Saturday, May 05, 2007

Read Darwin and Adam Smith (and Malthus)

Jonah Lerer, author of ‘Proust Was A Neuroscientist’, to be published by Houghton-Mifflin in 2007, posts (here) on his Blog: The Frontal Cortex, ‘Darwin as a Writer’, quoting from Jonathan Weiner, author of the magisterial 'Beak of the Finch' (though I could not find the paragraph quoted below on the reference he gave).

Consilience. Has there even been a more consilient thinker? Darwin took the political economy of Malthus, merged it with the invisible hand of Adam Smith, and applied it to the history of life. Economics has never been more useful.”

That Darwin read Malthus and Smith is known from his papers, and they were inspired choices for his theory of natural selection.

If you look at Malthus population theory and apply it backwards to human society for much of its history to before the 15th century, there is a case for a Malthusian population theory being a useful analytical tool for explaining the dynamics of subsistence for the overwhelming majority of the population.

I have not inquired deeply into this connection, but reading Smith’s Lectures in Jurisprudence (1762-3) as background to both Moral Sentiments and Wealth of Nations, and applying his elementary growth model to ‘rude’, hunter-gatherer, society, and what followed in shepherding and agriculture, and early commercial society, all experienced before the 5th century, I can see a Malthusian core to what happened throughout the millennia as far as population curbs operated. Per capita consumption for the majority was close to subsistence and fairly constant, with blips occurring occasionally.

Surpluses, such as they were, did not set of chains of growth to sustain rising populations coincident with higher per capita consumption. Population growth there was but per capita consumption did not grow a great deal, if at all. The surplus output went into ‘magnificent’ but expensive construction (‘ancient monuments’ now), and defence, plus higher per capita consumption for rulers and their armed retainers. As civilisations came and went, the norm for the human populations was subsistence levels of consumption.

However, this began to change in the revival of growth through commercial markets from the 15th century, documented in Wealth of Nations. When science and technology became drivers of the commercial mode of subsistence, the growth in population (a normal Malthusian response) and in general, not just elitist, per capita consumption (an unprecedented self-sustaining Smithian growth response), a unique period in human history commenced and the world entered sustained long-term growth on a global scale.

The Malthusian drag was suppressed (though not eliminated), first for small centres of population in Western Europe, then North America, and in the last fifty years for wider sections of the human population around the world (with, of course, other places, such as India and China, still transforming to Smithian growth, and others, such as Africa, yet to be affected).

Darwin on natural selection is worth reading, for those who have not yet done so, and with the 150th anniversary of Origin of Species (1859) about to be celebrated with shoals of books about the man and his science, there will soon be little excuse for evading the task (I think his ‘Descent of Man’ is also worthy of your attention). Of course, Darwinian science has moved on a great deal since the 19th century, and no doubt there will be plenty of topical books bringing natural selection up to date – plus, as ever, the numerous controversies among the neo-Darwinian will be well represented by 2009 – but read these works within a background embedded in Smithian economics and Darwin (and Malthus) will make a lasting impression on your thinking about economics.

I won’t elaborate on this occasion, but when I undertook this exercise ten or so years ago, it struck me that we teach economics in our time as if the economics we teach is about an ideal system, secure in itself with a life of its own, yet in the long view of human economy, such as Smith understood it, it has been anything but ideal, nor can it be captured by the likes of an equation. Economists today spend too much time studying a world that does not exist and never has existed, and like never will exist (the last is a tentative assertion). A bit more time studying the world as it is might do their insights of what is really going on a dose of good.

[Note: I am passing on the refernce to Smith's 'invisible hand' .. too busy this morning.)


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