Posts Tagged ‘Evolution’

Just a random thought this morning: history has progressed to this point, and seen several revolutions in the formal arrangements that govern societies.

Since pre-history, people lived in chaotic tribal groups, often warring with their neighbors.  Power and leadership coalesced around the warlord.  Eventually warlords ceded some power to a King, who could ensure a peace over a broader territory.  Kings eventually gave way to classically liberal regimes, like Napoleon or the English Parliment.  At the close of the 1800’s Europe, and soon the world, was ruled by a sense of tribal-nationalism, centered around the idea of a unified volk, or common people. (more…)

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Once a friend claimed to me that a free market was ultimately unsustainable because in the long run, all wealth would be channeled to one person.  The implication here is that the government provides a necessary check to prevent such injustice.  The claim is one that addresses complex social and economic features of how humans behave, one that seems intuitively correct to people that, so it survives as a factoid that’s passed around without much question.  The richest in society are richer now than they ever have been, because they’re withholding resources from the lower classes, right?  This is not the way economists think about the world.

Economists see trade as a positive-sum game, which means that when two parties make a voluntary exchange, both are better off.  Have you’ve ever thanked someone at a cash register and heard them thank you in response?  In a free market, wealth doesn’t accumulate to the richest by exploitation; it is produced from the bottom up.

Evolution has left us with an unfortunate bias to think in zero-sum terms.  Our ancestors functioned in a zero-sum environment, which means that one party benefited at the expense of another.  If two warring tribes were competing over resources, then inequality between the them was a signal of injustice.  In contrast, today’s economic institution, a free market, functions contrary to our evolved intuitions.  Zero-sum thinking is quite pernicious because it is so psychologically ingrained, and as such, it strongly motivates people to advocate for protectionism and all sorts of policies that decrease human welfare.

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