Economists Should Be More Like Biologists

by Don Boudreaux on November 3, 2015

in Competition, Complexity & Emergence, Economics, Myths and Fallacies, Seen and Unseen

When a biologist encounters in a living organism a physical or behavioral trait that is unusual or unfamiliar, and that does not contribute to survival in any way that is immediately obvious to the biologist, the biologist’s professional instinct is to think hard about that trait in order to identify its likely genetic benefit to its possessor.  That professional instinct is sound.  The biologist, upon encountering such a unfamiliar trait in an organism, does not leap to the conclusion that she has encountered an instance of “nature failure.”  The biologist, of course, recognizes that nature and natural selection are never perfect; sometimes living creatures are indeed saddled with traits that do indeed reduce their genes’ chances of survival.  But this possibility of “nature failure” is not the competent biologist’s first go-to explanation whenever she cannot quickly, and within the conclusions of current theory, grasp the reason why natural selection might have created in the organism this unusual or unfamiliar trait.

In other words, the biologist understands that competition is an immensely powerful and pervasive force that operates unceasingly in nature and in an often-nuanced manner on many margins and frequently in ways not yet detected by human observation or understood by human reason.  With this sound understanding in mind, the biologist only as a last resort – and, I’m sure, always reluctantly – concludes that an unfamiliar and as-yet-inexplicable trait is evidence of “nature failure.”

The biologist, in short, knows that even most of the physical and behavioral traits that she and her colleagues have yet to understand in a way that makes those traits’ survival properties clear are, in fact, traits that likely serve to promote the survival of the genes carried by the organisms that possess such traits.

Too many economists are the exact opposite of the typical biologist.  When one of these economists encounters in the market a practice or outcome that is unusual or unfamiliar to him and his fellow economists, and that does not raise net economic welfare in any way that is immediately obvious to the economist, that economist is too prone to leap immediately to the conclusion that he or she has identified an instance of “market failure.”

This economist, unlike the biologist, does not understand that competition in markets, like competition in nature, is an immensely powerful and pervasive force that operates unceasingly and in an often-nuanced manner on many margins and frequently in ways not yet detected by human observation or understood by human reason.  Lacking this wisdom about the reality of competition, the typical economist too quickly concludes that this unfamiliar industrial practice, that as-yet-unexplained labor-market feature, and those mysterious details of a retail or capital market are the products of markets failing to work as well as they ‘should’ work.  “Market failure” is proclaimed far too quickly and too often.  (And – for reasons too obvious to spell out – the cocky ‘intelligent designers’ in government, along with their many cheerleaders and wannabe assistants among the intellectual clerisy, lovingly embrace this conclusion.)

The typical economist is a far less astute student of economic and social reality than is the typical biologist of animal and plant reality.


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