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Saturday, December 19, 2009

"How Bad Biology Killed the Economy"

Frans de Waal says many people believe that "the economy was killed by irresponsible risk-taking, a lack of regulation or a bubbling housing market, but the problem goes deeper. ... The ultimate flaw was the lure of bad biology, which resulted in a gross simplification of human nature," In particular, the reduction of human behavior to one motive, self-interest, is at fault (this is a much shortened version of the original):

How bad biology killed the economy, by Frans de Waal, RSA Journal: ...The book of nature is like the Bible: everyone reads into it what they like, from tolerance to intolerance and from altruism to greed. But it’s good to realize that, if biologists never stop talking about competition, this doesn’t mean that they advocate it, and if they call genes selfish, this doesn’t mean that genes actually are. Genes can’t be any more ‘selfish’ than a river can be ‘angry’ or sun rays ‘loving’. Genes are little chunks of DNA. At most, they are self-promoting, because successful genes help their carriers spread more copies of themselves. ...
[Many people have] fallen hook, line and sinker for the selfish-gene metaphor, thinking that if our genes are selfish, then we must be selfish, too. ... [T]oo many economists and politicians ... model human society on the perpetual struggle that they believe exists in nature, which is actually no more than a projection. Like magicians, they first throw their ideological prejudices into the hat of nature, then pull them out by their very ears to show how much nature agrees with them. It’s a trick for which we have fallen for too long. Obviously, competition is part of the picture, but humans can’t live by competition alone. ...
Lovers of open competition can’t resist invoking evolution. The e-word even slipped into the infamous ‘greed speech’ of Gordon Gekko, the corporate raider played by Michael Douglas in the 1987 movie Wall Street: “The point is, ladies and gentleman, that ‘greed’ – for lack of a better word – is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit.” ... Is the evolutionary spirit really all about greed, as Gekko claimed, or is there more to it?
This line of thinking does not just come from fictional characters. Listen to David Brooks in a 2007 New York Times column that made fun of social government programs: "From the content of our genes, the nature of our neurons and the lessons of evolutionary biology, it has become clear that nature is filled with competition and conflicts of interest." Conservatives love to believe this, yet the supreme irony of this love affair with evolution is how little most of them care for the real thing.
In a recent presidential debate, no fewer than three Republican candidates raised their hand in response to the question: “Who doesn’t believe in evolution?” American conservatives are social Darwinists rather than real Darwinists. Social Darwinism argues against helping the sick and poor, since nature intends them either to survive on their own or perish. Too bad if some people have no health insurance, so the argument goes, so long as those who can afford it do. ...
The competition-is-good-for-you logic has been extraordinarily popular ever since Reagan and Thatcher assured us that the free market would take care of all of our problems. Since the economic meltdown, this view is obviously not so hot anymore. The logic may have been great, but its connection to reality was poor. What the free-marketeers missed was the intensely social nature of our species. They like to present each individual as an island, but pure individualism is not what we have been designed for. Empathy and solidarity are part of our evolution – not just a recent part, but age-old capacities that we share with other mammals.
Many great social advances – democracy, equal rights, social security – have come about through what used to be called ‘fellow feeling’. The French revolutionaries chanted of fraternité, Abraham Lincoln appealed to the bonds of sympathy and Theodore Roosevelt glowingly spoke of fellow feeling as “the most important factor in producing a healthy political and social life”.
The ending of slavery is particularly instructive. On his trips to the south, Lincoln had seen shackled slaves, an image that kept haunting him... Such feelings motivated him and many others to fight slavery. Or take the current US healthcare debate, in which empathy plays a prominent role, influencing the way in which we respond to the misery of people who have been turned away by the system or lost their insurance. Consider the term itself – it is not called health ‘business’ but health ‘care’, thus stressing human concern for others. ...
Social creatures
Natural selection has produced highly social and cooperative animals that rely on one another for survival. On its own, a wolf cannot bring down large prey, and chimpanzees in the forest are known to slow down for companions who cannot keep up due to injuries or sick offspring. So, why accept the assumption of cut-throat nature when there is ample proof to the contrary?
Bad biology exerts an irresistible attraction. Those who think that competition is what life is all about, and who believe that it is desirable for the strong to survive at the expense of the weak, eagerly adopt Darwinism as a beautiful illustration of their ideology. They depict evolution – or at least their cardboard version of it – as almost heavenly. John D Rockefeller concluded that the growth of a large business “is merely the working out of a law of nature and a law of God”, and Lloyd Blankfein, chairman and CEO of Goldman Sachs ... recently depicted himself as merely “doing God’s work”.

We tend to think that the economy was killed by irresponsible risk-taking, a lack of regulation or a bubbling housing market, but the problem goes deeper. ... The ultimate flaw was the lure of bad biology, which resulted in a gross simplification of human nature. Confusion between how natural selection operates and what kind of creatures it has produced has led to a denial of what binds people together. Society itself has been seen as an illusion. As Margaret Thatcher put it: “There is no such thing as society – there are individual men and women, and there are families.”
Economists should reread the work of their father figure, Adam Smith, who saw society as a huge machine. Its wheels are polished by virtue, whereas vice causes them to grate. The machine just won’t run smoothly without a strong community sense in every citizen. Smith saw honesty, morality, sympathy and justice as essential companions to the invisible hand of the market. His views were based on our being a social species, born in a community with responsibilities towards the community.
Instead of falling for false ideas about nature, why not pay attention to what we actually know about human nature and the behavior of our near relatives? The message from biology is that we are group animals: intensely social, interested in fairness and cooperative enough to have taken over the world. Our great strength is precisely our ability to overcome competition. Why not design society such that this strength is expressed at every level?
Rather than pitting individuals against each other, society needs to stress mutual dependencies. This could be seen in the recent healthcare debate in the United States, where politicians played the shared-interest card by pointing out how much everybody (including the well-to-do) would lose if the nation failed to change the system, and where President Obama played the social responsibility card by calling the need for change “a core ethical and moral obligation”. Money-making cannot be allowed to become the be-all and end-all of society.
And for those who keep looking to biology for an answer, the fundamental yet rarely asked question is why natural selection designed our brains so that we’re in tune with our fellow human beings and feel distress at their distress, and pleasure at their pleasure. If the exploitation of others were all that mattered, evolution should never have got into the empathy business. But it did, and the political and economic elites had better grasp that in a hurry.

    Posted by on Saturday, December 19, 2009 at 10:14 AM in Economics, Methodology | Permalink  TrackBack (0)  Comments (30)


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