The Dismal Science:
After the twenty four regular assumptions of the ‘perfect market’ are listed on encycogov, the encyclopaedia of corporate governance, there is another small list of additional assumptions. Buried within this list is additional assumption no.4:
“Each person knows how to rank alternative commodity combinations available to him.”
This is a specific example of the unfounded single-mindedness that exists at the root of our economic systems. All free market economics assumes that there is such a thing as ‘complete information’ which ‘rational agents’ can acquire and use to make decisions, which are somehow objectively right. To put it simply, free market economics, and thus Capitalism, refuse to recognise the fact that different people have different ideals. There is scope within the system to recognise that different people opt for different combinations of commodities, but there is no recognition that some people (even ‘rational agents’) might not value commodities at all.
These people, colloquially known to the suited man as hippies or fools, not only make the free market economist’s job difficult, they show that his field of expertise is not a universal one. Economists generally assume that their profession is an attempt to understand, classify and predict the actions of the population. However, if the population (or one strand of it) reject the idea of giving value solely to commodities the economist is lost.
For example, if a shop owner is selling his goods at an unnecessarily low rate, the economist will assume that it is either an attempt at undercutting the opposition to drive them out of market or the shop owner simply lacks information. The possibility that the man is lonely and, unconcerned for monetary wealth, he is doing anything he can to bring in the punters in order to make some friends, cannot be accounted for within the economic system. When a wealthy businessman ‘finds god’, gives away all his worldly possessions, and becomes a monk, we should not assume an inability to “rank alternative commodity combinations available to him” but recognise his acceptance of a non-capitalist system. My point is that even when it comes to business our decision making has a range of goals and the acquisition of goods and wealth is just one of them.
With the possible exception of Steven Levitt, whose philosophy centres simply on “explaining how people get what they want”, economists are intrinsically single-minded. According to his co-author of the Freakonomics books even Levitt might not make the grade as an all encompassing, open-minded economist because, “Many people – including a fair number of his peers – might not recognize Levitt’s work as economics at all.”
Memeconomics:
So if the actions which economists call irrational or under-informed are normally in fact rational actions aimed at non-wealth-driven goals, what are people’s reasons for action? Well, now we have stumbled upon an interesting, if unfathomably difficult, question. One relatively new concept, which gives us some insight into quite how diverse and unpredictable our reasons for action are, is that of the meme. Memes are units of ideas and memetics is the science dedicated to explaining the existence, spread and destruction of ideas. The terms were coined by Richard Dawkins and attempt to capture the way in which, like our genes, ideas evolve through a process of natural selection. They survive from being passed from host to host through any manner of teaching, preaching or indoctrination. They die and go extinct when nobody believes them anymore.
If you are unfamiliar with memetics I strongly suggest watching this lecture by the American philosopher Dan Dennett (link). In it Dennett draws a wonderfully precise analogy between a physical parasite and a mental one. He gives the example of an ant which is continually climbing to the top of a blade of grass, this is a natural phenomenon that can be seen in nature and is a seemingly unproductive process. For no recognisable reason some ants just climb up blades of grass over and over again. As a society dominated by Darwinism we ask, “What is the biological purpose of that action?” The answer is that there isn’t one; not for the ant at least. In truth, the ant has been infected and hijacked by a brain parasite which literally burrows into the ant’s brain and forces it to climb grass. Now what is the purpose of this I hear you scream! Well, the parasite can only lay its eggs in the stomach of a sheep or a cow, and thus it needs some way of getting in there. The answer: steal an ant as transportation and then climb up grass in order to be eaten by the next passing grazer.
Very quickly we can see a parallel with a frightening amount of human action. It is not too difficult to find human behaviour that seems genetically detrimental. When we see anyone die for their ideas we ask the same question that we asked with the ant, “What is the biological purpose of that action?” Again, we find that there isn’t one. Except of course for the idea: if someone dies in the name of freedom then the idea of freedom is propagated; and if someone forgoes having any children in the name of faith then that faith gains recognition. The moral of the story is that ideas are like viruses. This does not mean that they are all bad, some can help to bring happiness or prosperity, but that they are living things which exist in us and can use us to procreate. Ideas drive us to unbelievable lengths and the fact that we have a communicative society accentuates the point; the ant can only climb alone, we can convince others to climb with us. Imagine if the ant was capable of communicating his desires, soon there would be anthills as high as skyscrapers as the infected ants convinced the others that climbing up is the only ideal worth striving for. An ant-built tower of Babel would not be far behind.
Going back to the question of human action in commerce, we now see that any economic model that assumes that commodities and wealth are man’s only goal is going to miss the mark. The Capitalist ideal of a free-market is a very basic Darwinian model: everyone strives for one goal and those most suited to the environment survive. Capitalism is founded on the thought that it’s a dog eat dog world. But what happens when we encounter phenomena which cannot be explained by such a simple survival-of-the-fittest model? The existence of memes shows that in many cases our original instincts concerning the actions of man are incorrect. Why do the ‘hippy’, the monk, and the lonely shop owner forgo wealth? The same reason the ant climbs to the top of the blade of grass: there is something in their heads that tells them to. Striving for cash is no different though: why does the entrepreneur give up family and friends just to make money? Because he has a brain parasite of sorts too.
What this all leads us to is an undeniable recognition of the various actions of man and their multifarious aims. We are prone to thinking that at the end of the day, even though we go about it in different ways, everyone is striving for the same thing. That thing we tend to dub ‘happiness’, but because of its diverse nature, the concept is all too easily bastardised. The capitalist model assumes that happiness is equivalent to prosperity, the Christian model assumes happiness is equivalent to God, the communist model assumes happiness is equivalent to equality; the list goes on. Of course, none of these belief systems gets it quite right. These systems are examples of the memes that control our minds, they are in no fit position to dictate any omnipresent, human value.
I am not trying to claim that capitalism, Christianity, and all other belief systems are inherently wrong. I only say that we must recognise them for what they are, namely selfish ideas which have evolved through a process of survival of the fittest to control and guide the minds of men. I am also not claiming that we should attempt to kill off these controlling memes, I will not be out in the streets tomorrow with a hand-painted sign which reads “Kill communism” or “Lets make religion extinct”. The most frightening fact of all is that ‘meme’ is just a byword for ‘idea’ and the mind free of memes will also be free of ideas. I only hope that through a recognition of the way that ideas spread through us and guide us, we can become less attached to them. If we see the free-market as a useful idea which has endured in us over time through a process of survival of the fittest, then we will also be ready to let it mutate when it is not doing its job. Just as in the animal kingdom a species will die out if it cannot mutate to a change in its habitat, in the memetic kingdom ideas will die out too. This is not a sad thing to be fought against. No beliefs are absolute and dogma brings nothing but danger. We must accept change in our ideas and see them as one of the many equal species rather than hold them up as immaculate productions of a human God.