Matt Ridley on Consistency - or Lack Thereof

Matt Ridley writes the Natural Order of Things in The Spectator HERE:

“Today, generally, Adam Smith is claimed by the Right, Darwin by the Left. In the American South and Midwest, where Smith’s individualist, libertarian, small-government philosophy is all the rage, Darwin is reviled for his contradiction of creation. Yet if the market needs no central planner, why should life need an intelligent designer? Conversely, in the average European biology laboratory you will find fervent believers in the individualist, emergent, decentralised properties of genomes who prefer dirigiste determinism to bring order to the economy.”

Comment
This article is an excellent read and I highly recommend it you. The paragraph is but a taste.

Ridley makes an interesting case, slightly off centre in his depiction of Adam Smith, though what is attributed to Smith in the American South is probably as stated, but is somewhat at variance with his actual views, not that I would expect many on the Right to realise their misperceptions.

As for Darwin, I hadn’t thought of him as particularly in tune with leftwing thinking, as Ridley brings out the “individualist, emergent, decentralised properties of genomes”, which is a long way from the left’s passion for central control and regulation.

Yes, it is an uncomfortable clash of opposites, making consistency a rare dish for those with an appetite for it.

Sociability and Human Evolution

Darwiniana Blog (30 January) carries Freedom Evolves! Huxley’s Evolution #2: ‘We have discovered Huxley ’s evolution #2′ HERE:

“This ‘survival of the fittest’ aspect is, in any case, demonstrably false of man’s social experience, as the mechanism of cultural evolution. Thus extreme competition is met by the response of social law in the evolution of civilization, if not economy. And the place of Adam Smith here is entirely complex and misleading, this philosopher being a de facto source of a new ethics, even as his work is polarized between an economic and moral dimension. Survival of the fittest business firm is simply another process, as is the tonic of Olympiad sports competition. The issue of evolutionary causality in the study of the evolution of civilization has been so confused by assumptions of material causative motive, as in the imputation of economic determinism, that the real evolution of social cooperation seems to have been forgotten. In general, theories of evolution must themselves interact with the near future of all free action, in a confusion of external observer, and temporal participant, ‘acting out theory’.

Comment
“The issue of evolutionary causality in the study of the evolution of civilization has been so confused by assumptions of material causative motive, as in the imputation of economic determinism, that the real evolution of social cooperation seems to have been forgotten.”

Crude applications of evolution to economics systems are certainly flawed. Animal spirits of ‘red in tooth and claw’ competition, beloved of advocates of certain strains of corporatism, are toxic (to use a contemporary word in vogue) for the sciences of human behaviours.

I confess to not quite getting what John Lander (the author of the Darwiniana Blog) is on about in his claims for ‘eonic’ insight into these matters,especially with his apparent assertion that the Bible is ‘a document of interest,’ as police investigators call certain suspects, but I concur with his statement ‘the real evolution of social cooperation seems to have been forgotten’.

The sociability of primates, in particular the Hominine lineage through the evolution of about 18 species before Homo sapiens emerged dominant, is the key to understanding the crucial role that social co-operation – a set of behaviours, not genes – played in the biological evolution of our species over several million years.

I discuss this in my paper on the “Pre-history of Bargaining: an multi-disciplinary treatment, Part I”, which you may download from Lost Legacy’s Home Page (in red, at the top; just click and follow the link).

I am presently working on developing this paper and the research supporting it into a book-length treatment (title to be decided). Adam Smith, you may be assured, plays a major role in my approach, though most of today's epigones and their acolytes may not recognise the Adam Smith from Kirkcaldy. who was quite different from the so-called 'Adam Smith' from US academe.

A Fair Question: how many economists and biologists have read Darwin and Smith's Works

Paul Walker, a regular reader of Lost Legacy in Christchurch New Zealand Blogs at: Anti-Dismal ('A blog on all things to do with economics and related subjects') HERE:

“Shocked but not surprised

Tyler Cowen over at Marginal Revolution writes in a posting Blogging *The Origin of Species*,

“That is a worthwhile endeavor and you will find the blog here. Nonetheless I was shocked (but not surprised) to read the following:

“Evolutionary biologist John Whitfield is reading Origin for the first time and writing about it, chapter by chapter.

I would ask Tyler, if he is shocked but not surprised to learn that a biologist hasn't read Darwin, then how shocked, but not surprised, would he be to discover that few economists have read Adam Smith?”

Comment
I hope many more economists will read both Moral Sentiments (1759) and Wealth Of Nations (1776) in this 250th commemorative year for the publication of Moral Sentiments.

It is also the 250th commemorative year for the publication of Darwin’s Origin of Species, a book well worth reading.

I read it in 2000 while preparing my ‘Pre-History of Bargaining’ ms (you can read my paper, “The Pre-history of Bargaining: an inter-disciplinary treatment, part I”, by clicking on the link (in red) on the Lost Legacy Home Page).

I plan to re-read Darwin’s Origin of Species this summer, and his other books developing this theme as applied to Natural Selection and Sex, and his book on facial gestures among humans and other animals.

An Evolutionist Speaks Out About Economists' Pretensions About Science

Massimo Pigliucci, professor in the departments of Ecology and Evolution, Stony Brook, NY, contributes an important piece of work in the Blog,
Rationallyspeakingout.org (‘a site devoted to positive scepticism') (HERE):

“Economics learns a thing or two from evolutionary biology”

“Economics is supposed to be a solid discipline, founded on complex mathematical models (and we all know math is really, really difficult). They even give Nobel prizes to economists, for crying out loud! And yet, economics has always had to fight off the same reputation of being a “soft” science that has plagued sociology, psychology, and to some extent even some of the biological sciences, like ecology and evolutionary biology. Indeed, like practitioners in those other fields of inquiry, some economists admit of being guilty of “physics envy,” that is, of using the physical sciences as the model for what their field ought to be like. Turns out even the assumption that a good science should be modeled on physics is “flawed,” to use Greenspan’s apt phrase.

“A recent article by Chelsea Wald in Science (12 December 2008) puts things in perspective by asking how it is possible that so many smart people in the financial sector made irrational decisions over a period of years, despite clear data showing there was a problem, and eventually leading to a worldwide economic crisis that is at the least poking at, if not shaking, the foundations of capitalism itself.

Part of the answer is to be found in the persistent idea in economics that “markets” work because people are rational agents who act in their own self-interest and have perfect, instantaneous access to relevant information about the businesses they are considering investing in. Economists are not stupid, and they know very well that perfect rationality, complete information and instant access are all light years away from the reality of how markets operate. And in fact recent models have relaxed these assumptions to some extent. But it is so much more tractable to model things that way! After all, physicists do it too: remember those problems in Physics 101 that started “consider a spherical cow…”?

“Perhaps not surprisingly, there is another science that has been inspiring economists for some time now: evolutionary biology. The old “efficient markets hypothesis” underlying classical models is being replaced by the “adaptive markets hypothesis,” where Adam Smith’s invisible hand becomes more directly analogous to natural selection.”

”As evolutionary biologists have found out, natural selection is not an optimizing process, but a satisficing one, meaning that it produces whatever outcome happened to be achievable at a particular historical moment and that works “well enough” for the problem at hand. Moreover, it does so while “wasting” a lot of resources and often marching straight into dead ends (just think that over 99% of the species that ever existed went extinct). The emerging picture is much more realistic than the rationalist paradigm, but it sure is a lot more messy too.”

“There is another lesson to be learned from evolutionary biology that will not make economists, or the public at large, particularly happy: when complex systems evolve over time the paths they take is contingent on historical accidents (as opposed to being deterministic, like the laws of macro-physics, outside quantum mechanics). Sociologists, psychologists, ecologists and evolutionary biologists will readily tell their economic colleagues that it is certainly possible to explain past events (the extinction of the dinosaurs, the dot-com bubble) by the use of sufficiently complex causal-historical models. What seems to be out of reach, however, is precisely what economists want most: predicting the future, the hallmark of “good” science.”

“The moral of the story is that all of the above is not a failure of economics, sociology, psychology, ecology or evolutionary biology. It is the predictable outcome of the fact that these sciences deal with complex, historical systems, unlike much (though not all) of physics. The real assumption we need to get rid of is the highly persistent and pernicious one that physics is the golden standard by which all other sciences ought to be measured. Now if we only could convince federal funding agencies of that...”

Comment
What a breath of fresh air from Professor Massimo Pigliucci! I wish (more in hope than expectation) that fellow economists will read all of his article. But because there are large dollops of research-grant money – and even bigger salaries from financial institutions (and government agencies) – available to smart-talking economists, who tell the grant agencies exactly what they want to hear, there is a steady demand for the services of 'future predictors' and no amount of their constant failures to do better than tossing a ten-pence coin could do, will curb the willingness to believe those in the prediction business.

It’s at least as bad as the historians of the immediate past, when they already know what has happened, who cannot agree on what caused, led to, or contributed to whatever is the latest ‘fine mess’ we’re in.

The historical precedents for this quite silly state of affairs goes back to classical times, and almost certainly farther back than that. Romans believed in ‘omens’ and fortune tellers, and even great generals, who pitted their lives against formidable foes, eagerly listened to what soothsayers and mystics had to say about the next few hours in decisive battles.

Among economists, we have bought the unscientific myth that if we spend a century creating beautiful mathematical models of an imaginary economy, without people in all their complexity and unpredictability, and our competence is judged by our understanding of the model, but not the reality of real economies!

We are a ‘hard’ science and much ‘superior’ to ‘wishy-washy sociology, psychology and history, even though it is well-known that humans are not ‘well behaved’ like physical objects. We are not like wooden pieces on a chess board, as Adam Smith put it.

It is worrying too that just as more economists begin to realise that “the old 'efficient markets hypothesis' underlying classical models is being replaced by the 'adaptive markets hypothesis,' into which realisation, the oldest nonsense in modern economics (invented as a mass myth from the 1950s), is being re-introduced into the latter, under the guise that the metaphor of “Adam Smith’s invisible hand”, such that it is to be regarded as “more directly analogous to natural selection.”

Please spare us from this spurious nonsense; it’s bad enough that the proponents of the so-called scientific basis of economics have got away with their claims that the mystical disembodied body part was the ‘most important idea’ of modern economics, which is something that they never got from the texts of Adam Smith (see my paper: 'Adam Smith and the Invisible Hand: from metaphor to myth’, 2008 and downloadable from the homer page of Lost Legacy).

The myth of the invisible hand is a fabrication to support propaganda for corporate bodies to behave with all the monopolistic spirits and protectionism of the ‘merchants and manufacturers’ of his day, against whom Adam Smith railed in Wealth Of Nations because they persuaded legislators and those who influenced them (and they ‘bought’ not a few) to assist them in narrowing the competition and raising prices.

Follow the link to read Professor Massimo Pigliucci’s short article HERE.

The Long History of Markets and Exchange

Peter Foster writes in National Post (here):

“Where anti-capitalists hang themselves”

A few lines quoted from a debate arranged by the John Templeton Foundation on markets and whether they morally corrode participants:

“All-too-typically, he attempts to recruit Adam Smith to the left, noting Smith's concern with the "subversive dynamism of the market." But that was nowhere near the Sage of Kirkcaldy's concern about the "folly and presumption" of the likes of Mr. Gray. Mr. Gray does eventually admit the greater moral corrosion of centrally-planned economies but makes the astonishing claim that "actual life in Soviet societies was more like an extreme caricature of laissez-faire capitalism."

Comment
It is the corruption of markets that attracted Adam Smith’s ire, and not markets as such. Adam Smith did not write a textbook of doctrine about markets; he wrote about what he observed, not what philosophers, both contemporary (example, J. J. Rousseau’s condemnation of improved society and its failings, of which he was hardly a shining moral example) and long-past luminaries of the ancient world (example, Plato), made of the quite enormous possibilities of wealth, the ‘annual output of the ‘necessaries, convenience, and amusements of life’, for the real lives of really poor people.

Smith’s historical, ‘looking backwards’, perspective, showed all too clearly the moral corruption of ‘the rulers of mankind’ as individuals in all societies, those with nothing, those with next to nothing, and those with a few artifacts, trinkets, and ‘baubles’ that made them ‘great’ compared to societies still running ‘free’ in the forest.

He wasn’t too impressed with the purveyors of superstition, the misleaders of men and their pusillanimity, the posers who pandered to their pathetic tastes for undeserved praise from their ‘inferiors’, and legislators and those who influenced them with patently false doctrines of political economy, civil government and ‘divine’ rule.

But about commerce, he had few doubts. He debated Rousseau’s ideas, those of Bernard Mandeville, and those of mercantile political economists like Sir James Steuart and, instead, he saw commercial markets and exchange relationships in all areas of his Works, including in the origins of language, the progress of natural philosophy, the evolution of civil justice and the process by which moral sentiments were exchanged and agreed within society (and not through the senses), as being the cause and the consequence of the unintended, uncontrollable, and unforeseen actions, not plans, of human individuals relating through exchanges with each other since they finally began to secure themselves in their societies from the primitive, near animal, horizons of their earliest modes of subsistence.

Smith knew from his friend, the geologist James Hutton, how the world had evolved over ‘unimaginable’ long time periods (and not from 4004 BC!), and he achieved much a hundred years before Darwin discovered natural selection and before political economy began the long march away from how and why markets worked, and towards abstractions upon which there is still no agreement as to how they correspond to the real world of human societies.

Mr Gray, a lovely man no doubt, is forgiven because he does not know what he is writing about in respect of Adam Smith.