Saturday, March 26, 2011

Natural Selection, Market Potpourri

First! A fabulous point on Facebook by economist, Steve Horwitz:
"People need to wake up and know the history: government regulation does not "check" the power of the private sector, it enhances it. The more power you give gov't, the more that the private sector will seek to access that power and use it to their advantage and to the disadvantage of the rest of us. Regulated capitalism inevitably becomes corporatism. And "better people" in gov't won't change this."
And... Also a few excellent comments at Hit & Run (not written by me)... directed at our old "pal" Tony, of course:
"Tony, please understand: just because you believe something, does NOT make it 1) correct, and 2) so correct that it must be imposed upon others at the point of a gun.

You say people don't want the society we're selling...then why are their armed police officers enforcing bogus drug laws on casual users? If everyone wanted your society, they'd all voluntarily stop using drugs, since it's against the law.

Why does the IRS have enforcement agents? If everyone wanted the society you're selling, everyone would voluntarily pay their taxes, no enforcement required.

Here's the thing: you think we mean to impose a stateless vision on you whether you want it or not. Nothing could be further from the truth. If you and a bunch of like-minded folks want to get together, form a community, and agree to taxation in exchange for certain public services, then by all means, feel free.

What we ARE asking is that you stop assuming that you are SO superior to us both intellectually and morally that it is your right and duty to impose your vision upon us whether we'd have it or not. Our vision allows you to form whatever community you want with like-minded fellows. Your vision imposes force upon us to comply with it, because you believe a small number of educated elites know better than everyone else how things should be run, and that they should be granted a monopoly on force in order to enact their dictates. Boiled down, that is what you believe, because that is just a non-PC way of describing bureaucratic government."
More to Tony:
"Your understanding of Darwinian theory is severely limited. It says nothing about morality or even the best surviving, because it lacks qualitative analysis. The only thing that matters is that - just like in markets - cells interact with each other and those cells produce organisms through - as Dawkins puts it - selfish genes. It is not necessarily true that species survive because of selfish behavior as you understand it with your primitive sense of morality. Mammals seem to survive because they work together. As in markets, cells interact with each other at random to produce what looks like a planned whole. Just like the creationist, you assume the market must have a designer, because without one there would be - hold your breath - chaos. In fact, altruism is a good thing for human survival and the market is the ultimate expression of voluntarism and the lack of coercion or even a top-down order. It produces wealth for billions of people without a designer. Your mind is shaped to find a designer, and if you don't, you will impose one upon it. Your problem is you are fighting against Ayn Rand. We are not objectivists. We are libertarians. There are many of us who despise Rand, because she was wrong about altruism.

Secondly, evolutionary psychology shows that voluntary exchange (capitalism) is the very trait that has allowed humans to be the ONLY species to become more prosperous as we have become more populous. You see it as selfish because you have a paleolithic morality, where sharing is seen as the top goal (this works in small units such as the family). But in a market you don't realize that the profit motive is actually benefiting you and everyone around you. You only see the selfish behavior of the store owner, not even realizing that you both benefit from the exchange. Capitalism is the only reason vast swathes of humanity were able to escape abject poverty, not coercion and state power. Otherwise, North Korea would be a bastion of prosperity. You are at war with the very thing that leads to your own prosperity.

Nevertheless, you are right that people disagree with us, but that, as I have mentioned, is a result of having a primitive morality based on a false understanding of the world around. You see zero-sum when in reality it is no such thing.

The fact that you throw around Darwin's name as some sort of emotive term to criticize your opponents is shameful and betrays your ignorance of science. Markets are like evolution. It would serve you well to gain a better understanding of both."
There's a lot to be said about each of these points... But I think that one thing I'd like to talk about more often is the connection between free markets and other spontaneously ordered processes like evolution by natural selection, language & communications, and cultural customs & norms.

It intrigues me somewhat that so much effort has been spent by evolutionary biologists fighting the crude, typically creationist-led description of evolution as "Dog eat Dog" or the notion that there is a spectacularly cut-throat aspect to natural selection... and while many people like Tony may moderately grasp this point in biology (I'm being charitable), they rely on creationist fallacies in their arguments against the market.

When Biologists talk about "survival of the fittest", they don't inherently mean that the animals which survive are the most physically tough or brutal, but rather they mean animals which are best adapted to their given environmental pressures.

In many ways, markets work exactly the same way.

Being successful in business doesn't require you to be the biggest, most ruthless, liberty-violating thieves imaginable. It requires that you are responsive to the values of your customers, and that you find a niche that few other animals businesses are filling.

Think about the Galapagos Finches.

These little birds diverged primarily in terms of beak shape, size & strength. They didn't all just go extinct, because one super-finch developed, they diversified and branched off as some birds became better at eating certain foods, and their cousins better at others. Business environments are similar... Look at my own business.

As a multimedia producer, I am in constant competition with hundreds of other talented people. There's no way I can compete on all levels with all of them... but I do have a few advantages. I care about certain ideas, and I've got a more complete understanding of a few specialized areas of study & philosophy... so I can cater to a particular market that most multimedia producers aren't interested or capable of catering to.

That's worked out ok for me... But unfortunately for people like Tony, their "Zero-Sum" mentality leads them to think the only way to be successful is to take from somebody else.

I suppose nobody should be surprised by this - since their interaction with the world is precisely that.

But now, let's tie this back to Steve's point... Most of the time, using laws to "regulate" the market is as absurd as using law to "regulate" natural selection. Eugenics is one word people have for those kinds of policies in the biological realm, and it produces some pretty bad results too.

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