Tuesday, May 24, 2011

Our economic models are lousy because our ape brains couldn't do math?

Driving to work the other day we heard part of a story on the BBC about human economic behavior -- we heard the part about the behavior, but did not hear the part that told us what show it was, so, in what is very poor blogging protocol, we can't link to it.  In any case, their 'expert' (undoubtedly an economics professor at some presumably respectable university, and thus expert at evolutionary biology) says that humans are always trying to outwit and outcompete each other, and that we're vulnerable to herd behavior in terms of what it seems will be good competition (like buying a house because everybody else is, assuming that even if there's a bubble, and it bursts, at least I will get out in time to profit).

As the yarn was spun, our expert said that we came from ape stock, small bands, simple life and all the usual stuff.  Then we 'decided' to build complex systems like Wall Street (let's cut a break for the far-sighted implication that an ape foresaw New York), but our little ol' ape brains weren't capable of living in such a complex system.  That's why our behavior is not up to it and why such a system as Wall Street doesn't actually work.

Now no doubt economists, who for some reason still have paying jobs at universities, acknowledge that they can't predict any better than weather forecasters, have all sorts of theories about why the system fails, leads to such personal tribulations, high unemployment, etc. etc.  And the Beeb interviewee went on about similar kinds of things.

So we have the very ethnocentric Just-So story that we're over our li'l heads in complexity and that's why things don't work!  But wait just a second!  To the ear used to accepting baloney Just-So stories, this sounds acceptable.  But there is a much more plausible explanation, far more evolutionary in fact than these contorted post hoc evolutionary make-believes.  Evolutionarily, our economic system is either irrelevant, or it works wonderfully!

After all, there are by far, far, far, more people on earth, and hence more copies of 'the' human genome, than ever before.  There may have been a total of less than 200 billion people ever, in the past hundreds of thousands of years of human history, but 7 billion of those -- around 5% -- who ever lived, are alive to day, and in terms of reproduction we're putting bunnies to shame.

No evolutionary biologist has any reason to make any connection between Darwin and whether people are enjoying life.  Indeed, Darwin rested his theory on his belief that life was miserable, relentless, cruel competition.  So, even if we accept the economist experts completely at their word about our non-rational behavior, we are, as a species, booming along just fine!

From this point of view, it matters not a whit if you are unemployed, lose your house, or can't get good health care.  So long as you and your descendants are rutting merrily away, the economic system is working wonders, whether you're happy with it or not.  And if economic woes lead to even less 'responsible' sexual behavior, that's evolutionarily even better!

It's a wholly legitimate question why we can't understand economics.  But it's not an evolutionary question about whether humans are adapted to our culture or not.  Our economic behavior must fit within our biological nature, and of course there will be genetic variation that affects it--and even some genetic variants that have detectable effects.  But the behavioral 'repertoire' is not restricted to humans.

Economic behavior is evolutionary, but it's cultural not biological evolution that matters.  And the fact is, social scientists including cultural anthropologists have failed rather seriously either to simply recognize there are serious limits to knowledge, or that their knowledge is seriously limited, or that their profession's achievements are fundamentally under-developed.  That's where the problem lies, and the proof is in the pudding.