Is Capitalism a Game of the Survival of the Fittest?
It is quite common to be in a discussion about economics and proposing a capitalist solution when someone pipes-in “that’s just survival of the fittest.” What they are talking about is “Social Darwinism” and the image they mean to conjure up is that capitalism is like a bunch of gladiators fighting it out to the death until there is just one winner. Unfortunately, this tends to trip many of us because we often say that capitalism is about competition and that competition is what makes America great.
Epigenetics? Ooh, esoteric.
You know, you folks often make me feel like I'm back in college. A dictionary in one hand, a encyclopedia in another and an atlas in another. And it's been a very, very long time since I was in college.
What I was inspired to say by putting what I thought was a humorous twist on it is that I am learning as I interact with the Gulch. I should be more serious in my responses. You opened up new vistas of thought for me and pathways that I hadn't considered before. The fascinating thing about the Gulch is that, instead of wasting time and energy pointing out the screwed up premises of those I communicate (argue?) with, I can either put forth what I have learned and learn from others instead.
"When the great English scientist William Thomson (Lord Kelvin), was asked why nobody else had invented incandescent lighting, he replied tersely: 'The only answer I can think of is that no one else is named Edison'."
Some one else may or may not have invented it or they may have found a way to domesticate and farm producers of spermaceti.
down the page a bit a quote from Edison "Observation based reality rather than faith in the supernatural or slavish obedience to emotional desires is the method by which men learn."
'Edison learned from Newton and Faraday but never forgot they might be mired in preconceived dogma and associated errors. he proved all things to himself through his own methods of objective examination and among other things learned the received opinion of electrical opinion that light required high voltage and low resistance the opposite was true low voltage and high resistance. He then invented the incandescent light, a power plant, and a full lighting system.' that part paraphrased for brevity.
Those semantics will getcha every time.
There is but one logical alternative... Support Survival Of The Weakest....
Toss THAT into the conversation and see what happens... I've done that in 'discussions' where people decry the effects of The Profit Motive...
"So, you'd prefer the Loss Motive"? Try to float some stock based on THAT goal... :)
Your piece about capitalism as a game of survival of the fittest reminded me of many past occasions when I spent time contemplating the nature of capitalism and the related concepts, many of which you invoked. I am responding (too?) late because of some travelling I had to do.
Here, I would like, in a way of response, to take the same and similar ideas and express them differently. I mean it when I say differently. I am not saying “better”, nor do I mean in conflict with what you said. Just a different perspective of a different individual with a different life experience. But also with the same need for consistency, the same obligations of truthfulness and concordance with reality.
(As you can tell, this is going to be relatively long, coming from a meticulous nitpicker using a foreign language. Sorry about that. I hope that you are a patient man. If not, the “delete” key is very helpful.)
It seems to me indisputable that life is a phenomenon governed by the laws of nature, e.g. principles of thermodynamics, and the nature of matter. As you say, it consumes energy by multiplication and reproduction, which implies a drive for survival. As a consequence of the non-equilibrium nature of the life processes, life of an individual living thing is finite. Nothing living is immortal. The drive involved is directional and the processes irreversible.
Seeking sources of energy directly leads to competition, among the individuals and species, for food and space (territory). As Darwin so clearly demonstrated, the competition leads to improvements and evolution. Continuous improvement in chances of survival and reproduction leads to better individuals and better species.
I know nothing about the game theory. Many years ago I read something about it that turned off and I never gave it another chance. The evolutionary competition that I mentioned leads directly to cooperation, sort of superimposed on the competition that is life. My limited experience is in playing soccer, basketball and lots of chess. The cooperation is called teamwork. But, please note that on every team there is also a competition among the members of the same team.
We humans, as a species of living organisms are, as a matter of course, subject to all those things I mentioned above, including the same basic driving forces. Being rational, we are able to understand reality better and deeper than any other living things. But, even among humans, there are vast differences in those abilities as well as in physical abilities.
Humans develop methods of producing useful things (technologies) and thus create value. Value being determined by how much other humans are willing to part with value of their own creation, to obtain the valuable useful things made by any given technology under consideration. There is also a sort of life cycle in technologies. The basic innovation creates it. Its early success in the markets generates revenue to fund efforts in continuous improvement (I call it development engineering). Many innovative ideas and novel designs support that continuous improvement. Gradually, the cost of each improvement grows and the overall improvements become less significant. The technology matures. Then somebody else comes up with a bright new invention and the old technology is replaced by a new one. The effectiveness of that continuous improvement is measured by efficiency of the development processes: how much increase in product value versus the cost of implementing the improvement. Please note that this is the same as the efficiency of a bird trying to find enough food. Flying all day for one grain leads to sudden death.
Of course nobody would want 500 firms building model Ts. But I submit that no one would want 500 monopolies either. The competition on efficiency and productivity is part of the essential nature of capitalism and, as I hope I made clear above, as well of the essential nature of life. In every kind of business there is someone that thinks that there is a better idea on how to run that particular kind of business. The only way to really find out is try to do it. It is called entrepreneurial risk. Own money and private investors willing to take that risk. And the first real life lesson in marketing for the new entrepreneur. The competitors force each other to be more efficient and find continuous improvements: in technology, in management, in marketing and financing.
The only place I differ with you, I think, is on the goal of the economy. I think that the better goal for a capitalist economy is to simultaneously maximize total wealth and median wealth. You do not want a couple of multi-trillionaires and all the rest of us scraping to put together the down payment for the mortgage on the home.
I would like to point out that social arrangements based on life, liberty, private property and pursuit of happiness are in deep agreement with the nature of life and the nature of capitalism. Without freedom to accumulate value and then risk it on the owner’s idea of a successful enterprise, there cannot be capitalism. The fundamental flaw and deeply corrupting influence of our form of government at present is its ability to sell protection from competition to the willing buyers of that service. Lobbying is just a euphemism for bribery, in my opinion.
Finally, about Mr. Spencer’s defamation of capitalism. Darwin was far too smart and knowledgeable to make such a basic mistake. He never even remotely visualized the species or the individual living things as gladiators in mortal struggle to become the last survivor. Actually, I think that Mr. Spencer did not make any mistakes. He deliberately wanted to confuse and mislead his audience.
I hope that I demonstrated amply and convincingly that life and capitalism are deeply related and analogous phenomena. In my opinion, both are truthfully and fully described as phenomena where the rule of the demise of the unfit is always operational. If you break a leg, you cannot walk. If you poison your mind, you cannot think.
What do you think, Dale?
Unfortunately, this post got more play than what I think is a more fundamental post on the connection between evolution and economics, http://www.thesavvystreet.com/inventi... (https://www.galtsgulchonline.com/post.... Both of these posts are just a glimpse of the connections I make between economics, evolution, and entropy in my book Source of Economic Growth.
The main motivation for this post was to get people to understand that competition is not what makes America or capitalism great (or is the key to evolution). Of course competition is a poorly defined term, which is why I make it clear that I am talking about the goal of pure and perfect competition. I explain why perfect competition is evil at length in my book as well as my Atlas Summit 2015 talk.
You appear to be intermixing competition with invention. In science it is important to hold one variable constant while adjusting the other variable. This is why I showed that competition by itself had only a 13% improvement over a century in the 100 meter dash. I think this is fair statement of what competition without invention can accomplish – in fact it is probably an overstatement. Competition is not what makes capitalism great, inventions are what make capitalism great. Are inventions the result of competition? No, not in general. Inventions are made because the inventor wants to solve a problem, not because he want to out compete his neighbor. Rearden did not create his metal to out compete Associated Steel.
Neither capitalism nor evolution are driven by competition. Competition is a side effect in both cases. In evolution the driver is genetic changes and capitalism inventions are the driver. In fact, there is plenty of competition in a totalitarian state – competition for bread, for shoes, to not stand out, to get the choice political appointment, what there is not cooperation. When people say that capitalism is about competition we get bad economics, bad economic policy, and excuses to not protect our natural rights.
Monopoly is a loaded word. If what you mean by the 500 monopolies comment, is that we do not want 500 companies each producing high value products/services without anyone producing a nearly identical product/service then you are wrong. That is exactly what we want. The richer the country and the richer we are the more people are going to be producing unique high value products. If what you meant is that we do not want the government to put rules in place (inconsistent with natural rights) to bar competition, that is absolutely true, however it is not the most important issue for wealth creation or what makes capitalism great. A monopoly in economics can only be created by government interference in the market. A sole provider of a product is not a monopoly. If it were then we are all monopolists over are labor, over our property, etc. This is the sort of sloppy thinking that leads to nonsense. In fact, some economists who push this point of view have been honest enough to suggest that all property rights are monopolies, which shows this line of thinking is double speak.
BTW: As many people can attest on the gulch I am not known for being highly patient.
But we don't only have disruptive innovation, we also have continuous innovation formed by companies selling similar products inventing minor improvements to give them an advantage with the competition. This is what companies spend the bulk of their creative time doing. A car company's R&D department does not try to create airplanes or space vehicles, it improves cars -- adding rear view cameras, etc. Every year they innovate and improve -- cars.
Your image of one car company or one telephone company results in a black car/phone. The Model T was available in black, as was AT&T's phone -- although in later years at a significant monthly premium you could get a different color.
Once you have competing companies in the space trying to produce minor improvements that will make them more attractive to the consumer we have a rainbow of colors.
I like living in a world with rainbows.
However your point that disruptive technology almost never comes from big companies is quite valid. In the software industry I have what I call the "Pizza Principle". The team to design a new product should be the size that can sit around a Pizza and work. I'll allow an extra large pizza since computer geeks generally like pizza but the point is that small teams do the real innovations -- then big companies buy them.
Of course the software industry has a very low threshold for entry. At the minimum your capital investment is a single computer. One can't design a new rocket the same way.
Collectivism kills innovation which stifles wealth creation.
Monopolies kill innovation which stifles wealth creation.
Only competition stimulates innovation, but it requires that innovation be allowed freedom. Both monopoly and collectivism prevent this, from opposite directions. One can make the case that the less capitalistic we have become, the more the pace of innovation has slowed.
The less competition in any given field, the more likely changes are to be incremental/evolutionary rather than disruptive/revolutionary.
Neither a monopoly or collective wants revolutionary change, it disrupts the status quo they want to maintain.
I still think of 'Social Darwinism' as an oxymoron, or at least a badly misused term by social 'scientist'(also an oxymoron). The application of the term has always been as a criticism of Capitalism, even the free-market. And it's intent has always been to convince others of the evilness of the free-market and property rights, making use of the religious antipathy towards the theory and study of evolution. At the time the term was coined, religious belief was strongly opposed to evolution, and socialist were attempting to establish themselves and their work as credible 'science' on par with physical sciences.
I can easily see the comparison of inventions and evolution and I like that idea. I don't know that I've run into it anywhere else. I wonder if there might also be a similar argument made between the results of evolution (invention) in all of nature (that being a balance of life forms filling available niches (specialization)) and mankind's unique abilities to manipulate his environment with Capitalism being that overall balance with man's innovation (separate from invention) being that manipulation.
If you think of Otis's elevator safety latch and brake, the hoist in mining and hundreds of other applications had been utilized for centuries and so had latches and safety brakes on mill wheels and gearings, but it's application in safely conveying people was the driver of multi-story buildings. That was an innovation of existing ideas, that made safe use of lifting devices that increased the value of property and made the work necessary of man, less.
But invention, I think of as being similar to the change in the birds' beaks (noted by Darwin on Galapagos) accomplished by evolution that opens up a new resource. In the case of man, I think of wireless communication brought about by radio.
Just thoughts. I need to think more on it.
2) Several other people have made the connection, although I do not think they have taken it as far. For instance, Ray Kurzweil. has said this as well as some others.
Capitalism lifts all boats. Crony capitalism lifts some and sinks others.
even the indigent -- by increasing the size of the pie,
of course. . convincing others of this takes persistence,
IMHO. -- j
.
bread keeps rising regardless! -- j
.
Again, a well-written article. Nicely done.
Do you think that is a result of specialization, the gradual consolidation which tends to happen in mature industries, or some other factor like favoritism in legal treatment? Or a combination of all of the above?
One of the interesting things that falls out from this is that 3rd world countries with lower economic freedom scores can grow faster (initially) than 1st world countries with higher economic freedom scores, because all they need to do is import ( or copy) technologies from 1st world countries.
What creates the appearance of a "survival of the fittest" atmosphere in the market is crony capitalism, and government picking winners and losers. As Heinlein said (through Lazarus Long) "Of course the game is fixed, but you can't win if you don't play."
believe it was Ayn Rand who said "does not apply
to capitalism nor to dogs") implies attacking others
rather than competing with them. However I am
unfamiliar with the expression "rent seeking" as a synonym for "laziness".
In my experience, those who make the “survival of the fittest” statement have no understanding of either evolution or free market economics.
DB - you're making me insane.
We're doing more theme & variations than a Beethoven quartet.
That's why I shudder when economics is proclaimed as a science.
How can one hold life as their highest value while seeing all battles as fights to the death?
The 'newness' of our product was not that it invented a mousetrap, but that it invented a Better mousetrap. (No, the world did not beat a path to our door.) I have not observed any game-changing innovation in any of our competitors (they are now graphic too, but since we were the first, they can't take credit for that); many of them compete on the basis of having a good sales team to sell what is essentially 'the same thing everyone else has'.
Wm's remarks were not venomous, and he did not swear. This is a discussion.
Jan
Shipley is a perfect example of what i have been posting on conservatives and Austrians and libertarians. He is the product of Hume, Burke, Hayek and Mises. He is skeptical of reason and he really does not believe that anyone creates anything, a perfect follower of Hayek's cultural evolution. He is impervious to empirical evidence since like Mises he does not think economics is subject to empirical evidence.
He of course would deny this, however Obama denies he is trying to turn the US into a socialist state. He may be unaware of all the intellectual influences that shape his ideas. However, he is a true believer either way and he has absolutely no interest in objectivism and he is only here to disrupt and attack objectivism.
If Wm Shipley wrote AS the ending would be that Galt was a fraud, not a great inventor and philosopher, and Galt would be thrown in jail as a fraud. Wm is the very personification of Ellsworth Toohey.
Even in his above comments, Wm says only that 'the majority' of the patents are due to improvements to make a product more competitive; this leaves plenty of room (in his brain, my brain, and potentially your brain) for totally 'new stuff'. Cornelius Drebble is accorded the credit for invention of the first microscope. (I did not know that Drebble even existed...thought it was Leewenhook.) All microscopes since then have been 'improvements'. But WOW, what a difference our modern microscopes are from the 17th century variety. There is value in improvement; there is also value in total innovation. Win-win.
Were Wm to write an AS style book, the hero would be triumphant. I know this because I have read some of the things he has written: the heroes are smart (/brilliant), competent, and win out over their opponents in the end.
Jan
Based on your analysis of what is an improvement, why do you say that Drebble (Leewenhook) is the inventor of the microscope? Was he not just turning a telescope around? Was he not just using two lenses together, which had already been done?
I am sure about Wm's philosophical foundations - because it follows logically from his statements and Austrian Economics is wrong and dangerous - as dangerous as any socialist.
Insofar as philosophy is concerned, Wm has already responded...but I was going to answer, "I suspect that you are more certain that you know Wm's philosophy than Wm is." I guess that is what working with someone for 20 years or more will do.
Per mamaemma, I probably should term my philosophy 'individualistic' while I am in the Gulch. The people here have more of my attitudes and perspectives that folks outside the Gulch generally do, but I have not found anything a perfect fit.
Jan
I've read more about philosophy since I joined this site than I have before -- frequently in response to one of your references. Even Rand I only read the novels until recently. I have worked with Jan for over 20 years and know some other objectivists who I generally agree with.
Of course someone invents the first example of a kind of object. And they use other inventions and materials to do that. Once that's done, the vast majority of invention goes into creating an enhancing the object. Modern incandescent bulbs are far different from what Edison invented but are only improvements.
But hide away, I didn't realize this was your thread where you get to hide anyone who disagrees.
And I didn't say that inventions were not a combination of known elements. What I said was that the majority of patented inventions represented improvements to existing products in order to make them more competitive.
DB appears to be making the case that invention is only used for new products and not competition with existing ones. Reality is different.
agents.
For instance, where do you place a person that inherits a fortune, such as Ayn Rand´s view on the Starnsville Heirs as the worst case scenario?
Then you also have to take into account that if you´re born poor, you have to add the fact that the environment you´re in will have a tendency to exclude you from many opportunities; whereas if you´re born rich, alot of strings can be pulled and there is a much more favorable scenario, whether we consider contacts and powerful friends in this or not.
But, of course; this is just an opinion here; a point of view really. It is common to say that those that are well off will invest alot in their offspring´s education and earlier years; meanning that they shall have fundamental advantages and yet not all rich children understand or take advantage of this. There is what today we call "an emotional education" and well, that´s something that money can´t buy.
Anyway, I never really liked the term "social darwinism" to begin with; because I consider it to be a terrible metaphor that states that society is like a jungle. If that were so, we´re way off since human beings should be considered a pack, not lions and sheep.
I may confused here, but isn´t society supposed to be a conglomeration of different skills and trades in order to elevate the quality of life of it´s inhabitants, since there isn´t a single person that can be an expert in everything; nor is there enough time to do everything? And well, from there on comes the complex problem of economics; the domestic markets and the international ones, etc etc etc. It´s great to simplify of course, but this isn´t the Wild West,Manifest Destiny is only isn´t even apliable in the Space Race and well; we´re all different one way or another. Tolerance is key here; for if I can´t get along with my brother it´s not like I have a right to kill him or anything like that.
Sorry, this is just a point of view. I don´t mean to discredit capitalism, socialism, humanity or society here. I´m just rambling I guess...
(And I would note that I do not condemn that person for business failures which result in a loss of fortune. Most entrepreneurs fail several times before finally succeeding.)
Australian? I know they use different definitions down under. If you are a Gold Coaster go to Town Center area and find the Zarraffas's Coffee headquarters. One of the owners is a former yankwank turned honest Ozzie. As for me I'm an Ozzies worst nightmare even more than a kiwi. Half Yank and half Pommy
ncome tax has as it's purpose control of the wealth of the citizens with money collecting a secondary objective at best. I'll add VAT is not value added as it adds no value but rather subtracts value making goods or services cost more and is a tax on a series of embedded taxes from tree cutting or mineral mining etc. to a finished product in the house and paid for with value diminished paychecks which have been raided for income tax. Paying for something with value diminished earnings as an employee and value diminished by embedded, enhanced etc other taxes and value diminished by devaluation of the buying power to add it all together is all about control. The governments already taken huge bites before the cash register rings up ...oh yes one last bite called sales tax.
Basically you are working for approximately half your salary or less and getting little in return except more of the same.
At the end when an income tax form is sent in and it used to take a signature now it's just a goes without saying law you also walk away with not only less money but complete liability and a felony charge hanging over your head.
No one can say their taxes are correct when the Revenue Service Itself disagrees with itself and or refuses to explain how to do the taxes. Catch 22 you sign the form or not but send it in you are automatically a criminal.
That's the fascist part government control of the citizens by any and all means.
the result is get less spending power while prices are going up as each level in the production chain adds to their overhead.
Business taxes including VAT are not paid for by the corporation or small business but are added under Cost of Government even if it's just the cost of collection.
And that's the way it goes with a lot of shinola to fool people.
One more is with holding tax ...people commonly say they didn't pay taxes the government sent them money. they forgot about with holding which IF "refunded offers no interest another way of saying cost of the loan to the government including loss in buying power of the years time..I like to owe a little bit and pay them in devalued dollars far more than get a refund.
I also pay $100 a month for Medicare for which I have zero use and only got a flu shot if i paid $200 for travel expenses north of the border. Now the government of Mexico gives them at no charge including visitors and expats.
I don't give a hundred dollars a month it's taken and we were supposed to get for our military service lifetime medical care....So i survived 24 years in the infantry and pushing five years in combat areas only to find out i now have to pay for what I earned.
How does it work down there with Evita and Juanito gone? We refer to them as left wingers.
What we find often though, is those that are either crony connected or threatened take on the meme of "do what ever you have to in order to succeed"...Sound like Donald Trump? This meme or mindless set is less integrated and often harmful to the end user.
Those that complain and point fingers are the ones that create and perpetuate the problem.
I would argue that a pure capitalistic society with no regard for anyone else but the satisfaction of one's own desires crosses paths with Social Darwinism more than we want to suggest.
There is no reason for the capitalist to consider anyone else to have value equal or or above himself when there is no attribution of that value external to the capitalist. Others are only pawns to such a person.
Unless we agree on origins, we can discuss nothing else; foundations are key.
Defaulting to "existence exists" is a cop out and denial of what is all around you. You cannot reason to a tree...it is there, so you have to believe it is either there by purpose, or accident.
Existence does exist why this is true is not necessary for understanding logic.
Existence exists is a circular statement and really means nothing. It is no different than saying a tree is a tree. It communicates nothing; teaches nothing.
What your confused with is called "Crony Crapitalism" and is a progressive perversion.
One should listen when I say that it is 'governments'.., the worlds kakistocracy's that control big businesses...mostly through the board room, majority stock holding and always by someone connected to the kakistocracy.