Socialism, The Free Market, and Evolotionary Psychology

This is not merely a long essay on the evils of socialism. There are plenty of conflicts and contradictions to go around.

The current thinking is that humans developed in bands of 50-150, which were in turn part of language groups of a few thousand. There is also evidence that even larger groups came together for brief periods, perhaps at festivals. Whether this will be the model paleoanthropologists put forward fifty years from now is speculation, but something like this, plus a few twists and surprises, is likely to hold up.

Those smaller bands, if they are anything like the similar bands that survive to this day, share things more equally than we do. Not entirely equally, however. Most bands have customs which they adhere to quite strictly about who deserves what from the hunt or the gathering. Members who attempt to short-circuit those customs and get an "unfair" amount are subject to group sanctions.

There is no evidence either way about whether the larger groups also shared in some way. They certainly traded, and so had some idea of comparative value; as bands also skirmished with each other, some sense of who is entitled to what, but what rules, must also have been in play. But they may have been generous with other related bands in time of need as well.

Thus we can see the beginning of either socialism or the free market in their behavior, depending on our own cast of mind. Research into ideas of fairness, social pressure, altruistic punishment, and decision-making reveal that some fairly primitive ideas still operate even in our exalted, civilised selves. We react very badly to people we perceive as cheating, for example, far in excess of what our actual losses would dictate. We are very attentive to signs that someone may be getting more than their fair share, and are prone to leap to the conclusion that they must be cheating somehow. In artificial games which the subjects are told are based entirely on random rewards, people quickly resent those who win often. We know this is irrational but seem unable to help ourselves. The feeling of irritation rises in us unbidden, however well we may subsequently talk ourselves down.

The main objection to socialism is that it "doesn't work." There are those who object on more theoretical grounds, that there is a fundamental unfairness to compulsory sharing, but seen from an evolutionary perspective, it's much the same thing. Central planning requires time and effort - it uses the society's resources. This gets increasingly difficult as things develop, requiring more and more of the society's resources, and calling out growing forces of enforcement.

Let me back up over that point just a bit. The central planning ideas of socialism look inviting at first because we see the low-hanging fruit. A little quick management, a little efficient planning, and everything's fixed. Society needs widgets, here's a widget factory, here are people who need jobs, voila! This is not merely an illusion. Legislation that is essentially redistributive looks attractive and gets passed because it looks like it should work. And at first, it often does. Not enough bakers? Subsidise bakers, or baking schools. Too many people without jobs? Well, there's always things that need to be done around the place, pay people to do those things. Because these things work at first, we don't see the law of diminishing returns at play. So we pass the next legislation as well.

Because of diminishing returns, more resources have to be diverted into planning and enforcement. For that, you can either go the bureaucratic route or the tyrannical route, or both.

The free market runs up against evolutionary psychology as well. We are naturally suspicious of those who "have too much." In a band of 50-150 people, one person having six or ten times the resources of another could only happen by some bullying, chicanery, or incredible luck. Everyone might willingly chip in a few extra berries and beef jerky for Ol' Fred if he really does make a superior spear point, but because someone else makes a serviceable spear point, Fred can't demand an inordinate amount of the tribe's resources. As trade develops, economies of scale might mean that Fred's Custom Spear Points brings goods into the tribe, and few would resent Fred getting some extras.

But when Fred's goods become the hot item up and down the coast, and he starts getting not only extra berries but extra wives, gold arm bands, and the best place at festivals, admiration begins to turn to resentment.

I am describing these in a context from our prehistory, but this is precisely what we see today. Listen carefully to those around you. They resent pharmaceutical companies because the "cost" of making that pill is only $2 - how dare they charge $200? Those money movers don't produce anything we can see - what right have they got to be so rich? Athletes are "just playing a game." Developers are building stores we don't really need. CEO's are making millions. Union guys are making lots per hour and don't work as hard as we do. When we can't observe what it is they do for their money directly and understand fully why they get it, we resent them. It's left over from our suspicion of fellow tribesmen who get too rich. We automatically conclude that they must be doing something shady.

The free market, then, also does not sustain naturally. Everyone can see at a local level how it's a good idea, but as it becomes more abstract and removed, our spirits rise against it. It doesn't feel fair, so we go looking for ways to take the rich down a few pegs. No matter how many times someone runs the numbers, pointing out that the average salary of an African-American is higher than the average Swede, or that unemployment is generally lower if we endure the fluctuations, something deep within us thinks we could jiggle the system and make it run fairer.

Irving Kristol's essay The Capitalist Future, now almost 20 years old, touches on the energy it takes to keep convincing people of the superior prosperity of the free market system. It is quite excellent. But it misses the point that the free market, once it reaches a certain size, also goes against our natural inclinations. Capitalism also requires some investment of society's energy into the circular pursuit of proving that it works. Conservatives rail against this, believing that people should be logical and run the numbers and not have to be told over and over how free exchange benefits both parties, but I think it is inevitable. However logical it may be, it goes against some of our more primitive impulses.

The amusing irony of this is that socialists believe that the market plays on our more primitive, barbaric, selfish, and uncooperative selves, while their system requires an elevation of spirit and morality. The opposite seems to be true. Resisting the urge to step in and start making everyone do what you think they should takes more sophistication and self-control. The desire to make people be good turns out to be the middle-school fantasy, while the supposed tooth-and-claw market requires education, trust, and comity.

The link to Kristol's essay was not just a footnote, BTW. You'll like the whole thing.