Wilson vs. Arnhart on Darwinism and the economy

The nation’s economy is in deep trouble, which means financial woes all over the world, with millions of people affected. Bush-II is hardly appearing in the news, as apparently “the Decider” has nothing to say about a disaster whose slow but sure build-up his so called administration has presided over for the last eight years. To compound disaster with disaster, the Treasury Department isn’t just trying to help by saddling the taxpayers with the sins of Wall Street; no, in perfect Bush style, Secretary Paulson is seeking to obtain from Congress -- and retain in perpetuity for his successors -- unfettered authority to intervene in the markets with essentially no oversight by the legislative branch.

Throughout all this, David Sloan Wilson and Larry Arnhart have been debating whether evolutionary theory favors government regulation or not. What on earth does evolutionary theory have to do with the global economy, one might reasonably ask? A lot, according to both Wilson and Arnhart, though they arrive at diametrically opposite conclusions by allegedly using the same scientific theory. Not much, responds yours truly, who is not an economist, but whose background is in evolutionary biology and philosophy. Let us first briefly see what Wilson and Arnhart say, followed by my modest take on the debate.

I find David Sloan Wilson’s essay reasonably argued (unlike Arnhart, who judges it “incoherent”), though I will point out in a minute why it is ultimately unconvincing. Wilson’s position is that we should once and for all abandon the metaphor of an “invisible hand” guiding the markets and somehow yielding the best social (not just economic -- note that the two are not the same) outcome. For him human beings are naturally social animals, with an instinct toward both cooperation and cheating. He cites recent experiments applying game theory to human behavior, showing that people punish cheaters, if the cost of doing so to themselves is relatively low, although cheaters remain alert to the possibility of cheating if they can get away with it. For Wilson this is the result of evolution by natural selection, which shaped our moral instincts in the distant past. The problem, according to Wilson, is that modern societies are much larger than the small groups that have characterized much of our evolutionary history. This means that we have to put in place regulations that for all effective purposes play the cheating-checking role that individual human beings can no longer effectively carry out.

Larry Arnhart, on the other hand, looks at the same exact situation, using the same theory of evolution, to argue, in his words, that “Darwinian science supports morality as rooted in moral sentiments, moral traditions, and moral judgments, and [that] such a morality sustains private property, free markets, the rule of law, and limited government.” He chastises Wilson for not explaining to his readers that Adam Smith (the originator of the invisible hand metaphor in his The Wealth of Nations) had a nuanced view of markets and society, distinguishing between the natural pursuit of self-interest and a sense of morality, and arguing that governments do need to provide a favorable environment to achieve a sensible balance between the two. In other words, even for Smith, completely free markets would be folly, given human nature. Perhaps Republicans should be made to read Smith before blabbering about the powers of the unfettered market.

What is wrong with all of this? To begin with, when two people can reasonably look at the same facts, interpret them through the same theory, and come to starkly incompatible conclusions, one might reasonably suspect that either the theory is wrong or that it simply does not apply. Since I think evolutionary theory is correct, I am inclined to conclude in favor of a case of misapplication. Let’s again start with Wilson. I couldn’t agree more with him when he says that metaphors -- such as the invisible hand -- have the power to guide people’s actions, and that that particular metaphor would best be set aside, forever. I also agree that experimental psychology and economics do tell us something interesting about the way human beings behave in terms of fairness, cheating, and cooperation. But he has not a single shred of evidence to back up his claim that our behavior in modern settings is the result of natural selection in Pleistocene (or any other) times. This is the perennial problem with sociobiology or evolutionary psychology, or whatever you want to call it. The argument is plausible, and Wilson may even be right; but plausibility does not a science make. We have no idea of what the social dynamics, selective pressures, and genetic heritability of high-level behavioral traits were in human populations during the relevant evolutionary period. Moreover, since these things are not going to be found in the fossil record, and because we have too few not-so-closely related species to compare with, we will likely never get beyond speculation in this area. Perhaps more importantly, Wilson admits that -- even if his ideas about the evolution of a balance between selfishness and cooperation in humans are right -- they are irrelevant in today’s environment because we don’t live in small nomadic bands anymore (thankfully, I shall add). Hence his call for government structure and regulation, which is really not that far from Smith’s own, even though Smith wrote before Darwin, and his analysis could therefore not be informed by evolutionary theory (another hint that the latter isn’t called for here).

Arnhart is even more off target. To begin with, he acknowledges that he is in favor of a “rule of law and limited government.” Right there this means that the discussion isn’t any longer about free markets vs. socialism/communism (I still find it sadly laughable that so many Americans don’t see a distinction between the latter two positions), it is a matter of where we draw the line. Again, Smith would have agreed; Wilson himself -- though mocked by Arnhart -- explicitly says that “we can argue at length about smart vs. dumb regulation but the concept of no regulation should be forever laid to rest.” Amen. Arnhart, however, in what has become a now predictable conservative move, engages in a flagrant case of arguing in spite of the evidence: “Free markets with private property under the rule of law regulate economic behavior by providing incentives to prudence. Individuals and firms with a stake in the outcome make decisions based on their processing of information. The rewards and losses from their decisions are concentrated on them rather than on taxpayers.” My ass they are. We live in a global economy, where “the tax payers” (citizens, people, citizens) actually do receive the brunt of the impact of bad economic decisions made on Wall Street, because when banks fail, our pensions, among other things, go down the drain. Moreover, for anyone to seriously argue that the people in charge suffer the consequences is criminally disingenuous, vis-a-vis the huge golden parachutes that are accorded CEOs of failing companies, and the ridiculously low rate of white crime prosecution and conviction (Enron, anyone?). Arnhart’s doublethink doesn’t stop there: he adopts a sarcastic tone about Wilson’s proposal to pursue smart regulations by stating “complex economy cannot be centrally planned because the central planners will never have enough knowledge or virtue to be trusted to do such planning.” But who has been talking about central planning? Regulation means to enact (and enforce) laws that reduce the all-powerful incentive to cheat; central regulation, instead, is an attempt to have the entire economy managed by a few people assumed to be capable of almost preternatural foresight. Central management is as idiotic an idea as a completely unfettered economic system.

Most importantly, though, both Arnhart and Wilson commit a most elementary logical mistake, what philosophers have been referring to as the naturalistic fallacy, and which was so clearly articulated by David Hume in his Treatise of Human Nature (also, incidentally, written before Darwin, though Hume and Smith were contemporaries and friends, and they influenced each other’s work). It is worth quoting extensively:

“In every system of morality, which I have hitherto met with, I have always remark’d, that the author proceeds for some time in the ordinary way of reasoning ... when of a sudden I am surpris’d to find, that instead of the usual copulations of propositions, is, and is not, I meet with no proposition that is not connected with an ought or an ought not. This change is imperceptible, but is, however, of the last consequence. For as this ought or ought not, expresses some new relation or affirmation, ‘tis necessary that it shou’d be observ’d and explain’d; and at the same time that a reason should be given, for what seems altogether inconceivable, how this new relation can be a deduction from others, which are entirely different from it.”

In other words, “is/is not” is a statement of fact, presumably verifiable by means of the examination of empirical evidence. “Ought/ought not,” on the other hand, refers to values, and can be defended by reason or appeal to “moral intuition,” but not by facts. The two may be connected somehow, but Hume chastises people who seamlessly glide from one to the other without bothering to explain how they made the connection. Both Wilson and Arnhart are telling us that evolutionary theory (which deals with facts, not values) is somehow informative on what we ought to do to create a more just society. But why should nature be a guide to what we ought to think is right or wrong? One can argue, in fact, that the whole point of human civilization is to get away from the natural order of things, defying natural selection, for instance, by the means of modern medicine, or defying gravity by way of airplanes.

It is not that nature is inconsequential or uninformative about our plague, the point is that it should not be used as a guide. Let me give you a simple example: a dietary application of the natural fallacy would be the argument that “if it is natural it is good,” something we actually do hear often enough, repeated in just the same thoughtless (as in, without thinking) manner that people talk about free markets. But one only need to remember the existence of poisonous mushrooms to realize that natural is not alway good. We do need knowledge of nature when deciding what to eat, but this knowledge comes into play both as a guide to what to eat and, perhaps more crucially, as a guide about of what not to eat!

I do not know whether human beings evolved to be largely cooperators, as Wilson maintains, or a bunch of selfish individuals who can rationalize their selfishness as natural morality, a la Arnhart. But I do know that we don’t want nature -- which is inherently a-moral -- to guide our moral choices, just in the same way in which we don’t want to eat poisonous mushrooms solely because they grow large and beautiful in the forest.