Thursday, February 17, 2011

Charles Darwin As the Founder of Modern Economics?

Stephen J. Dubner, author and journalist who iniytes readers to Follow @freakonomics on Twitter, writes (17 February) in The New York Times Opinion pages (HERE)

Darwin as Economist?”

“One session at the recent AEA meetings was addressed by “popular economics,” with a panel including Robert Frank. who is writing a book arguing that Charles Darwin, more so than Adam Smith, is the true forefather of modern economics.
This made me think back to a chunk from the introduction of SuperFreakonomics that we ended up tossing during the editing process … but I thought it might be worth posting here nonetheless as a prelude to Frank’s book. So here’s our SuperFreakonomics outtake on Darwin-as-economist.

On May 24, 1859, Thomas Bell addressed the Linnean Society, which was among the world’s leading institutions for the study of natural history. Bell lamented that the previous year was not a noteworthy one; it had not, he said:
“been marked by any of the striking discoveries which at once revolutionize, so to speak, the department of science on which they bear” …

… even a scholar as learned as Thomas Bell failed to appreciate just how profound and revolutionary it was.
These days, Darwin is regularly proclaimed a genius, and understandably so, for he essentially solved a riddle – where do species, including man, come from? – that had puzzled great thinkers for centuries. .. So Darwin’s long-brewing discovery was hurriedly announced at a Linnean Society meeting (along with Wallace’s findings [in 1859], after which he rushed to explain his entire theory in a book called The Origin of Species. And the world was never the same.… Darwin was the man who painstakingly marshalled the empirical evidence that proved the theory. It was evident that he was not merely a man preaching what he hoped to be true; rather, he was a scientist explaining what the data said.

… Darwin identified the mechanism by which evolution occurred: natural selection. In his decades-long course of collecting data, Darwin came to understand that species changed in large part because they were forced to compete for resources with other species and other animals within their species. As habitats changed, so too did the allocation of resources – which allowed some species to survive, thrive, and evolve while others died out.

In this regard, “natural selection” is a great deal like “the economic approach.” If the latter describes how people get what they need when other people need the same thing, then the former describes how, say, a groundfinch gets when it needs when other groundfinches need the same thing. Therefore, the question of whether a particular species of groundfinch survives is in fact a lot like asking how and why a particular young woman becomes a prostitute instead of president

Follow the link and read Dubner’s full argument. Frankly, I do not find it convincing. While Darwin did not know of Smith’s work on the History of Jurisprudence, which Smith had burned in 1790, but students’ notes of these lectures were found in 1895 (published by Canaan in 1896, and by Oxford in 1978), it is remotely possible that Darwin saw other student‘s notes while in Edinburgh as a student.

However, such speculation is unproductive as evidence. What is productive is to read how Smith articulated the evolution of the Ages of Man, from Hunting through shepherding and farming to the 4th Age of commerce (which actually began millennia ago, with the appearance of relatively stable settlements - the remains of which are continually excavated from about 8,000 years ago in the area where we know agriculture first appeared).

Note the significance of this parenthesis: most people see Adam Smith as the ‘beginning’ of what they call ‘capitalism’, which is not the case. His evolutionary theory was paced at longer time-scale than is appreciated, but that it was an evolutionary theory, like nature selection – no pre-determined outcome or result in mind (hence the multiple variations, some that work out and some that do not - they either wither on their own failings or are pushed aside by nature’s events or other external human interventions. That is why development through the Ages is discontinuous, societies rise and fall, the centre of change shifts geographically and stagnates elsewhere.

Much of this comes through in Wealth Of Nations, Moral Sentiments, and the History of Astronomy, all available to Darwin.

Therefore, I must conclude that Stephen J. Dubner, and Robert Frank’s hypothesis that “Charles Darwin more so than Adam Smith, is the true forefather of modern economics” is unproven and I doubt on this evidence that it will be sustained, though, of course, I shall defer my final judgement until I read Frank’s forthcoming book.

[One further note is that Charles Darwin considered himself as a geologist – an evolutionary subject if ever there was one. Adam Smith, of course, was a colleague and close friend of James Hutton, the geologist who first realized just how old the world was in 1787. His works were available to Darwin too. (and of course, Adam Smith].


Blogger Jean Vladimir Térémetz said...


Consternament J V T

5:06 pm  
Blogger Gevin Shaw said...

Dubner and Levitt (and, it appears, Frank) are deeply entrenched in the invisible hand camp and this is just another route to the same end: how much greater the resistance to any interference in the Market must be if, not only does an invisible hand bring the greatest good, but also some sort of natural selection will adapt the Market perfectly to whatever conditions may arise.

The equating of markets or society with a state of nature ignores the very real and visible forces at work, such as the prices and their effects on individuals you recently mentioned, which I would expand to take into account the very willful and visible actions of both buyers and sellers both individually and as, for instance, corporations and unions.

12:03 am  
Blogger Gavin Kennedy said...

Thanks for your comment

Markets like all human phenomena sometimes work and as often do not across historical times. They are human creations and as such can accommodate many intrusive elements and behaviours, leading some attempts at them to founder.

Natural liberty was a philosophical ideal that while attractive (still is) has not managed to survive into general practice, as Smith points out in Wealth Of Nations in response to Physiocratic insistence of it being a pre-condition for opulence ('If Natural Liberty was a pre-conition, no where would opulence have been possible' - rough translation).

In short, 'markets' do not adapt 'perfectly' - some fail in some institutional circumstances, many become distorted, some are killed by legislation (socialism, communism), some by theology, racism, war, cronyism, piracy, and criminality and some by ignorance and warfare. Though markets can be resilient in many sorts of adverse circumstances and generally are better than the alternatives.

Smith's critique of mercantile distortions was accompanied by pragmatic measures for gradual and specific changes, not by a 'big bang', grand 'plan' from a 'man of system'.

Exchange is the driving behavioural force of markets, utilising visible prices - not invisible hands - and it is that propensity, common to all humans, that brought societies to the four Ages of Man.

9:21 am  

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