Economics

What Paul Krugman Needs to Know About Evolutionary Economics

Standard economics meets evolutionary theory

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By David Sloan Wilson

After complaining that economic soul searching taking place since 2008 ignores evolutionary theory, I was made aware of Paul Krugman’s 1996 address to the European Association for Evolutionary Political Economy. I had read it before but upon refreshing my memory I see that it provides an excellent opportunity to reflect upon changes that have taken place in my own field of evolutionary science during the last two decades.

Krugman’s address, which is reprinted here with his permission, was titled “What Economists Can Learn from Evolutionary Theorists”. He begins by acknowledging that his audience might know more than he does about evolution in relation to economics, but then demonstrates an impressive command of the evolutionary literature, including major figures such as George C. Williams, William D. Hamilton, John Maynard Smith, Richard Dawkins, and Stephen Jay Gould. He confesses to being an “evolution groupie”, even to the point of reading the primary literature and not just popular accounts.

What is the take-away message of evolutionary theory for Krugman? Mostly, that it affirms “standard economics”, at least in the form that he practices. In his own mind, he is “a maximization-and-equilibrium kind of guy” who has “pushed the envelope, but not broken it”. He identifies four components of standard economics:

1) It’s about what individuals do. “Methodological individualism is of the essence”.

2) The individuals are self-interested.

3) The individuals are intelligent and maximize their self-interested utilities.

4) Economists are concerned with the interaction of such individuals, especially the invisible hand conjecture that the intelligent pursuit of self-interest benefits the common good.

Krugman saw evolution as a “sister field” in these regards except for the third component: “The main difference between evolutionary theory and economics is that while economists routinely suppose that the agents in their models are very smart about finding the best strategy…evolutionists have no qualms about assuming myopic behavior. Indeed, myopia is of the essence of their view.”

In my view, Krugman got many things right and a few things wrong in his assessment of mainstream evolutionary science in 1996. He was right that self-interest was treated as a grand explanatory principle. He was also right that evolutionary theorists make use of equilibrium and optimization models, just like economists. The biggest thing that he got wrong concerned the fourth component. Economists assume that when self-interested individuals interact, they are led, as if by an invisible hand, to benefit the common good. Most evolutionary theorists in 1996 would have called this assumption “naïve group selection”.

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Darwin realized that selection among individuals within groups seldom resulted in behaviors that would benefit the group as a whole, which required selection at the group level. In his 1966 book Adaptation and Natural Selection, George C. Williams agreed with Darwin’s assessment and added that between-group selection, while possible in principle, is almost invariably weak compared to within-group selection. As a result, Williams strongly asserted that group-level adaptations do not, in fact, exist. There is no invisible hand that permutes self-interest into the common good. Instead, life’s a bitch and then you die. Or, as Williams once put it, “Mother Nature is a Wicked Old Witch”.

Inclusive fitness theory and reciprocal altruism offer an assessment that is only a little less bleak. They explain how cooperation can extend to genetic relatives and unrelated individuals trading favors at a small scale, but can’t explain how larger single-species societies or multi-species ecosystems evolve to function as corporate units.

The idea that functional organization exists at lower levels of a biological hierarchy, such as individual organisms, but then ceases to exist at higher levels, such as social groups and ecosystems, was deeply antithetical to the Christian worldview, which assumed that a universe created by God must be harmonious from top to bottom. While Darwin was somewhat muted on this theme, his bulldog Thomas Huxley gave it full throated expression in his essay on Evolution and Ethics published in 1893. Huxley was emphatic that evolution doesn’t make everything nice and that ethical human society must be cultivated, in the same way that gardens must be cultivated to keep out the objectionable species. It is not a coincidence that a 1989 edition of Huxley’s essay included a long commentary by George C. Williams.

If the sister disciplines of economics and evolution part company on the third component identified by Krugman, that’s relatively minor—but parting company on the fourth component is huge. Mainstream evolutionary theory in 1996 provided no warrant for the assumption that “decisions reached individually will, in fact, be the best decisions for an entire society”, as the ecologist Garrett Hardin described the principle of laissez faire in his classic 1968 essay on the tragedy of the commons1.

So much for mainstream evolutionary theory in 1996. Has anything noteworthy happened since? Absolutely, although the new developments have long histories as heterodox views. Let’s begin with cell biologist Lynn Margulis, who proposed in the 1970s that nucleated cells did not evolve by small mutational steps from bacterial cells, but rather as symbiotic communities of bacterial cells that became so functionally integrated that they qualified as higher-level “superorganisms” in their own right. This idea was generalized in the 1990’s by John Maynard Smith and Eors Szathmary and became known as “major evolutionary transitions”—the conversion of groups of organisms into groups as organisms. In addition to the major transition identified by Margulis, other major transitions possibly include the origin of life as groups of cooperating molecular reactions, the first cells, multi-cellular organisms, social insect colonies—and human societies.

Maynard Smith sided with Williams in the rejection of group selection during the 1960s but changed his mind for major evolutionary transitions. The basic idea is that the balance between levels of selection is not static but can itself evolve. A major transition occurs when mechanisms evolve that suppress the potential for disruptive forms of within-group selection, so that between-group selection becomes the dominant evolutionary force. Note that his formulation admits the existence of forms of within-group selection that are good for the group, which would be favored by group-level selection along with traits that are more overtly cooperative.

Other noteworthy developments include a reassessment of the plausibility of between-group selection (including Unto Others, my 1998 book with Elliott Sober) and the beginning of a theoretical framework for the study of cultural evolution (including the 1985 book Culture and the Evolutionary Process by Robert Boyd and Peter Richerson). Maynard Smith and Szathmary were somewhat timid in speculating about human evolution as a major transition, but subsequent authors have become bolder. To the best of our current knowledge, the key event in human evolution was the ability to suppress disruptive self-serving behaviors within groups, so that between-group selection became the predominant evolutionary force. Most distinctive human traits such as cooperation among non-relatives, maintaining a shared inventory of symbols, and transmitting learned information across generations are forms of cooperation (broadly defined) that evolved by between-group selection. Group selection is an exceptionally strong force in human cultural evolution, regardless of how strongly it operates in genetic evolution. A selection of books conveying these themes will be listed at the end of my essay.

Let’s revisit Krugman’s four components of economics in the light of these developments in evolutionary theory.

1) It’s about what individuals do. “Methodological individualism is of the essence”. Not any more. The late social psychologist Donald Campbell, an early pioneer of the current developments, said this about methodological individualism in 19942: “Methodological individualism dominates our neighboring field of economics, much of sociology, and all of psychology’s excursions into organizational theory. This is the dogma that all human social group processes are to be explained by laws of individual behavior—that groups and social organizations have no ontological reality—that where used, references to organizations, etc. are but convenient summaries of individual behavior.” This dogma might be theoretically justified in cases where selection takes place entirely within groups (in which case group-level effects are coincidental byproducts), but not when groups are the unit of selection. Or, if you prefer, groups become the individuals when selection operates at the group level.

2) The individuals are self-interested. Not any more, at least not entirely. In my newest book, Does Altruism Exist?, I stress that altruism must defined separately in terms of action vs. thoughts and feelings and that a complex relationship exists between the two. When altruism is defined in terms of action and in terms of relative fitness within and among groups, humans are altruistic much of the time.

3) The individuals are intelligent and maximize their self-interested utilities. Krugman already identified a gap between economic and evolutionary theory for this component in 1996. On the economic side, behavioral economists have been closing the gap by calling attention to the many ways that people depart from the assumptions of Homo economicus, although most behavioral economists do not use evolution as a guide to understand the nature of Homo sapiens, as I stressed in my previous essay.

4) Economists are concerned with the interaction of such individuals, especially the invisible hand conjecture that the intelligent pursuit of self-interest benefits the common good. Ironically, and in contrast to mainstream evolutionary theory in 1996, the new developments provide theoretical justification for the concept of the invisible hand, although different than the received economic version. The two criteria of the invisible hand concept are: 1) A society functions well as a unit; and 2) members of the society do not have its welfare in mind. Multi-cellular organisms and social insect colonies offer spectacular examples of the invisible hand concept in nature. They function well as units and their members—cells in the case of multi-cellular organisms and single insects in the case of social insect colonies—don’t even have minds in the human sense of the word. Instead, they behave in ways that have been winnowed by higher-level selection to be good for their group. Put another way, higher-level selection is the invisible hand and if it doesn’t operate, there’s no theoretical warrant for expecting groups to function well as units. The economist John Gowdy and I develop this theme in an academic article3 titled “Human Ultrasociality and the Invisible Hand: Foundational Developments in Evolutionary Science alter a Foundational Concept in Economics”.

In short, all of the components of economic theory that made Krugman regard evolutionary theory as a “sister field” in 1996 require foundational changes in economic theory in 2016.

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I hope that Krugman remains an evolution groupie and wonder if he has kept up with these developments. Either way, I am pleased to provide a short list of books that reflect the developments for anyone who wants to join the action.

I end my reflection with a comment on open-mindedness. It’s easy to lapse into primordial us/them thinking in controversies of this kind. I occasionally yield to the temptation myself (it feels so good!). Krugman’s address to the European Association for Evolutionary Political Economy provides a model of cordial open-mindedness among people exploring different perspectives. The need for that has not changed between 1996 and 2016.

Hardin, G. (1968). The Tragedy of the Commons. Science, 162, 1243–1248.

Campbell, D. T. (1994). How individual and face-to-face-group selection undermine firm selection in organizational evolution. In J. A. C. Baum & J. V Singh (Eds.), Evolutionary dynamics of organizations (pp. 23–38). New York: Oxford University Press.

Wilson, D. S., & Gowdy, J. M. (2014). Human ultrasociality and the invisible hand: foundational developments in evolutionary science alter a foundational concept in economics. Journal of Bioeconomics, 17(1), 37–52. http://doi.org/10.1007/s10818-014-9192-x

Suggested readings:

Evolution as a General Theoretical Framework for Economics and Public Policy. 2013 special issue of the Journal of Economic Behavior and Organization. Note: JEBO is generously making the lead article of the special issue open access for a 6-month period (go here)

Boehm, C. (2011). Moral Origins: The Evolution of Virtue, Altruism, and Shame. New York: Basic Books.

Jablonka, E., & Lamb, M. J. (2006). Evolution in Four Dimensions: Genetic, Epigenetic, Behavioral, and Symbolic Variation in the History of Life. Cambridge, MA: MIT Press.

Haidt, J. (2012). The Righteous Mind: Why Good People are Divided by Politics and Religion . New York: Pantheon.

Henrich, J. (2015). The Secret of Our Success: How culture is driving human evolution, domesticating our species, and making us smarter. Princeton: Princeton University Press.

Nowak, M., & Highfield, R. (2011). SuperCooperators: Altruism, Evolution, and Why We Need Each Other to Succeed. New York: Free Press.

Paul, R. A. (2015). Mixed Messages: Cultural and Genetic Inheritance in the Constitution of Human Society. Chicago: University of Chicago Press.

Richerson, P. J., & Boyd, R. (2005). Not by genes alone: how culture transformed human evolution. Chicago: University of Chicago Press.

Turchin, P. (2015). Ultrasociety: How 10,000 years of war made humans the greatest cooperators on earth. Storrs, CT: Baresta Books.

Wilson, D. S. (2015). Does Altruism Exist? Culture, Genes, and the Welfare of Others. New Haven, CT: Yale University Press and Templeton Press.

Wilson, E. O. (2012). The Social Conquest of Earth. New York: Norton.

2016 January 20


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  • David Whitlock

    I read Krugman’s argument differently and think that researchers in evolution (and economics) have a lot to learn from it.

    “Survival of the fittest” and “maximization of profit” are metaphors. They are “models” (as in “all models are wrong, some are useful” by Box). They are emergent properties of the process of “markets” and “evolution”. They are not “objects” that have a reality that is independent of the market or independent of the organisms and independent of the environment the evolving species are evolving in. Krugman’s “killer quote” is:

    “I could multiply examples here, but I think the point is clear. Evolutionary theorists, even though they have a framework that fundamentally tells them that you cannot safely assume maximization-and-equilibrium, make use of maximization and equilibrium as modelling devices – as useful fictions about the world that allow them to cut through the complexities. And evolutionists have found these fictions so useful that they dominate analysis in evolution almost as completely as the same fictions dominate economic theory”

    There isn’t an actual “invisible hand”, just like there isn’t an actual “driving force of evolution”. The evolving system (species gene-pool plus environment) evolves as if there is a “driving force of evolution” (when looked at in retrospect); that is the very long term trend converges onto what is “successful” in that environment given the starting point and constraints of biology. That behavior only becomes apparent in hindsight. The “evolutionary innovations” that will emerge are not predictable from the baseline state. It is the same with “market successes”. What products will be market successes are not predictable in advance. Sony Betamax was a superior product that lost. M$ Excel was an inferior product that “won”.

    There are multiple, similar, approximate metaphors. A problem with the “survival of the fittest” metaphor is that “fittest” can only be determined post hoc. Similarly “market success” is also only determined post hoc. “Survival of the fittest” becomes a tautology when “survival” is the only metric by which “fitness” is measured. Similarly “market success” is a tautology.

    The example of what happened to Sears when a “social Darwinist” management style was used shows the danger of treating “competition metaphors” as objects independent of the environment. If the environment can be “gamed” by the players, then it is the “gamed environment” that matters, not the ungamed market. Sabotaging your competitors is “gaming the environment” because “you” have become part of the environment, and that coupling cannot be ignored. Similarly, regulatory capture can ensure “market success” for terrible products (HIV infected clotting factors in France).

    Sabotaging the competitors of your children by denying other people’s children food, healthcare, education and lead-free drinking water is “gaming the environment”. Of course healthy children will tend to grow into healthy adults more so than unhealthy children. Keep other people’s children unhealthy through malnutrition, and your children will have a leg-up in the next generation of “competition”.

    If you want the “competition” to actually achieve maximization of outcomes (or sum of outcomes as in total Sears corporate profit), then you must constrain the environment so that gaming the system can’t produce local optimum (increased subdivision profit) that are not reflective of the over all goal (maximization of the sum of subdivision profit).

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  • NickM

    There are some conflations here.

    The notion of the “invisible hand’ is much misunderstood by non-economists and even some economists. The crucial idea is that economic cooperation follows directly from intelligent self interest, without the need for alruistic motives. When David says: “Put another way, higher-level selection is the invisible hand ….”, he is dead wrong. I’m not saying that higher level selection does not occur in the way group selection theorists like David imagine it, and indeed give rise to some of the “moral sentiments” which so interested Adam Smith. For all that, the invisible hand conjecture proposes that intelligent agents will cooperate even when they have no altruistic motive to do so. In a community composed entirely of intelligent agents, cooperative (not altruistic) behaviours will emerge from the selection pressures imposed by other self interested agents, who won’t tolerate parasites and free riders. These sorts of pressures drive economic activity: people find ways of being benefits to others in the community and then be rewarded for those benefits. This process relies crucially on intelligence, and not ant-like automata behaviours, because intelligent actors perceive choices, and then act based on forecasts of the longer term effects of those choices, which will include rewards, if the activity has economic significance.

    David seems to apply a reductionism which ignores intelligence as a driver of behaviour. His quote of point 4 explicitly mentions intelligence, yet he ignores it completely as a driver of behaviour relevant to economics.

    None of this means that group selection isn’t real. Group selection may well be an important dynamic in the evolution of human eusociality, and may be a driver of cooperative and even altruistic behaviours which are economically significant. It may even be more important than the invisible hand, but it is a different mechanism from the invisible hand. Put another way, group selection refers to selection pressures affecting organisms at the genetic level, across multiple generations. The invisible hand refers to selection pressures arising on behaviour within an individual’s lifetime, and mediated through the mechanisms of learning and intelligence. And yes, I am well aware that the mechanisms of learning are themselves biologically based, but the point is they drive behaviour within an organism’s lifetime, not just across the lifecycle of groups.

    • Words, words, words. Beliefs about beliefs about beliefs. Turtles all the way down.

      Where in the cosmos is Occam’s double edge razor?

      When all the conflations are totally blended into a simple smoothie what we end up with is a really cool drink. Lets call it the Evolution of Self Identity … from kindergarten’s “me-isms” …. to high school’s “we-isms” … to Post Doc work with the University of Life called “Thee-isms.” Could this Me-We-Thee ladder of evolution be a replication of Jacob’s Ladder?

  • Richard Serlin

    Are you familiar with the work of Cornell economist Robert H. Frank?

    He talks about what he calls, “smart for one, dumb for all” in reference to positional externalities, which I think are the pink elephant of economics, for ideological reasons, and because they would make hard won expertises of the journal gatekeepers much less valuable. And Frank basically agrees. He refers to evolution a lot, and gives the example of elk, where ever larger antlers help the individual to win battles for mates, but hurt the species greatly by hurting it’s ability to escape predators.

    And, a lot of this is, of course, your measure, your optimization function. Again very much for ideological reasons, optimization in economics is almost exclusively Pareto. The total societal utility optimum can almost never even be given in a purely positive way, only the libertarian Pareto option can be discussed. But in optimizing total societal utility, the Pareto optimum usually falls comically short. As you may be aware, evolutionary algorithms are one of the five main types of artificial intelligence, or machine learning. But how well the algorithm does is tested against the data based on the optimization, or “welfare” function, and which one you choose is, of course, crucial.

    Something from economics that I think transfers to helping the field of evolution is the question of the advantage of sex. To me I see an analogy with options, greater variance means greater average future profit. With sex, if you have two parents with each some superior characteristics, with sexual reproduction you have the possibility of children who possess the best of both characteristics. Just one child like this could quickly spread his genes, even if the variance would make most of the children worse off. It seems like AI evolutionary algorithms could use this idea to try to jack up the variance, maybe having multi-parent sexual reproduction.

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  • Mauricio de Freitas Bento

    The author seem to understand much about evolution, but little about economics.

    The Invisible hand, the methodological individualism and other basic assumptions of Economic Theory are not as described here. In fact, these critiques are old and were widely refuted.

  • John M Legge

    Neither the economy nor the biosphere is in an equilibrium state. Equilibrium is a bad analogy drawn from 19th century physics. http://www.johnmlegge.com/blog/the-myth-of-equilibrium/

  • X-7

    Adding physics and complexity: complexity to the argument, and complexity as a phenomenon that needs to be included, especially since its accelerating exponentially.
    Arguing that both the good Drs. omit code as fundamental relationship infrastructure; and what complexity increases do to the efficacy of that code.
    “The story of human intelligence starts with a universe that is capable of encoding information.” Ray Kurzweil – “How to Create a Mind”
    Please see an abstract of sorts re Culture, Complexity and Code (includes monetary code):
    http://ow.ly/XEHWQ

  • David Whitlock

    The “invisible hand” metaphor and the “evolution” metaphor are about long term survival.

    Over the long term, economies that are successful look as if they are directed by an “invisible hand” because they survive. The only reason that they survive is because each necessary sector in the economy receives enough profit to sustain itself. If a sector did not receive enough profit to sustain itself, that sector fails and goes extinct. If that “extinct sector” was an essential sector, then the economy fails and the society that depended on that economy disappears.

    In ecosystems, some organisms rely on other organisms for “goods and services”, for example flowering plants depend on bees to distribute pollen between non-mobile individuals. If bees go extinct, then flowering plants that depend on those bees go extinct. The ecosystem of plants and bees only “works” because plants produce enough “extra” pollen and nectar to grow and sustain a sufficient population of bees to sustain the pollination services that the plants require. If the plants decided to “stiff” the bees and not provide sufficient nectar and pollen, then the bees would go extinct and eventually the plants would go extinct too.

    The “selection” of the invisible hand is about unfair and exploitative commerce going extinct. If a corporation doesn’t pay workers enough to survive, the corporation won’t have any workers. If the economy doesn’t pay workers enough to purchase what they need to survive (food, shelter, medical care, education), then the economy can’t survive long term. It may survive short term, but so what? Plants can survive without bees, but plants can’t reproduce without bees.

    Bees and plants don’t need to be “intelligent” to work together. What they need is to provide what the other needs. Bees need pollen and nectar, plants need pollen distribution services. Bees and plants working together can grow and prosper. Without that cooperation, neither bees nor plants could be successful.

    The way that ecosystems evolve to cope with “free riders” is by ecosystems with too many “free riders” going extinct. The way that economic systems cope with too many “free riders” is by collapsing such that the societies that rely on them go extinct.

    An economy that does not pay to raise and support the next generation of workers will go extinct. People and corporations unwilling to pay to feed, clothe, house, educate the next generation of workers, before they are capable of working, are “free riders”. Humans require adult care 24/7 for the first few years of every humans life. Human infants are not “free riders”. The helplessness of human infants is an immutable part of being a human being.

    “Free riders” are those humans who are unwilling to support infants when they are helpless.

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  • Jan de Jonge

    David. You end your article with the conclusion: “In short, all of the components of economic theory that made Krugman regard evolutionary theory as a “sister field” in 1996 require foundational changes in economic theory in 2016.” Maybe, I haven’t understood both articles well, but I don’t understand how you can reach this conclusion. Let’s have a look at the points 3 and 4. You ‘quote’ (?) Krugman for supporting your point that the assumption of maximization must be dismissed: “Krugman already identified a gap between economic and evolutionary theory for this component in 1996”. I didn’t notice this gap in his article. The only thing thing he writes is that evolutionary theory regards maximization (and equilibrium) as useful fictions, as modeling devices. And it would be better, he writes, when all (!) economists did the same. About point 4 you write that the new developments in evolutionary theory provide justification for the invisible hand. In my view Krugman’s opinion in 1996: ‘Evolutionary theory and economics share the same method: explain behavior in terms of an equilibrium among maximizing individuals’, therefore cannot be rejected on the basis of your update. This means that your article does not explain why the core of neoclassical theory requires a foundational change.

    • Proof of work

      Does the 08 recession explain why the core of neoclassical theory require a foundational change? I think lay people like myself still wonder if neoclassical is sufficient and bad corporations and bad finance will be shown the exit door of extinction if markets are unfettered. How do you allow societies to be held in the balance when their size causes systemic economic failure bleeding all over. Keynes makes sense in this light but so does the idea government isn’t good at recognizing how much and where to help. Neoclassical is brilliant stuff, no doubt. Can it too evolve?

      • Jan de Jonge

        Tony. I have not said that neo-classical theory needs no fundamental change. I have only argued that David Sloan does not prove this.
        In addition I want to point out that the theory that is under attack after the financial crisis is the New Classical theory, which indeed has its roots in neoclassical theory but is fundamental different because of its assumption of rational expectations. The rejection of new classical theory does not necessarily imply a fundamental change of neo-classical theory. Apart from this I’m a proponent of (post) Keynesian theory.

  • Milton Friedman’s incredible insightful statement that “I do not believe that the solution to our problem is simply to elect the
    right people. The important thing is to establish a political climate
    of opinion which will make it politically profitable for the wrong
    people to do the right thing. Unless it is politically profitable for
    the wrong people to do the right thing, the right people will not do the
    right thing either, or it they try, they will shortly be out of office.” (https://www.youtube.com/watch?v=MEVI3bmN8TI) Fits in well with this discussion.

    You want a set of rules, norms etc. that constrain behavior that is profitable to the individual but harmful to the group. Group selection makes it more likely that better sets of rules will win out, but because you have intelligent agents exercising some control over the rules you can effect that outcome, e.g. by agreeing to follow better rules or to reject rules that have worked well. Such choices map to the role of genetic variation with respect to social characteristics.

    You still have competition at the individual level, but a good set of rules makes that competition socially productive and the ultimate test is what is their effect on the welfare (including continued life of the individuals within).

    Friedman’s quotation is talking about norms at an even higher level of abstraction: those that goven the actions of those making the rules.

  • Iuval Clejan

    I speculate that the idea of the Invisible Hand of the Market as a force of higher level organization evolved directly from the idea of God as such a force. This explains the antipathy to the idea that socialism at any level (even the local village level) can serve as an alternative organizational force, from both (mostly protestant) Christians and Classical Economists. The Catholics can stomach a church serving as an intermediary between God and people in organizing society, and it is not a large step to other institutions doing the same thing.
    For the record, I think large scale socialism is not an evolutionary stable strategy because of the transaction costs of that level of organization and the insufficient response to demand variations. But local socialism with some mixture of market mechanisms might be stable, if it has a strong enough boundary to global capitalism.

    • Iuval Clejan

      Indeed, local socialism has occurred on the tribal level, but was outcompeted by global capitalism (at least in the ways it was implemented before). It continues to persist on the family level, though it dwindles.

  • Andrew Roger

    One issue that I’d like to see addressed in these discussions is the impact of advertising/marketing on the so-called efficient functioning of the free market. The basic assumption of the classical economic theory that individuals are both intelligent and rational self-interested agents is not only flawed because people aren’t always rational (or intelligent). But it ignores the fact that modern advertising methods deliberately attempt to mislead consumers. So the choice of a consumer is only optimal for their own self-interest if they actually have access to the truth about what is the best product and what it is actually worth. Elaborate branding methods, marketing that distorts the truth and the sheer burden of getting to the ‘truth’ in making these decisions are such that the vast majority of consumers can easily be misled. Companies that are best at misleading customers (within the boundaries of law) are the ones who do the best and consumers therefore choose suboptimal products, services or even products and services that are objectively bad for them.