Monday, July 17, 2006

The Evolution of Markets and the Spontaneous Order of Nature

As mentioned below, I recently finished reading The Moral Animal by Robert Wright, which is definitely one of the most profoundly interesting books I’ve ever read. A thought that came to mind early on while reading this is how there seems to be a disconnect among many people in their willingness to accept evolutionary thought in different realms. I will posit that “believing” in the ability of market forces to produce better outcomes is very analogous to “believing” in the theory of natural selection (Darwin was influenced by Adam Smith’s ideas, after all). Yet many people who are sympathetic to market capitalism (i.e. many conservatives) resist the theory of natural selection, while many liberals who favor the theory of Darwinian evolution have strong reservations (if not open hostility) towards the free market.

Beating me to the punch in thowing this question up on a blog was Jonathan Alder at The Volokh Conspiracy, who touched on at least half of this same idea in a recent post:

…I am quite puzzled that so many conservatives who accept the idea of spontaneous order in the marketplace are nonetheless enthralled by the idea of "intelligent design." As F.A. Hayek and other important economic thinkers explained, the order and coordination of the marketplace arises spontaneously and does not require any central planner (or intelligent designer). Further, the economic order evolves over time without any such central planning, as successful innovations and organizations displace their predecessors. Why is it that those who see no need to ascribe the existence of complex evolutionary organizational systems to a central intelligence in one sphere find the concept so necessary in another.

The whole “watchmaker” analogy always seemed pretty weak, anyway. I would just add that that reverse is also quite puzzling – why would many liberals who accept evolution and spontaneous order in nature find it so hard to accept that no omnipotent being (i.e. government) is necessary in the economy? If it is possible for many people to accept the lack of a central planner in one instance, why is it so difficult to do so in another? This is a question I don’t have the answer to, but I would like to come back to it at some point to try to get at the root of the apparent inconsistency displayed by many people on both sides of the debate.

[As an aside: Anti-capitalistic people often talk derisively about "the invisible hand" as if it is some kind of mythical creature, while failing to realize that its the same mechanism that is at work in evolution. Why do these people abhor the notion of a designer in nature (often with a good deal of superiority over those who doubt natural selection), yet embrace it in the economy (in the form of government)? It seems to reveal a certain arrogance to believe that natural selection is all well and good for nature, but the principles don’t apply in our economy, because WE can do better. Personally, I think that people who think they can design the whole economy better than the market can are supremely arrogant and tragically naïve. ]

To be provocative, let’s just say that conservatives who won’t buy evolution are like communists (“we need a central planner to design this complex system!”) and liberals who won’t buy market capitalism are just like proponents of “intelligent design” (creationists, in other words). That should get everyone on the defensive. For the record, I believe in natural selection AND free markets. I don’t like central planning in nature, so why would I want it in my economy?


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