Social Evolution: Capitalism Works Except When It Doesn't

This entry is recycled from myprevious evolution blog (March 2009) that I have now closed.

One of the hallmarks of the human species is altruism. There are three kinds of altruism: generosity toward one’s family; generosity toward others who might someday reciprocate; and generosity to poor and perhaps unknown strangers, which gives the altruist an enhanced social standing. All three forms of altruism are really enlightened self-interest rather than pure sacrifice.

As events in the past year have vividly shown, bankers and “financial services” executives seem to be outside of this universal human realm of altruism. (“Services,” in this sense, appear to have the same meaning as “servicing” a livestock animal.) The insurance giant AIG has received so much federal bailout money that it is now mostly owned by us, the taxpayers. In 2009, they announced their intention to give $165 million of the taxpayer money as executive bonuses, much of it to the very executives who bankrupted the company. They claimed that they have no choice in the matter, that they had already promised these bonuses before they received bailout money. The outpouring of rage from the American people was nearly unprecedented. USA Today had a picture on its front page of the AIG logo with a tomato spattered on it.

Some writers have applied the concepts of natural selection to the economy. Their view is “the survival of the fittest,” and their system is called capitalism. Strangely, some of the people most enthusiastic about survival of the fittest in the marketplace reject evolutionary science. There are several problems with doing this. One is that human individuals and societies have options open to them that other animal species do not. We have an intricate form of cultural evolution. We can decide to say no to our genes, and to do what we think is right even if it is not in our selfish individual interests. Richard Dawkins quoted the intentionally childless Steven Pinker as saying, “My selfish genes can go jump in the lake.” Another is that extreme capitalists have applied only part of evolutionary theory: they have applied “survival of the fittest” but totally omitted altruism. The result is true stupidity: for example, AIG seems to be totally clueless that being mindful of their civic duty could be worth billions of dollars of customer revenues to them. If they think they can make us their customers by hitting us atop the head with a club, they are following the 1950’s-B-movie version of evolution, not the scientific version.

Capitalism works except when it doesn’t. Republicans have said to just let companies do whatever the hell they want to. Senator Phil Gramm has been especially vigorous in removing federal oversight and underfunding the Securities and Exchange Commission. Then, when outrageous selfishness causes an economic collapse, these same capitalists come with lugubrious faces and outstretched palms asking for socialist handouts.