I was watching a lecture made by M. Shermer on ‘Evolutionary Economics’. Have you seen it?, what do you think?.
After watching this, I got a couple of comments.
Shermer talks about the ‘evolutionary economics’. Well, in this video, previsible from its title, Shermer talk about why it’s ok to be a libertarian ( a kind of Milton Friedman: socially liberal and economically conservative). Well, I’d say that it’s ok to be a libertarian, after all, it’s ok being anything except you want to fisically eliminate another persons.
But Shermer, imho, makes a couple of fallacies. He makes a paralelism between evolution and Smith’s ‘invisible hand’. I think it’s a intelectual swindle: while the evolution is a fact, the ‘insible hand’ is a theorical model, whose existence in the real world is, at least, doubtful.
The ‘invisble hand’ has a couple of premises:
1. There is perfect information: every buyer and every seller know the last transaction price
2. There is no a single buyer o seller who, by his or her own, could influence in the market
3. There is no diference in the quality of the products
4. Every buyer and every seller is rational (in the von Neuman meaning: a rational player is the player who, if he had knew the evolution in the future, he could have choosen a behaviour with no doubt, and in the sense that every player seeks to raise his profits)
5. Every product is sold
6. There is liberty: every buyer and every seller could enter or exit the market when he or she desires.
It seems to me that condition 2 is key: does Shermer really think that there is no buyers or seller with the power to change the market by their own? (I think in a lot of examples: to have a buyer like WalMart, or a seller like Exxon clearly violates this rule ). Also 6 is problematic: could you exit the food market? really?. So, I tend to think that the invisible hand idea is more a model to think in what could happen in this ideal conditions than a real phenomena.
I guess the ‘invisible hand’, even if it exists, miss the long term. Ok, in the long term we are all deads, as Keynes said, but I guess we could go further because we have an obligation with our descendants.
I think liberal capitalism is the best system of all that have been tried, especially if we finally avoid environment threats, but I don’t see means (material means) to leverage the living standard of the poor to a manhattan consumer’s life standard.
I understood what he claims about the ‘moral of reciprocal altruism’ and the fact that this feelings sometimes prevents us to colaborate even when is our better tactic. But I don’t think this moral feeling is the base of the need for the state involvement in economics. I think that because reallity is more complex than accounting and the stock holders, at the end, just care about the stock price in the current excersice we need someone who look into the long term.