On the Errors of Robert Franks. Again

Erica Augenstein posts (29 November) in The Cornell Daily Sun a report of Robert Frank’s idea that Charles Darwin was the founder of economics, not Adam Smith
HERE

“Cornell Professor's Theory Relates Economics to Theory of Evolution”

“Prof. Robert Frank, management and economics, detailed his new theory of how capitalism can be explained by Darwinian concepts at a lecture in the Plant Sciences building on Monday.

As detailed in his recently published book, The Darwin Economy, Frank explains that natural evolutionary behavior leads people to consume more in order to compete with the relative wealth of others.

For instance, “The middle class admires the rich and attempts to mimic them, which leads to more consumption,” Frank said. These behaviors allow individuals to fight for resources in the global market, much like animals in a Darwinian system.
Frank said that the parallels extend to the potential drawbacks of Darwinian evolution. Just as some evolution creates inefficiencies for animals, some habits of individuals in the marketplace, such as conspicuous consumption, can hurt people.
“The large antlers on the bull elk are good for winning battles for females, but make the bull elk more cumbersome,” Frank said. “This behavior is brought on by competition like a military arms race.”

This Darwinian theory provides an alternative to Smith’s “invisible hand” theory, which suggests that deregulation allows self-interest to advance societal interest. However, Frank’s theory is not meant to absolutely contend with Smith’s, Frank said.
“Smith explains how often there are effects of self interest. I have no quarrel with his insight,” Frank said.

Frank said he disagrees more with contemporary disciples of Smith who, he said, wrongly interpret the principle of the invisible hand to be the sole determinant of the forces of capitalism.

“It is not the whole story,” Frank said of this interpretation. “It is a naïve version of Smith.”

Comment
Frank’s views on Charles Darwin are naïve versions of natural selection. For example: “The large antlers on the bull elk are good for winning battles for females, but make the bull elk more cumbersome,” Frank said. “This behavior is brought on by competition like a military arms race.”

Elks compete for sexual access to females. It is in their nature (and found in all living creatures that breed by sexual activity). Elks engage in sexual competition whether they had large or small antlers and some elks with small or smaller antlers continue to have progeny. Because of genetic changes some elks gain an advantage over other males from their bulk and strength. They have more progeny as a result, passing on their genes to more descendants. But they do not have any control or consciousness of their genetic inheritance and they could never consciously choose the size of their antlers. They cannot ‘mimic’ rivals with larger antlers ever! They have no control over their genes. By the time they are born it is too late. The size of their antlers is already determined.

Franks does not seem to understand natural selection. In comparing the participants in an economy, who consciously choose their actions within social constraints, with the blind forces of natural selection, Frank is in error. His is “a naïve version of Smith.” Therefore, he mistakes the so-called antler behaviours as an ‘arms race’.

It’s the wrong metaphor, much like his misunderstanding throughout his book of Smith’s use of the IH metaphor.

Frank’s version of Darwinian theory: does not provide an “alternative to Smith’s “invisible hand” "theory” on two counts.
First count is that Adam Smith never had a ‘theory’ of ‘an invisible hand’. Frank got that misattribution from modern economists, most not having read Wealth Of Nations, including, on this reading, suspect neither has Frank (see my review of his book on Lost Legacy in 2 parts, 23 September 2011). The other count is that Darwin never had a theory of natural election as represented by Frank’s misattribution.

Another Review of Robert Frank's 'The Darwin Economy'

Matt Thompson, an adjunct assistant professor in the Department of Sociology and Criminal Justice at Old Dominion University. He was once cast as a soldier in Andrew Jackson's army in a theatrical production on an Indian reservation, reviews Robert Frank’s new book, ‘The Darwin Economy: liberty, competition, and the common good’, Princeton, New Jersey, Princeton University Press. September 2011 (reviewed on Lost Legacy, 23 September):

“Darwinian Tax Reform” posted on Savage Minds blog (HERE):

I think Matt Thompson understands Darwinian natural selection better that Robert Frank:

“Prima facie the notion of applying ecological theory to challenge our understanding of the national economy sounds intensely intriguing. So it was with great expectations that I read economist Robert Frank’s recent NYT piece based on his new book, “The Darwin Economy.” He presents the same idea in precis, here. Unfortunately the results did not live up to the promise of such an innovative idea. …

Nowhere does Darwin say that competition among individuals does not always produce results beneficial to the group. That is a conclusion Frank comes to because he’s reading through this lens that forwards agenda for new tax policy. Natural selection doesn’t care about groups, it only ever acts on individuals. It doesn’t really care about survival either, rather “winning” at natural selection means reproductive success. Evolution is the aggregate result of natural selection shaping the frequency of variations within a population. Therefore, no bull elk would have a huge and unwieldy rack of antlers if the benefits of having them did not outweigh the costs. …

Something’s wrong here and it begins with Frank’s misreading of Darwin. The example of elk’s antlers is, properly speaking, one of sexual selection. In “On the Origin of the Species” (1859) Darwin presented his theory of evolution by natural selection, which wonderfully explained why all polar bears have thick coats and all giraffes have long necks. Over time any trait beneficial to the individual will spread through the population if it helps them adapt to selective pressures in their environment. But Darwin struggled to explain things like the ornate patterns of butterfly wings, which don’t seem to have anything to do with the environmental pressures, or the peacock’s tail which, frankly, seems to be detrimental to the individual’s survival.

It wasn’t until “The Descent of Man” (1871) that Darwin hit upon the theory of sexual selection. These things are not to enhance the survival of the individual or help them adapt to the environment but to advertize their fitness as a mate. Frank’s elk example fails because he only considers the male’s point view. Males compete, but females choose. It is female choice that has led to spread of large antlers through the elk population not male competition.

Males and females have different reproductive strategies stemming from the fact that they invest different amounts of energy into the reproductive process. Females have a limited number of eggs, when they are pregnant they cannot take another mate, and after giving birth spend time and energy caring for the young. In terms of reproductive success, females do best when they are choosy and pick a male endowed with the best genes. Males can produce sperm by the millions and after taking one mate can increase their fitness by quickly taking another. Males improve their reproductive success by competing with other males in an effort to increase the quantity of females they mate with.

If you can take that and apply it to economics, great. But that’s not what Frank does. To him Darwin’s theory is just a handy metaphor.

Nowhere does Darwin say that competition among individuals does not always produce results beneficial to the group. That is a conclusion Frank comes to because he’s reading through this lens that forwards agenda for new tax policy. Natural selection doesn’t care about groups, it only ever acts on individuals. It doesn’t really care about survival either, rather “winning” at natural selection means reproductive success. Evolution is the aggregate result of natural selection shaping the frequency of variations within a population. Therefore, no bull elk would have a huge and unwieldy rack of antlers if the benefits of having them did not outweigh the costs. …

Frank’s usage of Darwin does not go beyond analogy. Essentially it amounts to little more than a rhetorical move whereby the economist seeks to borrow Darwin’s authority to sell his idea of a progressive consumption tax. Incidentally, I had never heard of such a thing before and maybe it’s a worthwhile policy to consider. But it has nothing to do with Darwin or natural selection.”

Comment
I concur with Matt Thompson. I do not believe that Frank has properly stated Charles Darwin’s views. I do not accept that Frank properly portrays Adam Smith’s ideas on competition. He is too much befuddled by modern attributions of what he calls Smith’s ‘disciples’ – more like his epigones.

Whether economists in a hundred years switch to praising Charles Darwin as the ‘father of economics’ in place on Adam Smith is an unknowable proposition, hardly worth arguing about. I am not sure even that proposition is worth arguing about in place of claims that Adam Smith is due that title, whatever it means.

I do know that Frank’s understanding of Darwin is as credible as his misunderstanding of the Adam Smith born in Kirkcaldy in 1723, at least on the evidence of ‘The Darwin Economy: liberty, competition, and the common good’, Princeton University Press.

Adam Smith and Darwin: new book by Robert Frank

“Darwin, the Market Whiz” (HERE):

“WHO was the greater economist — Adam Smith or Charles Darwin?”

“Since Darwin, the pioneering naturalist, never thought of himself as an economist, the question seems absurd. Yet his understanding of competition describes economic reality far more accurately than Smith’s. Within the next century, I predict, Darwin will be seen by most economists as the intellectual founder of their discipline….

…. In a nutshell, Darwin’s simple insight reveals that the modern economy is not only far less efficient than Adam Smith’s modern disciples think it is, but also that it would be relatively easy to improve matters. That simple truth will someday be self-evident. But until then, the wasteful aspects of the competitive process will continue to impose enormous costs on everyone.”

Comment
Presently, I am reading Robert H. Frank’s book, ‘The Darwin Economy: liberty, competition and the common good’ , Princeton University Press, September, and I shall post my review of it shortly.

The link in Ocala.com above is not a review – it presents Robert Frank’s views without much comment across 6 pages. Follow the link and see what you make of it. We shall discuss it in the coming week.

Worth a Look, But Beware Too Sloppy Thinking

nemo” writes in the Darwiniana Blog on (HERE) :

“The connection between Darwinism and capitalism is direct: the ideology of markets first proposed by Adam Smith (or, rather, his prededessors) suggested that random processes could generate order of some kind. And this idea became the backdrop to the similar sense that natural selection left to itself would produce biological order. Part of the reason for all this lay in the difficulty of really understanding evolutionary dynamics, and the clutching at straws, via economic ideology, to explain it. The obvious resemblance of jungle conflict and market competition was part of the confusion. 
The catch here is that the real dynamics of evolution is something totally different.”

Comment
An interesting thought, though it is not obvious to me what is the nature of a “direct connection” between “Darwinism” and “capitalism”. A lot would depend on what is meant by “Darwinism”, a broad enough idea – is it Darwin’s ideas as written in his several books, or what comes from the broad set of ideas, both right and wrong, associated with Darwin’s name under various guises? Add the numerous actual forms of capitalism practised in the world, the numerous theories of capitalism since the 19th century, including the various contributions of authors before then and before the broad experiences of capitalism as we now know it were written about by several 17th-18th century authors and analysed by 20th-21st century historians?

In so far as natural selection (i.e., what actually happened) is used to explain the natural evolutionary forms of life and the natural evolution of social arrangements across human societies, there is a potential set of imperfectly analogous (not necessarily identical) processes worth studying.

It is right to be wary of “obvious” and misleading ideas of a “resemblance of jungle conflict and market competition”, which smacks of ideology rather than considered thinking. Notions of “Social Darwinism” have always been more a source of avoidable confusion than enlightenment, much like so-called “laissez-faire” has burdened economics.

Natural selection is blind – it does not aim anywhere. It can lead to dead-ends (the extinction of life forms and sick societies among human communities). The fossil record tracks extinctions and the detritus of scattered former stone buildings and earlier stone tools tracks the extinction of past societies.

Preliminary Announcement of New Book by Robert Frank

Robert H. Frank, economics professor at Cornell's Johnson Graduate School of Management, has written a new book, The Darwin Economy:
 Liberty, Competition, and the Common Good
, Princeton University Press, to be published in September by Princeton University Press.

From the publisher’s advance notice, they kindly sent to me, we find this paragraph showing that Professor Frank misreads Adam Smith’s writings on competition and apparently forgets his writings on Moral Sentiments.

Instead he parades the usual, invented myth about the so-called Adam Smith ‘theory of the invisible hand’:

“Smith's theory of the invisible hand, which says that competition channels self-interest for the common good, is probably the most widely cited argument today in favor of unbridled competition--and against regulation, taxation, and even government itself. But what if Smith's idea was almost an exception to the general rule of competition? That's what Frank argues, resting his case on Darwin's insight that individual and group interests often diverge sharply. Far from creating a perfect world, economic competition often leads to "arms races," encouraging behaviors that not only cause enormous harm to the group but also provide no lasting advantages for individuals, since any gains tend to be relative and mutually offsetting.”

Comment
On the basis that he gets a central core of his argument wrong about Adam Smith, I worry about the other basis of his argument about Charles Darwin on competition in natural selection.

I have not read the book yet but I shall review it on Lost Legacy for a final judgement (publisher’s blurbs are written their staff and are not totally reliable). Though the myth is now ubiquitous and endemic. I think it more likely that the myth will be dispensed with (see Warren Samuel's new book on the Invisible Hand that looks highly promising in this regard).

From the Lost Legacy Archives, 2009:

‘Myths About Charles Darwin and Adam Smith’

‘Len Hart writes The Existentialist Cowboy Blog HERE: and posts an article “H. L. Mecken Covers the ‘Monkey Trial’ “, in which he includes the following’:

“Interestingly, the term "survival of the fittest" was never used by Darwin”

“Evolution is often considered to be so true as to be trivial: what survives. Critics of Darwin will often cite the tautology though it does not support them; it supports Darwin. Species that survive pass on their genes as well as their mutations. This is quite beyond debate. Every farmer who has bred animals for specific characteristics knows the truth of it. And every cowboy will tell you that if you kill a slow roach, you improve the breed. Evolution! Adaptation! Natural Selection!

Some of the more subtle critics of "Darwin" say that "survival of the fittest" is a circular argument: the fittest are those who survive, and those who survive are deemed fittest. There are problems with that:

1. Darwin (allegedly) never used the term "survival of the fittest"! That dubious honor belongs to Herbert Spencer, a "Social Darwinist" who never understood Darwin - nor was he very "social"!

2. Even if the term "natural selection" is more properly substituted for the bogus term "survival of the fittest", the argument is circular only if the invalid conclusion that "only the fittest survive" is added! The invalid value judgment –survival of the fittest –is falsely attributed to Darwin.”

My original 2009 Comment
I am not wholly in disagreement with Len Hart’s article (on the Scope’s Trial) but in the interests of protecting Charles Darwin’s legacy (much like I strive to protect Adam Smith’s legacy, Len Hart (NO DOUBT IN GOOD FAITH) distorts Darwin's legacy.

I often seen the denial that Charles Darwin ever used the term: ‘survival of the fittest’; the statement's origins is more often associated with Herbert Spencer, yet Darwin mentions to ‘survival of the fittest’ several times in his book, The Descent of Man and Selection in Relation to Sex, 1871, John Murray, London.

An example, one of several, is found in Chapter IV, “Of the Manner of the Development of Man from Some lower Form” (page 157 in the photo reproduction Princeton University Press edition, 1981):

“In an area as large as one of these islands, the competition between tribe and tribe would have been sufficient, under favourable conditions, to have raised man, through the survival of the fittest, combined with the inherited effects of habit, to his present high position in the organic scale.”

It is interesting to see myths that become "facts" merely by repetition as they spread round the world with ease, but which are contrary to the real facts.

Clearly, the epigones re-presenting Darwin’s ideas, are like the epigones who have represented Adam Smith’s ideas since the 1950s, and who have not cared to read the authors they quote from with authority (in Adam Smith’s case, some of the perpetrators of the myths about him received the accolade of Nobel Prizes and still haven’t read Adam Smith beyond a few quotations).

It's best to remember that in my often expressed view that the 'patron saint' of all students everywhere is St Thomas, also known as 'doubting Thomas'.

I always used to warn first year students, and on occasion reminded final year students, never to trust what they were told solely by their lecturers [including me], but to always check for themselves by reading all references their lecturers asserted that justified their claims about what others were supposed to have written or believed in.

[Note: I have tidied up the above post slightly]

Yesterday (June 2011) a reader posted a comment to me:

‘Last summer, while on a visit to Glasgow, I came across a statue of Adam Smith in the Crystal Palace. He is shown naked, in a sitting position, with a monkey on his knee. I took a picture, but didn't capture the details of the description. It referred to Smith and Darwin, but I can't remember the interpretation of this analogy. My emails to the Crystal Palace have gone unanswered. Can you shed any light on this?’

Today’s Comment
I cannot help this reader, though I lived in Glasgow for many years as a student and, later, as a youngish Senior Lecturer in economics. If there was such a statue of Adam Smith and the monkey, I do not know of it.

I know there is a statue of, or rather representing, a rather too handsome Adam Smith at Glasgow University.

There is also a recently erected statue of Adam Smith in Edinburgh, across the road from the ‘City Chambers’, where he worked as a Commissioner of Customs from 1778 to 1790 (his grave in further down the Royal Mile/High Street at the Canongate Church, and next door is where he lived, Panmure House.

[Visitors to Edinburgh wishing to see these sites, should contact me, and if I am in Edinburgh and reasonably fit, I would be delighted to take you to see them.]

However, If any reader does know anything about this sighting of an Adam Smith with a monkey statue in Glasgow, please drop me a note and I shall post here.

A Must Read for Lost Legacy Readers

Matt Ridely reviews for Nature magazine Tim Harford (HERE);

Trial and Error

'Charles Darwin’s big idea — that blind trial and error can progressively build a powerful simulacrum of purposeful design — got pigeonholed under biology. Yet it always had wider implications in economics, technology and culture. Darwin probably drew some elements of his bottom-up thinking from the political philosophers of the Scottish enlightenment, notably Adam Smith and Adam Ferguson. Biology is now
returning the favour.

Books such as Steven Johnson’s Where Good Ideas Come From (Allen Lane, 2010), Kevin Kelly’s What Technology Wants (Viking Books, 2010) and Brian Arthur’s The Nature of Technology (Free Press, 2009) are suffused with concepts from natural selection, as is my own, The Rational Optimist (Fourth Estate, 2010). Tim Harford’s Adapt follows this tradition, focusing on the key role of failure — the ‘error’ in trial and error — in economic and social progress.

Harford’s thesis is that “trial and error is a tremendously powerful process for solving problems in a complex world, while expert leadership is not”. Whether designing computer games, improving foreign aid or discovering how to knock out genes, the heroes and heroines of Harford’s book get results not by designing clever solutions and imposing them but by trying variations and selecting the few that work from among the many that don’t. Intelligent design is just as bad at explaining politics and business as it
is at explaining evolution.

Harford’s case histories are well chosen and artfully told, making the book a delight to read. But its value is greater than that. Strand by strand it weaves the stories into a philosophical web that is neat, fascinating and brilliant. Like the best popular science, it advances the subject as well as conveying it, drawing intriguing conclusions about how to run companies, armies and research labs.

The book’s message will be music to the ears of many scientists, for Harford exposes the dismal inefficiency of the preconceived, top-down grant-giving that funds much of modern academic research. He celebrates instead the power of prizes and blue-sky funding, and even molecular geneticist
Mario Capecchi’s documented Nobel-winning decision to use grant money given for
one purpose for another. Innovation and discovery come from pluralism and serendipity,
not command and control.
Yet this will also be an uncomfortable book for some scientists who read it carefully. For however much they celebrate bottom-up, emergent, evolutionary order in the genome or an ecosystem, most scientists embrace intelligent design as soon as they turn to politics or economics, with government
planning playing the part of God. The messy, competitive, pluralistic, unplanned nature of the marketplace is too often anathema to the scientific mind.

A good example is climate policy. Harford shows how exhortations from on high to people to cut their carbon footprints, or winner- picking by governments for advancing certain technologies, is ineffective and counterproductive. Why? Because, he explains (citing chemist Leslie Orgel), “evolution is smarter than we are, and economic evolution tends to outsmart the rules we erect to guide it”. A planning rule that forces British developers to install a minimum amount of on-site energy generation in new office buildings has led to the lunatic spectacle of convoys of diesel-drinking trucks taking carbon-rich wood from forests to biomass boilers in city centres because solar and wind power cannot meet the requirements on such small scales.

Trial and error cannot be used for everything. Nuclear power stations and banks must work without melting down lots of times first. Harford’s analysis of what went wrong at the Piper Alpha oil-rig explosion
in the North Sea, the Three Mile Island nuclear meltdown in Pennsylvania and the Lehman Brothers bankruptcy in the United States is illuminating and intelligent. Ineffective safety systems, latent errors and overlooked whistleblowers are common in all such disasters, but the key ingredient is tight coupling: the systems were designed so that if one part failed, others went with it. To eliminate errors, writes
Harford, is “an impossible dream. The alternative is to try to simplify and decouple these
high-risk systems as much as is feasible.”

Harford provides some evidence that a new era of evolutionary business is dawning, although the basic idea is as old as the limited-liability company — “a safe space within which to fail”. Companies such as Google have taken the model of the ‘skunk works — the name for the trial-and-error division of Lockheed that came up with the U2, the blackbird and the stealth bomber — and rolled it out through the whole firm,
by encouraging employees to spend 20% of their time on their own projects. Google’s products, as well as its ideas, are designed so that they evolve by trial and error.

Yet vast swathes of the world are resistant to the implications of this selective approach. Government agencies, academic institutions and financial behemoths are not allowed to fail. “Government regulations,” writes Harford drily, “by their very nature, tend to be somewhat impervious to the possibility of improvement.”

It would be hard to improve Harford’s outstanding book. If pressed, I might say that the focus on variation and selection leaves no room for discussion of the other elements of evolution, especially replication
and recombination. Nonetheless Adapt is fine, funny and fluent.

Comment
I have taken the liberty of reproducing Matt Ridley's review in full (apologies to the RATIONAL OPTIMIST for the impertinence, but it is so good and insightful it deserves a wide readership, as does, Tim Hartford's new book (always an exciting author to read regularly).

Wrong On Darwin, Right on Adam Smith

'The Age of Empathy' by Dutch psychologist and primatologist, Frans de Waal, using primate tendencies as a model, contends that humans are hard-wired for compassion. In Los Angeles Times by Sara Lippincott, a freelance editor specializing in science. HERE:

“De Waal's principal thesis is that when contemplating our evolutionary heritage, we see ourselves more as natural-born competitors than natural-born empathizers and cooperators. "[U]ntil recently," he writes, "empathy was not taken seriously by science. Even with regards to our own species, it was considered an absurd, laughable topic. . . . " Some of us indeed have tended to think like Social Darwinist Herbert Spencer, who coined the phrase Darwin has been unfairly stuck with: "survival of the fittest." Indeed, some, like Hitler and the American and British eugenicists of the early 20th century, have tended to think that only the fittest ought to survive. But De Waal's readership is probably aware by now that altruism too has been built into the animal kingdom.

Nevertheless, he rightly argues that we modern humans need to recognize and cultivate our fellow feeling, "an innate age-old capacity" that has been naturally selected for -- for the excellent reason that without it we would have gone extinct long ago. "It's not as though we're asking our species to do anything foreign to it by building on the old herd instinct that has kept animal societies together for millions of years," he writes. "Every individual is connected to something larger than itself. . . . The connection is deeply felt and . . . no society can do without it."

De Waal bolsters his case with plentiful anecdotes of sweet-natured primates and contemporary examples of ill-advised human cold-bloodedness (Enron, the response to Hurricane Katrina). Along the way, you learn a lot of interesting primatological arcana, such as that apes can't swim and invariably defecate when excited.

In concluding, De Waal points out that Adam Smith, the alpha male of free marketeers, has consistently been misunderstood. Smith's disciples "leave out an essential part of his thinking, which is far more congenial to the position I have taken throughout this book, namely, that reliance on greed as the driving force of society is bound to undermine its very fabric."

Comment
Frans De Waal is a much respected scientist, often working at the frontier of primate studies and human societies. Hence, when Sara Lippincott attributes to Darwin the following statement:

“Social Darwinist Herbert Spencer, who coined the phrase Darwin has been unfairly stuck with: "survival of the fittest",

I am a loss to explain from where she got her ideas about the origins of the phrase, "survival of the fittest”. I am sure they do not come from Frans De Waal; at least I hope not, because Frans will be familiar with Charles Darwin’s, The Descent of Man and Selection in Relation to Sex’ (1871: John Murray, London) and Darwin uses the phrase, survival of the fittest”, several times.

For example:

“In an area as large as some of these islands [New Guinea, Borneo, Australia], the competition between tribe and tribe would have been sufficient, under favourable conditions, to have raised man, through the survival of the fittest, to have the inherited effect of habit, to his present high position in the organic scale” (page 157).

Either Frans is momentarily forgetful, or, more likely, Sara she carelessly summarising Frans’ observation on how often Herbert Spenser used the phrase in his arguments as an epigone of Darwin.

By the way, for balance, we should add some fairly respectable people to Hitler’s name, among whom we have Marie Stopes, Emile Zola, Bernard Shaw, H. G. Wells, Woodrow Wilson, Theodore Roosevelt, John Maynard Keynes, Winston Churchill, and Sidney Webb.

The last paragraph, however, is encouraging. Greed had nothing to do with Adam Smith’s theories of how humans interact socially. That notion comes from popular misattribution of “greed” as a philosophy to Smith when it was, in fact, an idea of Bernard Mandeville’s (1724).

Matt Ridley on Consistency - or Lack Thereof

Matt Ridley writes the Natural Order of Things in The Spectator HERE:

“Today, generally, Adam Smith is claimed by the Right, Darwin by the Left. In the American South and Midwest, where Smith’s individualist, libertarian, small-government philosophy is all the rage, Darwin is reviled for his contradiction of creation. Yet if the market needs no central planner, why should life need an intelligent designer? Conversely, in the average European biology laboratory you will find fervent believers in the individualist, emergent, decentralised properties of genomes who prefer dirigiste determinism to bring order to the economy.”

Comment
This article is an excellent read and I highly recommend it you. The paragraph is but a taste.

Ridley makes an interesting case, slightly off centre in his depiction of Adam Smith, though what is attributed to Smith in the American South is probably as stated, but is somewhat at variance with his actual views, not that I would expect many on the Right to realise their misperceptions.

As for Darwin, I hadn’t thought of him as particularly in tune with leftwing thinking, as Ridley brings out the “individualist, emergent, decentralised properties of genomes”, which is a long way from the left’s passion for central control and regulation.

Yes, it is an uncomfortable clash of opposites, making consistency a rare dish for those with an appetite for it.

Another Inaccurate Claim About Adam Smith and Charles Darwin

W.C. Hayward, Editor of the Blog, Undismalization (‘towards a rational, constructive, non-ideological dialogue on economics and pubic policy') HERE
writes (14 July):

“The Flaws of Quasi-Darwinist Arguments for a Pure Laissez-Faire System”

“Adam Smith, having published The Theory of Moral Sentiments, in which the theory of “the invisible hand” first appears, precisely a century before Darwin’s Origin of the Species, created a model involving a “selection process” in the realm of commerce that could be said, from an analogous perspective, to anticipate Darwin’s theory of natural selection in the realm of biology.”

“Since Darwin, however, links between laissez-faire and Darwinist thinking have appeared frequently, at least in popular parlance, with the survival-of-the-fittest concept supporting the premise that a pure laissez-faire system is more efficient because it is more natural.”

Comment
Adam Smith did not have a ‘theory of an invisible hand’ in his Moral Sentiments (nor anywhere else). Whether such a non-existent theory by analogy ‘anticipated’ Charles Darwin’s theory of ‘natural selection in the realm of biology’ is also suspect.

As is ‘at least in popular parlance, with the survival-of-the-fittest concept supporting the premise that a pure laissez-faire system is more efficient because it is more natural.”

Natural selection is by definition ‘natural’, but ‘laissez-faire’ is certainly not, at least in the common understanding of being ‘natural’. Laissez-faire is anything but ‘natural’. Like Hobbes’s ‘state of war’ of ‘all against all’, laissez faire has never existed, anywhere on the planet throughout the history of the human race, at least as far as we can judge, even deep into pre-history; it certainly left no traces found by anthropology, so far.

Adam Smith was quite critical of Dr Quesnay , the French economiste, whom he admired so much, on the subject of what is often taken to be about laissez-faire (though Smith, familiar with the term laissez-faire never used the term at all):

“Some speculative physicians seem to have imagined that the health of the human body could be preserved only by a certain precise regimen of diet and exercise, of which every, the smallest, violation necessarily occasioned some degree of disease or disorder proportioned to the degree of the violation. Experience, however, would seem to show that the human body frequently preserves, to all appearances at least, the most perfect state of health under a vast variety of different regimens; even under some which are generally believed to be very far from being perfectly wholesome. But the healthful state of the human body, it would seem, contains in itself some unknown principle of preservation, capable either of preventing or of correcting, in many respects, the bad effects even of a very faulty regimen. Mr. Quesnai, who was himself a physician, and a very speculative physician, seems to have entertained a notion of the same kind concerning the political body, and to have imagined that it would thrive and prosper only under a certain precise regimen, the exact regimen of perfect liberty and perfect justice. He seems not to have considered that, in the political body, the natural effort which every man is continually making to better his own condition is a principle of preservation capable of preventing and correcting, in many respects, the bad effects of a political œconomy, in some degree, both partial and oppressive. Such a political œconomy, though it no doubt retards more or less, is not always capable of stopping altogether the natural progress of a nation towards wealth and prosperity, and still less of making it go backwards. If a nation could not prosper without the enjoyment of perfect liberty and perfect justice, there is not in the world a nation which could ever have prospered. In the political body, however, the wisdom of nature has fortunately made ample provision for remedying many of the bad effects of the folly and injustice of man, in the same manner as it has done in the natural body for remedying those of his sloth and intemperance.”
(WN IV.ix.28: 674-5)

What Smith is saying is that an economy can tolerate quite severe distortions in its purity of function without collapsing into disaster and that if a society, as most were and are, was supposed not to prosper unless if enjoyed ‘perfect liberty and perfect justice’ the evidence of the history human societies contradicts the assertion because ‘there is not a nation in the world which could ever have prospered’.

In short, perfect liberty and perfect justice – about as close as we can get to what now passes for laissez-faire – does not support “the premise that a pure laissez-faire system is more efficient because it is more natural”. It isn’t natural; indeed it would be most unusual, even unnatural, should laissez faire be established anywhere and anytime.

Attempts to link laissez-faire to Darwin’s natural selection, of which there has been a spate of them recently, falls at the first essential hurdle of empirical evidence.

The rest of W.C. Hayward’s piece makes an interesting case about the current condition in the USA (follow the link to see how much of it you agree with), but that is separate from his assertions about Darwin’s and Smith’s ideas.

Darwin’s books and notes form a formidable body of evidence for natural selection (he didn’t get everything quite right, but he took major steps forward before the world knew anything about inheritance, genetics and the genome).

Attempts to forge a link with Darwin and Adam Smith on the grounds quoted above ultimately fail because they create so-called analogies with their ideas, mostly fanciful.

There is a connection however; both took an evolutionary approach to change and in a future post I shall discuss the forms that they took.

Too Clever By Half on Smith and Darwin

Nitish Grover (FCA, AICPA Intl Associate) writes (13 July) in the Blog of the Gersham, Lehrman Group (‘Intelligently connecting institutions and expertise’) HERE, a piece on “The Invisible Hand, Trumped by Darwin” in the New York Times (discussed on Lost Legacy yesterday):

Nitish Grover writes a witty (speaking loosely) piece to the theme: “Charles Darwin, Adam Smith, Accounting and Financial Rules”. He gives an 8-step analysis, which is more than tendentious in my view.

“1.The invisible hand has always been there in accounting and in the development of financial products.”

Nitish does not explain how ‘an invisible hand’ manifests itself in accountancy (but then Adam Smith only mentioned it once in Wealth Of Nations where it is clearly a metaphor not an actual entity.]

“2. Natural selection (Darwin) speaks of adaptability and change. The invisible hand refers to a population of businessmen doing the right thing for a selfish motive.”

[Hold it! Where does Adam Smith speak of ‘selfish motives’ having anything to do with The Metaphor of ‘an invisible hand’? He does no such thing, which leads me to ask if Nitish has read Wealth Of Nations or has relied merely on a summary of modern interpretations, plus a couple of Hollywood films (‘Wall Street’, ‘Beautiful Mind’, and perhaps those scriptwriters influenced by Ayn Rand).

The traders mentioned in connection with The Metaphor were those who were risk averse to sending their capital across to the British colonies in North America (the Atlantic was dangerous to small ships, the people they dealt with in the colonies were not known to them, the local courts were an unknown element, though based on British Law, and their goods were out of their sight). Consequently, they preferred to invest locally, which on the arithmetic of the whole is the sum of its parts, each risk averse trade increased local investment larger than it would be if these traders joined the non-risk averse traders who did business in the colonies. How is risk-averse behaviour ‘selfish’?]

”3. While the invisible hand and the selfish motive are driven by greed the process of natural selection is slower and driven by the environment.”

[It gets worse! Now they are driven by ‘greed’. Nitish confuses Adam Smith with Bernard Mandeville (1724) and the ‘Fable of the Bees’, a common enough misattribution to Smith who regarded Mandeville as ‘licentious) (see his Moral Sentiments, 1759). Nobody who reads Wealth Of Nations would make that elementary mistake.]

“4. While the invisible hand has a short term perspective the natural selection is more strategy driven.”

[The Metaphor has no perspective at all – it's imaginary, not real. Darwin did not instill ‘strategy’ into natural selection; individual adaptations can develop to a series of short-term events – a regular food declines, alternatives are tried by some individuals, some new habits become more regular, which may solve one problem – survival – but may induce others that become terminal. Natural selection works on the individual and does not have foresight, nor does it always and inevitably ‘progress’ (former sea creatures can evolve into land creatures, and much later return to the sea).

Hominids that failed to adapt to the growing nutrition needs of a growing brain, remained with smaller brains, lived for a million years or more as a species and then died out as the environment changed or bigger brained hominids out competed them. Has Nitish actually read Darwin? Does he understand Darwin’s theory of natural selection? He hasn’t read Smith and I suspect he hasn’t read Darwin either.]

5. Accounting standards have evolved more over a period of natural selection and due process (Darwin).

[Economic behaviour has also evolved over long periods. Exchange behaviours did not suddenly turn into bargaining behaviour. They went through a series of changes from ‘gift behaviour’, through voluntary reciprocation (the ‘quasi-bargain’), reciprocation enforced by sanctions, to bargaining proper (‘If you give me X then I will give you ‘Y’ – or the simultaneous exchange). This process is no different than that of ‘accounting standards’, except that the evolution of bargaining took much longer, measured in millions of years, not just millennia – has Nitish ever read any anthropology?]

Nitish's items 6 thru 7 and 8 are meaningless. I said his article was ‘witty’ but perhaps it was more ‘clever’ than witty, but its cleverness was more entertaining than instructive.

[Disclaimer: the Gersham, Lehrman Group disclaim any responsibility for the contents of its authors' articles]

Was Adam Smith Trumped by Charles Darwin?

Thomas McQuade writes (12 July) in Think Markets (‘A blog of the NYU Colloquium on Market Institutions and Economic Processes’) HERE:

“Frank and Stein

In a recent opinion piece in The New York Times (“The Invisible Hand, Trumped by Darwin?”), Robert H. Frank proposes that Charles Darwin, not Adam Smith, should be seen as the real intellectual founder of the discipline of economics. He claims that Smith’s most famous idea – that the competitive pursuit of individual self-interest can redound to social good – is but a special case of Darwin’s more general picture of competition in which individual benefit sometimes does, but often does not, benefit the larger group. The sort of competition for which the invisible hand does not work well is, he says, where the competition is for relative gain, i.e., when the rewards depend on relative performance, and people gain by bettering each other rather than by bettering nature.

The problem with Frank’s argument is his careless deployment of the analogy between human beings interacting in a highly structured social environment and animals in general interacting in an environment of considerably less social complexity. He is ignoring the effects of human institutions in constraining self-interested behavior. And compounding the error, he appears unable to distinguish between those institutions which provide constraining feedback and those which undermine and deflect such feedback.

The economic problem at hand is not, as Frank characterizes it, competition based on relative performance versus competition based on absolute performance. It is competition constrained by negative feedback versus competition freed from normal constraints. Successful social institutions, as well as providing positive incentives for personal gain, incorporate negative incentives for straying very far from conventional expectations. The interplay between these opposing forces can make for stable growth of the societal activity in question. It is the reason why science has been such a spectacularly successful social enterprise, and why markets, despite being set about by all sorts of monetary and regulatory interventions which weaken the feedback, have greatly increased human wellbeing.

Frank points to “the recent economic wreckage”, an instance of what can happen when “greedy people trade for their own advantage in unfettered private markets”, as evidence for his contention. Unfettered markets, if they existed, could certainly display greed, herding behavior and other “inefficiencies.

Adam Smith’s contention was that the pursuit of self-interest, constrained by appropriate social institutions, would be much more effective at producing societal wellbeing than actions which purported to aim at that wellbeing directly. And “appropriate” does not involve the overriding of constraining incentives. That is why so much of The Wealth of Nations is taken up with analysis and criticism of the social institutions of Smith’s day. Frank predicts that, 100 years from now, economists will point to Darwin as the owner of the shoulders they are standing on, not Smith. Let me make a competing prediction: that 100 years from now economists will look back and wonder how so many of their predecessors could have been so superficial in their appreciation of Adam Smith and, as a result, could have so completely misunderstood the economic events they lived through.

Comments
I think Thomas McQuade is closer to the truth than Robert H. Frank. In this month of celebration of Charles Darwin’s Origin of Species (1859), it is natural that writers look for new angles on both Adam Smith and Charles Darwin would compare with the banking crisis uppermost in our minds.

Robert Frank chooses to pit Darwin against Smith (albeit that Frank’s is a version of the Chicago Adam Smith rather than the Adam Smith born in Kirkcaldy in 1723). Even Frank’s contest for the supposed title of ‘the real intellectual founder of the discipline of economics’ is quite spurious (Smith was awarded the title today by others and with the supposed prestige of ‘inventing capitalism’ and or of being the ‘high priest of capitalism’, or similar hierarchical nonsense).

Frank writes: “Smith is celebrated for his “invisible hand” theory, which holds that when greedy people trade for their own advantage in unfettered private markets, they will often be led, as if by an invisible hand, to produce the greatest good for all. The invisible hand remains a powerful narrative, but after the recent economic wreckage, skepticism about it has grown. My prediction is that it will eventually be supplanted by a version of Darwin’s more general narrative — one that grants the invisible hand its due, but also strips it of the sweeping powers that many now ascribe to it.” (New York Times: HERE)

Smith is ‘celebrated’ by Frank for the invented reasons of modern economists (post-war in the late 1940s), not for what Smith actually wrote in Wealth Of Nations or Moral Sentiments. Smith never alluded to ‘selfish reasons’ and ‘greed’ (that was Bernard Mandeville, whom Smith described as ‘licentious’ in Moral Sentiments. Smith was made into a cartoon image by Hollywood script writers (‘Wall Street’ and ‘Beautiful Mind’). He certainly never claimed that “greedy people” will “often be led, as if by an invisible hand, to produce the greatest good for all” and it belittles Frank's credibility for him to claim that he did.

With such glaring errors about Smith, Frank's claims for Darwin are immediately suspect.

“The central theme of Darwin’s narrative was that competition favors traits and behavior according to how they affect the success of individuals, not species or other groups. As in Smith’s account, traits that enhance individual fitness sometimes promote group interests. For example, a mutation for keener eyesight in hawks benefits not only any individual hawk that bears it, but also makes hawks more likely to prosper as a species.”

Comment
At least Frank gets Darwin right. Of elks, Frank writes: “For instance, a mutation for larger antlers served the reproductive interests of an individual male elk, because it helped him prevail in battles with other males for access to mates. But as this mutation spread, it started an arms race that made life more hazardous for male elk over all. The antlers of male elk can now span five feet or more. And despite their utility in battle, they often become a fatal handicap when predators pursue males into dense woods.”

But is this not the same with Smithian competition? An individual exploits a handy source of raw materials, disregards the environmental damage, and enjoys prosperity for a while. He runs out of the resource, or the owners of the resource site impose heavy taxes, or take the resource over and run it themselves. Local maxima need not be higher than competitive maxima.

Frank: “Ideas have consequences. The uncritical celebration of the invisible hand by Smith’s disciples has undermined regulatory efforts to reconcile conflicts between individual and collective interests in recent decades, causing considerable harm to us all. If, as Darwin suggested, many important aspects of life are graded on the curve, his insights may help us avoid stumbling down that grim path once again.

The competitive forces that mold business behavior are like the forces of natural selection that molded elk. In each case, we see instances of socially benign conduct. But in neither can we safely presume that individual and social interests coincide.”

Comment
Frank notes that the “uncritical celebration of the invisible hand by Smith’s disciples has undermined regulatory efforts”, but which ‘disciples’ is he talking about? (Note the religious overtones of ‘disciples’).

The Kirkcaldy Adam Smith was quite clear on the need for regulations (or ‘police’ as they were called then) where ‘merchants and manufacturers’ misbehaved (see Smith’s discussion on regulating banks to curb the behaviours of ‘bold projectors’, WN II.ii.56-7: 304).

His reputation as a believer in ‘laissez-faire’ ideology is undeserved (he never used the words ‘laissez-faire’). Smith was no extreme ‘libertarian’, but he believed firnly in Liberty, tempered by the negative virtue of Justice, without which society would ‘crumble to atoms’; TMS II.3.4: 86).

How much of Adam Smith has Robert Frank actually read recently? He is, after all, an economist at Cornell, and a visiting faculty member at the Stern School of Business at New York University.

Frank adds: “The uncritical celebration of the invisible hand by Smith’s disciples has undermined regulatory efforts to reconcile conflicts between individual and collective interests in recent decades, causing considerable harm to us all.”

I would agree, but the ‘invisible hand’ celebrated by modern economists, many of them proud to wear the title of ‘disciple’ of the Chicago Adam Smith, is actually a crown of thorns: he never had a ‘theory’, a ‘concept’, a ‘doctrine, or a ‘paradigm’ of ‘an invisible hand’ (fir him it was a mere metaphor), and while such people, and the people they influence (for good money), parade their version of it to limit some regulations, they also have used their influence to continue the mercantile regulations, which Smith railed against in the 18th century, and which blight modern economies through various forms of protectionism and tariff policies, and they lower world living standards both at home and abroad, particularly in poorer countries.

Thomas McQuade ends his review of Frank’s article with a a comment on Frank's prediction that:

“100 years from now, economists will point to Darwin as the owner of the shoulders they are standing on, not Smith. Let me [Thomas McQuade] make a competing prediction: that 100 years from now economists will look back and wonder how so many of their predecessors could have been so superficial in their appreciation of Adam Smith and, as a result, could have so completely misunderstood the economic events they lived through.”

I completely agree with Thomas McQuade and give a thumbs down for Robert Frank.

Myths About Charles Darwin and Adam Smith

IMPORTANT NOTICE

ADAM SMITH’S LOST LEGACY HAS BEEN MOVED BY “BLOGGER”, THE HOST SITE, TO A NEW ADDRESS:

www.adamsmithslostlegacy.blogspot.co.uk

TO FOLLOW ALL 2083 POSTS (AND COUNTNG) FROM HERE TO 2012 AND BEYOND, PLEASE USE THE NEW ADDRESS.

THANK YOU

Gavin Kennedy

Len Hart writes the The Existentialist Cowboy Blog HERE:
and posts an article “H. L. Mecken Covers the ‘Monkey Trial’ “, in which includes the following:

“Interestingly, the term "survival of the fittest" was never used by Darwin”

“Evolution is often considered to be so true as to be trivial: what survives survives. Critics of Darwin will often cite the tautology though it does not support them; it supports Darwin. Species which survive pass on their genes as well as mutations. This is quite beyond debate. Every farmer who has bred for specific characteristics knows the truth of it. And every cowboy will tell you that if you kill a slow roach, you improve the breed. Evolution! Adaptation! Natural Selection! Some of the more subtle critics of "Darwin" say that "survival of the fittest" is a circular argument: the fittest are those who survive, and those who survive are deemed fittest. There are problems with that:

1. Darwin never used the term "survival of the fittest"! That dubious honor belongs to Herbert Spencer, a "Social Darwinist" who never understood Darwin, nor was he "social"!

2. Even if the term "natural selection" is more properly substituted for the bogus term "survival of the fittest", the argument is circular only if the invalid conclusion that "only the fittest survive" is added! The invalid value judgment –survival of the fittest –is falsely attributed to Darwin.”

Comment
I am not wholly in disagreement with Len Hart’s article (on the Scope’s Trial) but in the interests of protecting Charles Darwin’s legacy (much like I strive to protect Adam Smith’s legacy, Len Hart (NO DOUBT IN GOOD FAITH) distorts Daewin's legacy.

I have often seen the denial that Charles Darwin ever used the term: ‘survival of the fittest’; the statement's origins is more often associated with Herbert Spencer, yet Darwin mentions to ‘survival of the fittest’ several times in his book, The Descent of Man and selection in relation to sex, 1871, John Murray, London.

An example, one of several, is found in Chapter IV, “Of the Manner of the Development of Man from Some lower Form” (page 157 in the photoreproduction Princeton University Presss edition, 1981):

“In an area as large as one of these islands, the competition between tribe and tribe would have been sufficient, under favourable condition, to have raised man, through the survival of the fittest, combined with the inherited effects of habit, to his present high position in the organic scale.”

It is interesting to see myths that become "facts" merely by repetition as they spread round the world with an ease which are contrary to the real facts.

Clearly, the epigones re-presenting Darwin’s ideas, are like the epigones who have represented Adam Smith’s ideas since the 1950s, who have not cared to read the authors they imply they quote from with authority (in Adam Smith’s case some of the perpetrators of the myths received the accolade of Nobel Prizes).

It's best to remember that ther 'patron saint' of all students everywhere is St Thomas, also known as 'doubting Thomas'. I always warned first year students, and on occasion reminded final year students' never to trust what they were told by their lecturers, but always check for themselves by reading all references they asserted to justify their claims about what others were supposed to have written.

Sociability and Human Evolution

Darwiniana Blog (30 January) carries Freedom Evolves! Huxley’s Evolution #2: ‘We have discovered Huxley ’s evolution #2′ HERE:

“This ‘survival of the fittest’ aspect is, in any case, demonstrably false of man’s social experience, as the mechanism of cultural evolution. Thus extreme competition is met by the response of social law in the evolution of civilization, if not economy. And the place of Adam Smith here is entirely complex and misleading, this philosopher being a de facto source of a new ethics, even as his work is polarized between an economic and moral dimension. Survival of the fittest business firm is simply another process, as is the tonic of Olympiad sports competition. The issue of evolutionary causality in the study of the evolution of civilization has been so confused by assumptions of material causative motive, as in the imputation of economic determinism, that the real evolution of social cooperation seems to have been forgotten. In general, theories of evolution must themselves interact with the near future of all free action, in a confusion of external observer, and temporal participant, ‘acting out theory’.

Comment
“The issue of evolutionary causality in the study of the evolution of civilization has been so confused by assumptions of material causative motive, as in the imputation of economic determinism, that the real evolution of social cooperation seems to have been forgotten.”

Crude applications of evolution to economics systems are certainly flawed. Animal spirits of ‘red in tooth and claw’ competition, beloved of advocates of certain strains of corporatism, are toxic (to use a contemporary word in vogue) for the sciences of human behaviours.

I confess to not quite getting what John Lander (the author of the Darwiniana Blog) is on about in his claims for ‘eonic’ insight into these matters,especially with his apparent assertion that the Bible is ‘a document of interest,’ as police investigators call certain suspects, but I concur with his statement ‘the real evolution of social cooperation seems to have been forgotten’.

The sociability of primates, in particular the Hominine lineage through the evolution of about 18 species before Homo sapiens emerged dominant, is the key to understanding the crucial role that social co-operation – a set of behaviours, not genes – played in the biological evolution of our species over several million years.

I discuss this in my paper on the “Pre-history of Bargaining: an multi-disciplinary treatment, Part I”, which you may download from Lost Legacy’s Home Page (in red, at the top; just click and follow the link).

I am presently working on developing this paper and the research supporting it into a book-length treatment (title to be decided). Adam Smith, you may be assured, plays a major role in my approach, though most of today's epigones and their acolytes may not recognise the Adam Smith from Kirkcaldy. who was quite different from the so-called 'Adam Smith' from US academe.

A Fair Question: how many economists and biologists have read Darwin and Smith's Works

Paul Walker, a regular reader of Lost Legacy in Christchurch New Zealand Blogs at: Anti-Dismal ('A blog on all things to do with economics and related subjects') HERE:

“Shocked but not surprised

Tyler Cowen over at Marginal Revolution writes in a posting Blogging *The Origin of Species*,

“That is a worthwhile endeavor and you will find the blog here. Nonetheless I was shocked (but not surprised) to read the following:

“Evolutionary biologist John Whitfield is reading Origin for the first time and writing about it, chapter by chapter.

I would ask Tyler, if he is shocked but not surprised to learn that a biologist hasn't read Darwin, then how shocked, but not surprised, would he be to discover that few economists have read Adam Smith?”

Comment
I hope many more economists will read both Moral Sentiments (1759) and Wealth Of Nations (1776) in this 250th commemorative year for the publication of Moral Sentiments.

It is also the 250th commemorative year for the publication of Darwin’s Origin of Species, a book well worth reading.

I read it in 2000 while preparing my ‘Pre-History of Bargaining’ ms (you can read my paper, “The Pre-history of Bargaining: an inter-disciplinary treatment, part I”, by clicking on the link (in red) on the Lost Legacy Home Page).

I plan to re-read Darwin’s Origin of Species this summer, and his other books developing this theme as applied to Natural Selection and Sex, and his book on facial gestures among humans and other animals.

Adam Smith and Charles Darwin

The Sensuous Curmudgeon [SC] Blog (16 December) discusses “Adam Smith’s Invisible Hand and Charles Darwin’s Natural Selection” (HERE):

[First SC quotes part of ‘the invisible hand’ reference - ‘with paragraph breaks supplied’ by SC]:

“As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it.

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.”

[I have already quoted the fuller reference in my previous post. SC asks:]

“Where does Darwin’s theory of evolution fit into this?

It has often been remarked that the theory of evolution, according to which life on earth evolves without the guidance of a designer, is remarkably similar to the way a free-enterprise economy develops, with each enterprise doing its best to prosper, yet without the “benefit” of a centralized planner.

Was Charles Darwin influenced by Adam Smith? He was certainly aware of Smith’s work. Darwin mentioned Smith in Descent of Man, and provided a footnote to Smith’s Theory of Moral Sentiments. See: The Descent of Man. But that was in connection with Darwin’s discussion of emotions. It was his only mention of Smith, and he never used the expression “invisible hand.” We wish he had, as it would have been a useful metaphor for the misleading appearance of intentional design in nature.
Although it’s easy to make too much of this, we observe that throughout Origin of Species, Darwin uses the expression “economy of nature.” Additionally he has passages that literally suggest economic behavior, such as this in Chapter 4 - Natural Selection:

We leave you with the following tentative conclusions: (1) Darwin was a late product of the Scottish Enlightenment; (2) Darwin was influenced by Adam Smith’s ideas, far more than is apparent from his one mention of Smith; and (3) The theory of evolution is remarkably compatible with free enterprise economics, especially regarding the ‘invisible hand’.”

Comment
When I read Charles Darwin’s, The Descent of Man, and selection in relation to sex’, [1871] 1981, Princeton University Press, New Jersey, in 2003 (I was researching the pre-history of bargaining at the time), I marked the paragraph referring to Adam Smith in Part 1, chapter III, p 81 and footnote 17, because it discusses, if briefly, Darwin’s assessment of Smith’s views on ‘sympathy’ from chapter 1 of Moral Sentiments.

In distinction to Smith, Darwin concludes that ‘sympathy’ became an instinct (much like Francis Hutcheson, Smith’s tutor, asserted). This certainly establishes that Charles Darwin had read Moral Sentiments, or at least chapter 1.

First, SC includes the following sentence quoted above: “It was his [Charles Darwin’s] only mention of Smith, and he never used the expression “invisible hand.”

This is a strange statement from SC given that hardly anybody mentioned the ‘invisible hand’ metaphor in the 19th century. It did not have the significance given to it from mid-20th-century onwards. From this, I conclude that SC has not himself read Wealth Of Nations with its sole reference to the metaphor and acts on the modern popular myth that the metaphor had far greater significance than was accorded to it both by Adam Smith and by his 18th- and 19th- century readers.

Secondly, SC notes that evolution suggests that “life on earth evolves without the guidance of a designer” and is “remarkably similar to the way a free-enterprise economy develops, with each enterprise doing its best to prosper, yet without the ‘benefit’ of a centralized planner”. I agree with both statements.

However, SC seems to reverse his statement, that both evolution and the economy develops without ‘benefit of a centralized planner’, with his ‘tentative conclusion’ that “the theory of evolution is remarkably compatible with free enterprise economics, especially regarding the ‘invisible hand’ ” Yet the existence of ‘an invisible hand’ would suggest that these statements are contradictory.

If life evolved without ‘intentional design’, as I believe it did, and economies evolve ‘led by an invisible hand’ (which I consider nonsense and contrary to Smith’s treatment of markets, in which he never mentions an invisible hand) then it cannot be “a useful metaphor for the misleading appearance of intentional design in nature”.

Why do we need an invisible hand metaphor to deny ‘intentional design’ when how markets evolve and operate are themselves a clear example of the denial of such an assertion to begin with?