Evolution and economics are examples of larger mysterious phenomena
By: Michael Shermer
The Yanomamo people are hunter-gatherers who live along the banks of the Orinoco River that separates Brazil from Venezuela. Their average annual income is estimated to be equivalent to $90 per person per year. The people of Manhattan are consumer-traders who live along the banks of the Hudson River, the buffer between New Jersey and New York State. Their average annual income is about $36,000 per person per year. However, this extreme gap of 400 times, pales in comparison to the difference in stock keeping units, a measure of the number of types of retail products available (Stock Keeping Units): according to an estimate, the people of Hyanomamu have 300 stock keeping units compared to 10 billion for the residents of Manhattan, a gap of 33 million times !
How did this happen? Economist Eric D. Beinhooker, who published these calculations in his revolutionary book "The Source of Abundance" (published by Harvard Business School, 2006), claims that the explanation lies in complexity theory. Evolution and economics are not only parallel to each other, they are actually two forms of a larger phenomenon called "Complex Adaptive Systems". The individual components, parts, or agents operating in such systems interact, process information, and then adjust their behavior to changing conditions. Immune systems, economic systems, language, the legal system, and the Internet are all examples of complex adaptive systems.
In biological evolution, nature selects from the diversity created as a result of random genetic mutations and the mixing of the parents' genes. Complexity and diversity emerge from a process of cumulative selection. In economic evolution, our material economy develops through the production and selection of many versions of countless products. Those ten billion products in the Manhattan village are only the versions that managed to reach the market. Now they are expected to be cumulatively selected by consumers who will choose the most useful: thus VHS videotapes beat Betamax format, DVDs beat videotapes, CDs beat records, mobile phones beat landlines, computers beat typewriters, Google beat Alta- Vista, the SUVs the family cars, the paper books the e-books (for now) and the internet the newspapers (soon). The purchased products "survive" and "proliferate" through repeated use and additional production.
At first glance it seems that both the living creatures and the economy were planned in advance. And so, as humans naturally infer the existence of a supreme intelligent planner, they also tend to think (and can be understood) that there must be supreme government planning for almost all economic aspects. But just as living things are shaped "from below" by the forces of natural selection, so the economy is also shaped from below by an invisible hand.
The parallel between evolution and economics is not perfect because some institutional laws must come from above to provide a mechanism in which free and fair trade can operate. But over-intervention in the market from above does not allow free trade nor fair trade. Such attempts in the past have failed because markets are too complex, too interactive and too self-stimulating to allow planning from above. In his book "Socialism" Ludwig von Mises explained in 1922 the problem of "economic calculation" in a planned socialist economy. In capitalism, prices are constantly changing in rapid flux and are determined from below by individuals freely exchanging goods. Money is the medium and prices are the information that guides people in their choices. Von Mises demonstrated that socialist economies rely on capitalist economies to determine the prices to be attached to goods and services. But they do so clumsily and ineffectively. Markets that operate relatively freely are ultimately the only way to determine how much buyers are willing to pay and how much sellers are willing to accept.
The combination of evolution and economics helps explain how a hunter-gatherer society like the Yanomamu evolved into a consumer-trader society like Manhattan. The 19th century French economist Frederic Bastiat articulated the principle well: "Where goods do not cross the border, the army will." The Yanomamu people are not only brave warriors but also shrewd traders, and the more they trade, the less they fight. This is because trade is a very strong social glue that creates political alliances. People from one village cannot approach a neighboring village and announce that they are worried that a third, stronger village will conquer them, because by doing so they show weakness. Instead, they will hide the real motives for making the alliance through trade and shared meals. In this way they gain not only military protection but also create a trade system that in the long run will lead to an increase in abundance and the number of their inventory holding units.
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Laurie Kupfer
Your comment seems a bit too "technical" to me.
The second law of thermodynamics is a physical law and refers to physical systems.
Evolution and the economy are biological-social systems with different complexities, it is possible that parallels to judicial systems can also be found in them, but surely there are other characteristics and laws in them.
To say that evolution and the economy are subject to the second law of thermodynamics is true but banal. It's kind of like saying that the sciences of evolution and economics are subject to all the laws of physics. This is true as long as the laws of physics are "correct" but, does not give us any new added value for understanding the processes in these sciences.
It should be noted that all the following phenomena are subject to the second law of thermodynamics,
which actually handles multi-component systems in general.
And it is possible quite easily to find the parallels between the Henel systems and simple systems in which there is a transfer of energy or any kind of communication.
A very nice comparison. Both biology and economics contain a lot of "adaptive complex systems". At the same time, it can also be disproved as a "theory" with the help of several contradictory examples.
I remember already at the end of the 60s of the last century (yes, yes) I read a booklet published by IBM edited by Zvi Yanai, which was dedicated to the subject of evolution. There, too, it was stated in one of the articles that human culture, in the broadest sense, including of course the mechanisms of human social and economic existence, operates according to principles parallel to the principles of Darwinist evolution.
And based on human history, one must be very careful with this comparison and its formulation.
Arrogant and superficial phrasing may slip into racist teachings, the results of which are extremely dangerous.
In my opinion, the danger to human existence itself, as a result of overpopulation, is greater and closer than any other (external) danger.
The main way to deal with this problem is to start seeing the entire human population on Earth as one nation,
Having one existential interest - survival.
Humanity has moved from the stage of international war (between nations) to the stage of war
All nationalities - for survival.
This war, like any war, requires an appropriate strategy, a leadership capable of putting that strategy into action, and resources. But first of all we need a vision and a person, or a group of people with a vision, who will put the issue, in all its urgency, on the world agenda. Where does "Herzl Nordau and Usishkin of human existence" come from?
It seems to me that only giants of the spirit of our time, philosophers, scientists, writers, and next to them (in the second stage) also celebrities from the fields of art, society, sports and the media, will be able to carry the burden and change the agenda of the politicians who are like a dog walking in front of its owner, barking loudly, protesting herself but waiting for his owner to show him the way.
I believe, for example, that a person like Stephen Hawking, who enjoys tremendous scientific and cultural prestige - on the one hand, but I think that his scientific future is, for the most part - already behind him, would be better if, instead of calculating the chances of an anti-elite being throughout the universe (as appears in one of the nearby news items), he would act in the direction of saving The existence of the human race is doomed. One thing is certain - Peres will be happy to help him.