Metaphors are our shortest stories. They are economical explanations that shape our understanding (itself a "mobile army of metaphors
"). But badly mixed metaphors from physics and biology animate economics, creating "confusion's masterpiece
." Another Shakespearean phrase, "invisible hand," is partially to blame.
Science's theories--its verifiable stories--also use metaphors. Some are loose analogies, others formal models. Orthodox economics abuses both kinds, misapplying oversimplified evolutionary ideas, like survival of the fittest, within an ill-fitting framework from physics. Its conceptual skeleton is: rational self-interest in competitive markets, led by an invisible hand, creates the best social equilibrium
But, as I've described, biological and economic self interest are different
. And what economists call rational can produce poor, sometimes even self-undermining, results
Adam Smith made "invisible hand" famous. He first used the phrase in his History of Astronomy: "nor was the invisible hand of Jupiter...employed
," to mean that nothing supernatural was needed to explain physical phenomena. Smith lectured on Shakespeare
, and likely knew the phrase from Macbeth (misdeeds are hidden by night's "bloody and invisible hand
But "invisible hand" emergent equilibria in economics, evolution, and physics are crucially different. Self-organization--parts spontaneously creating ordered wholes--seems "natural." But it's usually also dumb. Humans can do better.
Evolution's "invisible hand" story, typically sold as biology's great "unregulated" competitions (thereby ignoring widespread cooperation
) produces unintelligently designed results and regularly delivers foreseeable disaster. Narrowly self-interested competition in biology doesn't guarantee efficient outcomes. And it can be as dumb as trees in economics
. Social coordination can be less wasteful and more productive, if intelligently done.
General Equilibrium theory in economics was developed under the guidance of a physicist, Josiah Gibbs, who Einstein called "the greatest mind in American history
". Gibbs invented statistical mechanics to describe the behavior of large ensembles, like gases. Its metaphoric appeal for economics is obvious. However the "invisible hand" equilibria of physics emerge from parts interacting with uniform predictable consistency. But people aren't like gas particles or biological billiard balls
. We evolved behavioral flexibility and complex interdependent variable reactions.
Newton's science is, metaphorically and fundamentally different than Darwin's. Newton's systems have clockwork causality; they converge on mechanically calculable patterns. Physicists have invented powerful mathematical tools for predicting their development and specific results. But Darwin described an open, generative, and divergent process with less predictable effects. Its general shape is describable by the mathematical methods of physics, but its specific outcomes aren't so predictable (e.g. evolution, unlike anything in physics, needs game theory
Evolution gave us capacities for intelligence, foresight, and social coordination. With these we can avoid the dangers of dumb "invisible hand" self-organization. It fits not our nature to ignore them. Such sub-natural metaphors of human nature exclude what's best about us.Illustration
by Julia Suits
, The New Yorker
Cartoonist & author of The Extraordinary Catalog of Peculiar Inventions
.Previously in this series:It Is in Our Nature to Be Self-DeficientInheriting Second NaturesOur Ruly NatureIt Is in Our Nature to Need StoriesTools Are in Our NatureWe Fit Nature To Us: Evolutions two way streetJustice Is In Our NatureBehavioral Telescope Shows How Cooperation WorksSelfish Genes Also Must CooperateGame Theory And The Golden Punishment RuleRevolutionizing Economics by Evolutionizing it. Follow Scientific American on Twitter @SciAm and @SciamBlogs. Visit ScientificAmerican.com for the latest in science, health and technology news.
© 2013 ScientificAmerican.com. All rights reserved.