Evolution and economics are both complex adaptive systems

Evolution and Economics January 15, 2008

Dr. Michael Shermer, of the Skeptics Society, has a fascinating article at Scientific American entitled ‘Evonomics‘. He postulates that evolution and economics are both part and parcel of the same phenomenon - complex adaptive systems.

In biological evolution, nature selects from the variation produced by random genetic mutations and the mixing of parental genes. Out of that process of cumulative selection emerges complexity and diversity. In economic evolution, our material economy proceeds through the production and selection of numerous permutations of countless products.

Quoting both Mises (”Socialism”) and Basitat, Shermer shows that top-down government “design” of the economy is a ludicrous as “design” in evolution.

As with living organisms and ecosystems, the economy looks designed—so just as humans naturally deduce the existence of a top-down intelligent designer, humans also (understandably) infer that a top-down government designer is needed in nearly every aspect of the economy. But just as living organisms are shaped from the bottom up by natural selection, the economy is molded from the bottom up by the invisible hand. [emphasis mine]

He still thinks (sadly) some interference is necessary to ensure “free and fair trade”, but he is, at least headed in the right direction.
But what this really points to is yet another example of hypocrisy that seems to plague both the ‘left’ and the ‘right’, both so-called liberals and conservatives. Each has their own cognitive dissonance here. The conservative right, staunchly defends the idea (for the most part) that the economy is molded “from the bottom up by the invisible hand” of the market, while denying the identical process that occurs in biology. Of course, the liberal left seems to have the opposite problem - while rightly defending the process of evolution and natural selection, they fail to see this exact same process in the field of economics and claim that the government is needed to manage the market.
One cannot support true free market economics and deny evolution nor can one deny the power of the true free market while vehemently supporting evolution. Interference in the market causes unexpected distortions and unintended consequences just as interfering with evolution does.

theConverted This entry was posted on January 15, 2008 at 10:14 pm and is filed under anarchism, dogma, economics, skepticism, state interference.