Saturday, February 16, 2008

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.


Anonymous said...

So many comments to make, and I also have not read the book. First, Richard Dawkins argues that genes are selfish, and therefore evolution does not promote altruistic behavior. One can make plausible counter-arguments, however. Second, while the free market economy may have some similarities to evolution in that both respond to an invisible hand, the “hand” that evolution is responding to is natural law, while the market economy is responding to the psychology of the people. It seems to me to be a stretch to claim that these are the same thing. During the latter part of the 19th century the economic philosophy of Social Darwinism was common in the U.S. If evolution was a law of nature, the social Darwinists argued, then it should also extend to the society in which people lived. It was a cruel philosophy that most liberals certainly reject today (although it may be acceptable to Libertarians.) I agree that a free market can be improved by modifications, and in fact I doubt that a totally free market has ever existed in any country. I am most curious, however, about what libertarian principles you find attractive.

miller said...

First of all, just because genes are selfish doesn't mean evolution can never promote altruism. Evolution works on all levels: genes, individuals, communities, species. When it works on the level of communities, altruism is highly adaptive. You can, of course, come up with examples where evolution on the genetic level has overridden evolution on the community level.

Second of all, biologists will tell you that Social Darwinism is based on a bad understanding of evolution. Not quite as bad as the Creationist's understanding, but still bad. Michael Shermer would say that the reason Social Darwinism gets it wrong is because it ignores the importance of altruism in evolution (as you yourself just did).

As for myself, my political opinions are not particularly well-developed. My libertarian leanings come from the general idea that a free market is best under ordinary circumstances. Also, I'm mostly in favor of globalization, and I don't demonize giant corporations. Does that give you a basic idea?

Anonymous said...

I would say that all evolution occurs at the genetic level. If the genes cause the individual to behave differently (e.g., altruisticly, or coooperatively) that may help the individual to survive, but the gene is still selfish. I call your attention to Dawkins' "The Selfish Gene," p. 36: "What are the properties that instantly mark a gene out as a 'bad', short-lived one?....One that is particularly relevant to this book: at the gene level, altruism must be bad and selfishness good."

miller said...

There is a legitimate question of how much evolution favors selfishness and how much it favors altruism. But it's extremely clear that it does not fully favor one to the complete exclusion of the other. And yet you seem to be arguing that evolution cannot possibly favor altruism? I don't think Dawkins, or any other biologist, would agree.

Anonymous said...

I am not necessarily disagreeing with you. I am prodding you to refute Dawkins---or to prove to me that I misunderstand Dawkins. Personally I believe there is an existence proof for the theory that evolution can produce altruism. A substantial number of people are altruistic (and indeed, altruism has been demonstrated in a few other species as well). Since evolution has produced people, evolution can therefore produce altruism. What is the mechanism by which this has occurred?

miller said...

I'm not sure why you're asking. Are you trying to learn something or prove a point? I can't really answer this with the depth that a real biologist could, you know. And I'm not convinced that Dawkins thinks evolution can't favor altruism.

One reason that altruism can arise is because when you help others, those others have genes that are correlated with your own.

Blake Stacey said...

The point of the "selfish gene" model is to explain why altruism can occur. My close relatives share many genes with me, so if I help my relatives survive and produce offspring, then copies of genes which I have will propagate in the next generation, almost as if I had reproduced myself. From my genes' perspective, saving two brothers or eight cousins is just as good as keeping myself alive.

Then, of course, come the complications: kin recognition isn't perfect, and it can be simpler just to behave altruistically to everyone in my vicinity, because they're probably related to me to some extent. As groups become larger, the general predisposition to altruism which evolved in our ancestors means that we act altruistically to people who are not that closely related to us.

We begin with the observation that human beings and other animals can exhibit altruism, cooperation and even self-sacrifice. Then we devise a hypothesis for how this can occur in what one might think is the dog-eat-dog world of natural selection. The fact that we can predict the rise of altruism from a model involving "selfish genes" does not in the slightest way impugn the validity of the original observation, any more than the discovery that matter is made of atoms and atoms are mostly empty space reduce the pain I feel when stubbing my toe against a rock.

Remember, Dawkins did not call his book The Selfishness Gene.

Blake Stacey said...

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.

Hardly surprising at all, really, when you consider that many of these "conservatives" are actually authoritarians who profess admiration for the "free market" because that is what Real Americans do.

As I've remarked before, Shermer has always had a tendency to commit the naturalistic fallacy, with poor analogies providing the cherry on top. Does biological evolution imply that a Totally Free Market(TM) is the best way to "organize" a human economy? Of course not, no more than Newton's laws imply that the stock market should fall like an apple.

Evolution is, in a famous phrase, the non-random survival of randomly varying replicators. When describing an economy as an evolutionary process, what are the replicators — people, companies, products, ideas, memes? And assuming we can answer that question, what are the selection pressures? What about altruism and cooperation, spandrels and byproducts?

On top of that, how do you get falsifiable predictions out of your model, and what experiments can you use to test them?

John Allen Paulos uses the comparison with a free-market economy as a plausibility argument, a way to get people to wake up and think, a tactic for warming them up so they'll be ready to listen to the real evidence. It might be good for such purposes — your mileage may vary — but I can't believe it's much better than that. Remember, people who claim to be free-market conservatives are often authoritarians in free-market clothing: Shermer's argument may convince a dozen fervent libertarians, but I have to wonder how much it can do beyond that. Furthermore, I suspect that "convincing" anyone of the truth of a scientific discovery on grounds other than the evidence itself is impractical, likely to backfire and, ultimately, immoral.

miller said...

I basically agree, though less eloquently. The evolution/economics analogy is only really useful as a plausibility argument, or a launching point to talk about real evidence. It's sort of the same deal as the meme/gene analogy. It's an interesting idea, but the details probably don't work out.

As much as I like Shermer, I find myself disagreeing with him more and more these days.