Michael Shermer's Mind of the Market

I attended a talk by Michael Shermer. Shermer is the founder of the Skeptic's Society and Skeptic Magazine. He also writes the skeptic column for Scientific American. I should also point out his talk on TED on Why people believe strange things. I am a member of the Skeptic's Society (which really just means I subscribe to their magazine), and a big fan of Shermer. I got a signature and photo!

There were also some 9/11 truthers, who apparently follow Shermer's tours to protest. The 9/11 truthers, if you didn't know, are the people who think 9/11 was a conspiracy of the US government. They were ... interesting. Not really. Truthers are boring. All their questions were excuses to rant about 9/11. Moving on...

The subject of the talk was Shermer's new book, The Mind of the Market. I haven't actually read this book, so my understanding of it is based only on this talk. The central theme of the book is a comparison between evolution and economics. Neither require any sort of intelligent designer or central organization. Natural selection is parallel to the invisible hand. Given the similarities, it is rather curious why the conservatives who support free market economy tend to be the same people who reject the idea of natural selection. On the flip side, many liberals understand the process of evolution, and yet reject that a similar process could operate in economics.

Now, I have some reservations about relating skepticism to anything explicitly partisan. We can't have skepticism be too closely associated with either political party, lest it lose all credibility. For another thing, based on my perceptions, skeptics are not in fact skewed in either direction. Skeptics are split more or less equally among liberals and libertarians (with a minority of conservatives). As a liberal-libertarian, it's in my interest that it stays that way.

But I understand where Shermer is coming from. The same biases that cause people to believe in pseudoscience are also at work when people think about politics. Skepticism is a good thing, so why shouldn't its application to politics be a good thing? Furthermore, you can't (and shouldn't) disallow skeptics from having political opinions. I think politics is worth discussing, as long as it remains a discussion, not a fight for the skeptical identity.

Back to the talk. Shermer pointed out two parallel myths in evolution and in economics. It's often said that evolution is "Nature, red in tooth and claw," and it's all about competition between individuals. Well, not all the time. Evolution often promotes altruistic behavior. Your neighbor shares much of your DNA, so loving your neighbor is an adaptation (skipping over important details). The parallel myth in economics is that free market capitalism is all about greed and competition. Not really. It's the Googles ("Don't be evil") of the world that succeed, not the Enrons.

Now, Shermer presumably takes this analogy between evolution and economics to its full potential in his book. Not having read it, I wonder how he answers the following concern. Evolution and economics is simply an analogy, and not necessarily a perfect analogy. The biggest difference I see is that in evolution, you only have to show that natural selection works. In economics, you have to show that the invisible hand not only works, but is the best possible way for it to work. If you asked me, it is not the best way, but instead an approximation of the best way, and the one least prone to error. But why can't some careful modification result in improvements? My first thoughts are about things like the environment, education, and science, where the goods are important, but somewhat intangible. Oh, but I'm no economics expert.