Economics: A Universal Acid
We take for granted that Darwin’s theory of evolution explains every apparent design in the biosphere. Even when we encounter new species and fail to initially explain how its elegant features could have possibly come about, we are confident that the eventual explanation will fit neatly within a Darwinian paradigm. The New Atheists—though wrong about many things—were quite right to dismiss the ‘God of the Gaps’ argument as wholly unsatisfactory.
But why are we correct in asserting that Darwin’s theory explains all apparent design in the biosphere, both those we’ve encountered and those unknown? Why should we not be more modest and take the flora and fauna as they come? After all, maybe evolution can explain the adaptations we’ve come across so far, but Darwin will come up short eventually.
Such sheepishness would be a mistake. Darwin’s explanation of how design emerges without a designer is universal for all biological entities*. The theory makes no exceptions. It does not say “Darwinian theory applies to all organisms humanity has witnessed so far but no further,” nor “The ideas explain all apparent design that has emerged in the biosphere only in the last century.” The theory does not split reality into two classes of entities to explain—it is universal for the *entire* class of biological entities.
That the universality of Darwinian evolution is taken seriously is an instance of philosophical realism—we accept that the consequences of the theory actually explain the world, independently of our feelings, our intuitions, and our desires.
The same cannot be said about our best explanation of all of the regularities in the economy—namely Austrian economics.
We understand the conditions under which wealth grows. Through the hard work of Menger, Hayek, Mises, and others, we can explain how and why societal-scale spontaneous order in an economy emerges out of individuals acting purposefully and locally.
We know the role that private property and free trade play in capital accumulation, resource allocation, innovation, and human progress. And—crucially—we know why those mechanisms are superior to those of public property and taxation.
Our best ideas in economics explain all of this**. That these ideas are not widely known is indeed a travesty. But a lesser appreciated travesty is that among those who do understand these ideas, they fail to take them seriously—they fail to accept that private property and free trade are superior not just in the economizing of milk and shoes, but in the production of law, courts, and defense.
Plenty of political pundits, public intellectuals, and politicians do understand these ideas enough (even if not quite Austrian in their mind’s eye) to apply them to certain sectors of the economy—but rare is he who applies them to all goods and services.
Democratic presidential candidate Robert F. Kennedy Jr., for example, has said that “Freedom and free markets are a much better way to stop pollution…You show me a polluter, I’ll show you a fat cat using political clout to escape the discipline of the free market.” Yet he also wants to break up ‘too-big-to-fail’ banks, rather than, say, remove government intervention in the banking sector that causes such concentration in the first place.
Classical liberals are an even starker example, since they often possess a deep understanding of all the nooks and crannies of economics, and they take the ideas *almost* to their logical conclusion. Yet they reject the idea that private property and free trade could possibly provide the production, enforcement, and adjudication of law better than could public property and taxation, even in principle. But the line they draw is arbitrary, as much as declaring that Darwin’s theory stops with the fishes of the sea.
Finally, the ascendant so-called National Conservatives—while offering many valuable critiques of the Establishment Right—are outright rejecting the economic lessons of their Reaganite forebears (see the works of Newsweek’s Josh Hammer and Compact Magazine founder Sohrab Ahmari for examples). But economic principles constrain what’s possible, whether or not we want these constraints to be real. New Rightists mock those who continue to respect the lessons of dead economists as ‘naive’, but it is they, in fact, who are thinking with their hearts and not their minds.
Like Darwinian evolution, the principles of economics are universal for all scarce resources, all goods and services, all purposeful human action. Taking these principles seriously means that we don’t get to pick and choose where to draw the line.***
*The theory is even more general than that, but for our purposes the biosphere will suffice.
**The content of this explanation (how and why private property and free trade are superior mechanisms for error-correction and wealth-creation than public property and taxation) will be discussed in a future article.
***How to ‘get to’ a fully private property society from one with public property is an important question, but it has no bearing on the issue at hand: namely the universality of our deepest economic theory.
****I learned about the term ‘Universal Acid’ from Daniel Dennett’s book, Darwin’s Dangerous Idea.
I would like to read your explanation of universal economics. The way you are hinting at it makes it sound totally incoherent. Somalia has totally free markets and it is a hell scape. I don’t quite see how you are twisting the evolutionary metaphor on its head. Evolution is a descriptive theory. It describes the process by which every kind of life form than can exist. There is no sense in which something can evolve better or worse. Your theory of economics appears to be prescriptive. Why?