This invisible force is supposed to keep firms honest as they strive to serve their customers, and society is supposed to benefit as a whole because the overall quality of goods will rise as their relative costs will stay low. In this pure capitalist economy, businesses that do not provide quality service for low prices are doomed to fail (Frank asserts that even though Smith is regarded as the father of this theory, he had serious doubts as to the ability of those who own the means of production to remain honest. For instance, he hated monopolies and believed that banks are best as small firms who serve their local communities).
Enter Darwin. The theory of natural selection is often boiled down to simple quotes such as “survival of the fittest” or “nature red in tooth and claw”. However these are gross oversimplifications of Darwin’s great idea. Natural selection is a purely relative phenomenon, and it is not necessarily the most physically strong or savage that are the most successful. One only need to have an advantage over possible competitors, those of which are most often in the same species (also called “conspecifics”), in order to make a greater genetic contribution to the next generation (measured as “fitness”). There are many instances in which the fitness benefits of an individual are actually deleterious to the greater group (or population, or species). One example is the peacock (a lot of people say “male peacock”, but I think that is redundant. The “cock” implies a male, doesn’t it? And isn’t that why we call the females “peahens”? We do, by the way). The peacocks who sire the most chicks are the ones with the longest and most lavish tails. This is because the tails are an honest signal of parasite resistance, and females can use them to choose between the healthiest males (a phenomenon described by the Handicap Principle). However, if you are a leopard these tails are extremely handy for slowing down your prey, so long-tailed peacocks tend to not live very long, yet they live fast, producing many offspring. Since the trait of a long tail is directly related to the ability to have offspring, it persists in the population regardless of the fact that peacocks get eaten all the time. This sexual selection is a key component of Darwin’s theory and can lead to the evolution of detrimental traits.
Frank’s argument for Darwin as an unappreciated economic guru is rooted in the fact that modern capitalist economic theory attributed to Smith — in which innovation is followed by competition and the “invisible hand” works to improve the lives of the consumer class — ignores that fact purely selfish motivations can undermine the overall benefit to society.
I haven’t read the book (yet), but I intend to, and listening to Frank was extremely refreshing since the political debate rarely includes major tenets of evolutionary theory!
- Libertarians With Antlers (3quarksdaily.com)
- Darwin: A Better Economist Than Adam Smith? (pinkbananaworld.com)