Wednesday, June 06, 2007

Evolution and the Free Market, Blameless:

In college, a standard line coming from the forces of political correctness is that "the system" in the US is "rigged" in favor of the rich, indeed, that we de facto have an economic caste system.

The kernel of truth to this sentiment is that rich parents tend to produce children who in turn likely will be rich; blue collar parents produce children likely to be blue collar, poor parents produce children likely to be poor. Though, there is proven class mobility.

It seems to me though, the evidence that there ever was any kind of "central planning" that purposefully "rigged" the system to be this way is sorely lacking. Rather, it's the free market that produces such results.

Social science has proven that the market tends to pay more for jobs that are more white collar -- that is jobs that require more education and cognition than physical labor oriented jobs.

This certainly doesn't seem fair. After all, cleaning toilets for a living is probably far less enjoyable than say being a law professor. In a "cosmically just" world, the salaries of those two jobs might be flipped.

But who is responsible for this outcome? Is it the Illuminati?...a group of elite planners "rigging the system" to be like this? No, it's the way the free market works. And like evolution, there is no single identifiable intelligence (or small group of intelligences) that we can hold responsible. For all we know, an intelligent Providence does guide both the evolutionary process and the free market. But such is not scientifically provable.

In terms of pure earthly matters, doctors and lawyers get paid more than ditch diggers for much the same reason why biodiversity is the way it is.

But wait? Just because the market, untrammeled, yields X results, can't human beings do something about it? Yes, just like with evolutionary biology. Scientific progress has taken us to the point where, for good or ill, human beings will be able to manipulate the passages of our genes, something our scientists enthusiastically do in the non-human world. Similarly, human beings, through government regulation can manipulate the results of free market (or, as in Communism, attempt to abolish it altogether).

I'll leave aside the whole changing of our human nature debate and just focus on human beings manipulating the free market. Such manipulations have been, by in large, malign. Or to put it in another way, most times when government interferes with the free market, no evidence shows that macroeconomic social welfare is raised. And much evidence shows social welfare is lowered.

Indeed, that's the larger point of Richard Epstein's Magnum Opus, Takings. Government regulation of the free market may be fine, so long as, in every instance of such, it can be shown that someone is made better off and no one worse off. Or, if a particular party is made worse off, the gains of the better off party must exceed the losses of the worse off.

And most government regulations simply cannot meet this social welfare test. In which case, in terms of sheer utility, the right thing to do is stick with the results the market yields. Indeed, we do so because the market is the only mechanism proven to create wealth, comfort and affluence for the greatest number of any given population.

If you have a problem with the results, like evolution, there is no proven singular or group of planning earthly intelligences that we can hold responsible. If you believe in the hereafter, take it up with the Providence whose Invisible Hand produces such results. Or, if you think your results, which you want government to implement, are "better" than the free market's, show, in an empirical, utilitarian sense, this to be the case.

1 comment:

Terence said...

Good information. It is likely to be true that there is a huge difference between the children grown up in poor & rich families. Even the poor people must think of creating wealth by proper planning & undo the differences in evolution.