Wednesday, September 07, 2005

Complexity and spontaneous order in biology and markets: John Paulos has written a nice essay drawing analogies between the spontaneous order of biological systems and economic marketplaces, neither of which requires a central designer/planner. From the article:
Go into almost any drug store and you can find your favorite candy bar. Every supermarket has your brand of spaghetti sauce, or the store down the block does. Your size and style of jeans are in every neighborhood.

And what's true at the personal level is true at the industrial level. Somehow there are enough ball bearings and computer chips in just the right places in factories all over the country.

The natural question... is who designed this marvel of complexity? Which commissar decreed the number of packets of dental floss for each retail outlet?

The answer, of course, is that no economic god designed this system. It emerged and grew by itself, a stunningly obvious example of spontaneously evolving order. No one argues that all the components of the candy bar distribution system must have been put into place at once, or else there would be no Snickers at the corner store...

What is more than a bit odd, however, is that some of the most ardent opponents of Darwinian evolution -- for example, many fundamentalist Christians -- are among the most ardent supporters of the free market. These people accept the natural complexity of the market without qualm, yet they insist that the natural complexity of biological phenomena requires a designer.

They would reject the idea that there is or should be central planning in the economy. They would rightly point out that simple economic exchanges that are beneficial to people become entrenched and then gradually modified as they become part of larger systems of exchange, while those that are not beneficial die out. They accept that Adam Smith's invisible hand brings about the spontaneous order of the modern economy. Yet, as noted, some of these same people refuse to believe that natural selection and "blind processes" can lead to similar biological order arising spontaneously...

These analogies prompt two final questions. What would you think of someone who studied economic entities and their interactions in a modern free market economy and insisted that they were, despite a perfectly reasonable and empirically supported account of their development, the consequence of some all-powerful, detail-obsessed economic law-giver? You might deem such a person a conspiracy theorist.

And what would you think of someone who studied biological processes and organisms and insisted that they were, despite a perfectly reasonable and empirically supported Darwinian account of their development, the consequence of some all-powerful, detail-obsessed biological law-giver?