… is from page 74 of the late Daniel Dennett’s magnificent 1995 volume, Darwin’s Dangerous Idea:
Time and again, biologists baffled by some apparently futile or maladroit bit of bad design in nature have eventually come to see that they have underestimated the ingenuity, the sheer brilliance, the depth of insight to be discovered in one of Mother Nature’s creations. Francis Crick has mischievously baptized this trend in the name of his colleague Leslie Orgel, speaking of what he calls “Orgel’s Second Rule: Evolution is cleverer than you are.”
DBx: Yes – and this lesson about the evolution of natural processes applies with no less force to the evolution of market processes. The only real difference is that biologists by and large are more genuinely scientific than economists.
Too many mainstream economists who are baffled by some apparently futile or maladroit bit of bad design in the market economy leap to the conclusion that the market economy is “failing” and, therefore, the government must intervene to force observed features of the market economy to appear to conform more closely to textbook models. The attitude is this: “If I – a professional economist or think-tank head – don’t understand what I observe, then what I observe must be causing harm. I will help to make the real world look more like the theoretical model that is so pretty in my imagination!”
These economists reject the understanding that drove and drives the work of, among others, Carl Menger, Ludwig von Mises, Joseph Schumpeter, F.A. Hayek, Ronald Coase, Armen Alchian, Donald Dewey, Harold Demsetz, Israel Kirzner, Thomas Sowell, Dominick Armentano, Deirdre McCloskey, and Robert Higgs – the understanding that the market is a never-ending process of trial and error that discovers extraordinarily creative ways to satisfy human wants. Unlike biologists who appreciate the unfathomable complexity of the phenomena they study, typical mainstream economists mistake the necessary simplifications of their models as being full-enough descriptions of economic reality – and when not fully enough descriptive, then prescriptive of what government should do.
…..
I repeat here an example that I perhaps turn to too often: an ‘ordinary’ American supermarket. Walk into your neighborhood Kroger or Safeway or Walmart or Whole Foods. Pick any aisle at random – say, the aisle with laundry detergent. Who dealt with the logistics to ensure that jugs of Tide detergent wound up undamaged on the shelf? What process is at work that results in that shelf almost always being filled with detergent that you are free to purchase or not to purchase? Who designed the barcode and the software that lets you scan a jug of that detergent at the self-checkout lane? Now ask the same questions about the dishwasher detergent and paper towels. Move on to other aisles and ask about toothpaste, aspirin, peanut butter, corn flakes, milk, yogurt, orange juice, crushed red pepper, cumin, fresh broccoli, fresh corn, canned corned, olives, ground beef, lamb chops, gluten-free pasta, coffee. The list is very long.
And who pays that store’s electricity bill? Who supplies that store’s liability insurance? Who put up the capital that makes that supermarket possible?
Ask the following question to anyone who fancies that he or she knows enough to recommend how government coercion should be used to ‘redesign’ or change existing market processes and outcomes: “Can you recount in sufficient detail all the information and knowledge that is used today to ensure that that Kroger or Walmart operates as a supermarket in a manner that all Americans now take for granted?” If they cannot – and they certainly cannot – offer a respectable answer, ask this follow-up question: “Then by what miracle will you have enough knowledge to re-engineer the larger economy in a way that improves overall human well-being?”
You’ll get an answer, for such interventionists are intoxicated with their own superiority and imagined intellectual genius. But if you pay close-enough attention to that answer, you’ll notice that it is little more than a stew of abstractions and aspirations. Nothing in the answer will give you confidence that that person should be trusted to intervene coercively into market processes. The market is cleverer than that person.
