Keynesian "Intelligent Design"

Here's an excerpt from an paper that I've written for an academic conference on Spontaneous Order. I think it is particularly relevant in this age of bailouts:

"Hence, the “intelligent design” problem. We should find it ironic that so many intellectuals who scoff at advocates of ID as response to evolution find the central Darwinian insights so difficult to apply in economic matters. At the risk of getting ahead of ourselves, those who are right about evolution unwittingly borrow from the errors of Intelligent Design (ID). ID is the hypothesis that some Cosmic Tweaker is needed in the interstices where evolution-based explanations are purportedly incomplete—whether due to gaps in the fossil record, or to the nascence of genetics. A species of the “God of the Gaps” fallacy, ID gets a hard time from academics who point out that, upon further reflection, natural selection (and sexual selection) no more needs a Designer to fill gaps or set things in motion than evolution has an ideal end-point up-to-which the Designer will work, then call it a day. Crudely put, life on earth is what it is. It may be beautiful, mysterious, diverse, and plural, but it is not an artifact of any intelligence at all. Rather life on earth is the complex outcome of nature’s stuff plus nature’s regularities blending, meshing and transforming in a startling array that is unknowable by a single human mind.

Arguments made by interventionists, progressives and pump-priming politicians take on a number of parallels. “Market failures,” like explanatory gaps, should be fixed by government bureaucrats and regulators, they believe. But at least the Creationist’s Designer is omniscient. Interventionists forget that governments, too, are human organizations subject to systemic failure; never mind the personal failure, cognitive limitations and venality of those who comprise a bureaucracy. Indeed, the most serious conceit of the interventionist is that even the most intelligent, well-intentioned bureaucrat has the knowledge, wherewithal, and perspicacity to design an economy and anticipate all of the distortions and unintended consequences that, inevitably, will follow. Again, government is analogous to God – except, in the case of an economy, the Intelligent Designer is not omniscient. Even if a bureaucrat is responsible for regulating only some small aspect of an economy, he almost always suffers under the delusion that the industry he is responsible for designing in His image is something meant to be – or is capable of being – designed. And that is the problem. No central organizer can possibly reckon with the complex networks and incentive systems that cascade through the extended order on a continuous basis. The Government of the Gaps is as naïve to the Austrian economist as the ad hoc Intelligent Designer is to the enthusiast of Darwin."

Comments

[Andrew Lehman]

The largest problem with applying economic models or models of social change to evolutionary biological models is that Darwin's theory of natural selection is still the default choice. The theory of natural selection performs poorly when applied to society. You get Social Darwinism, also called free markets. The credit unwinding and economic crash we are experiencing has a lot to do with our having an economic model, free markets, that reflects an evolutionary theory, natural selection, that does not serve well as a model of evolution. See http://www.neoteny.org/?s=society.

[Max]

Hey Andrew,
I appreciate your comment. I disagree that free markets are Social Darwinist. Even Herbert Spencer made this categorical error, two-stepping between the 'is' of Darwinism and the 'ought' of Social Darwinism--i.e. the weakest "ought," somehow, to perish. Free markets are but voluntary exchanges of value -- whatever the value. Those values do include our values of benevolence and charity. My comment is more a structural/functional one--i.e. that government intervention is based on a bad machine metaphor. But, I do think there is a normative conversation to be had about individual rights, versus the purported right of elites to make large-scale economic interventions. In any case, this is a pragmatic point and social darwinism does not appear in this analogy I'm making.

[Steve Horwitz]

Two comments here:

1. Darwin borrowed the whole notion of competition and evolution FROM social scientists such as the Scottish Enlightenment thinkers (Hume, Smith, Ferguson et. al.). He was reading Stewart's biography of Smith on one of the Beagle's voyages. Evolutionary biology might more properly be called "Natural Smithism" than any social system being called "social darwinist." (And all of this overlooks the point that social interaction is Lamarckian not Darwinian).

2. Max: you might be interested in this blog post of mine from a couple of years back:

http://hnn.us/blogs/entries/19793.html

[Maxwell Borders]

Thanks, Steve: http://www.typepad.com/site/blogs/6a00e54edfd9558834010536419431970b/post/6a00e54edfd95588340105369f6664970c/edit?saved=1