Thursday, May 06, 2010

On capitalism and the dynamic evolution of social behaviour.

Fair warning: this is a bit back-of-the-envelope. Okay, very back-of-the-envelope. I'm pretty much thinking out loud here. I'm jumping off a point raised by Catelli over at his place, and trying to work out why I have a rather different sort of pessimism than he does.

Catelli suggests that capitalism is based on greed and doomed to fail. I don't agree with either point. The former I don't accept because I think that capitalism is a much broader category than Catelli seems to think -- capitalism can be greed-driven, but can also be driven by self-interest (which is milder). But that's more of a taxonomical question: where do we draw the boundaries around the concept. Not a lot hinges on it, and different taxonomies may serve different purposes.

The latter I don't agree with because I think that capitalism of exactly the sort we're dealing with right now has recurred throughout the history of human civilization. And that's where the difference in pessimism comes: Catelli thinks that capitalism (in his sense) is doomed, while I think it's, at best, going to retreat for a while and then return yet again.

First things first: what sort of capitalism are we talking about here? Capitalism, as a class of economic systems, I take to be defined by two things. First, just about everything is privately owned. Some resources are held publically or in common, but these are exceptions, driven either by deliberate choice not to exercise private ownership (e.g., voluntary co-ops -- people who choose to gather and pool certain resources, often housing) or by lack of a mechanism to own the resource privately (e.g., the Moon -- hard to put a fence around it and enforce against those who cross it). Second, economic exchange is guided by self-interest. Producers and consumers of goods and services are motivated to engage in transactions in order to improve their own situation, not to improve the situation of others. Again, there may be spot exceptions to this -- just about all of us do, on various occasions, give to others out of genuinely altruistic motives -- but, broadly, production and consumption are for self-interest.

The second point I think is not definitive of capitalism as such, but definitive (in conjunction with a few other key features, particularly a pricing system) really of markets. We get a close affinity between capitalism and markets because capitalism really needs markets in order to work. Centrally-planned capitalism is a system with significant inherent tensions, as the central planners have to be motivated by interests other than those which motivate everyone else in the system. Socialism (say) by contrast doesn't need markets, but is consistent with them (indeed, I'd argue that socialism works best in conjunction with markets, but that's another post).

So, what's key is that capitalism is defined by a system of broad private ownership. And I think that is an inevitable consequence of certain basic processes which generate human social organization and behaviour.

The first thing to see here is that social organizations evolve, just like living things. "Evolution", read in the broadest sense, isn't necessarily a biological theory. (It becomes a biological theory in short order, but the basic notion I'm about to spell out isn't biological). "Evolution" is a way of talking about a dynamic interaction between at least two fundamental processes: a process of variation and a selectional process. The process of variation introduces differences into a population of things -- which may be living, but may not be -- and the selection process ensures that some of these things "succeed" more than others do, in the sense of replicating themselves. And these replicated things vary again, and the selection process applies again, and so on, up the spiral.

The application to living creatures is obvious. The variation process is, primarily, genetic drift: the slight changes in the genetic code that occur from generation to generation. The selection process is environmental fitness: some of these changes help organisms survive longer, have hardier offspring, have more offspring, etc. Successful variations are thus those which lead to greater reproductive success; and so on, up the spiral until we reach wherever we are today.

You can also apply this to basic physical particles, though. (Dawkins makes this point at the beginning of The Selfish Gene.) Physical particles will combine in various ways, depending on the concentrations of elements in their immediate environment. (It's hard to get diamonds forming in carbon-poor environments, for example.) There's your variation: the chance encounters of atoms with atoms will result in different molecules forming. These molecules are more and less stable, though. Some structures of atoms are very stable, unlikely to break apart into components or smaller molecules. (Diamonds, again, are a good example.) Others, not so much. The selectional process, then, is the combination of environmental factors surrounding the molecule: the presence and concentration of other molecules, radiation, etc. Successful variations are those which last long enough to replicate themselves -- induce copying of their structure in the atoms in the surrounding environment. And up the spiral.

And, you can apply this to social structures. There's lots of different ways of organizing people together -- monarchies, communes, democracies, and many sub-variants thereof. Which one any particular group of people comes up with seems a matter of historical chance. We in Canada have a system of parliamentary monarchy because Britain did. But, if France had won the battle for control of Canada, it's likely that we would've ended up copying their republican system. (There would be other differences too, of course.) There's no necessity which ensured British victory, English triumphalism notwithstanding. It just kinda happened, and, as a consequence, we wound up organizing ourselves in one way rather than another. So, there's your variation process: the result of the complex interactions of many other, simpler processes will lead to different forms of social organization.

The selectional process is due, I think, to sub-social parts. Education is obviously a big factor here. If you teach people that their system of government is sacred, then they will tend to support it; if you teach people that their system of government is corrupt and horrific, then they will tend to undermine it. If you teach people that the Prime Minister is directly elected then, sooner or later, they'll act to make it true. And so on. Education should be understood broadly here: it need not be formal, but can also follow the implicit processes by which we learn many things (such as how to speak). Family background will be another: children of higher economic class will likely tend to trust the police, having few dealings with them; while children of lower economic class will likely not, having more dealings with them. (The claim here is not that the police are bad, but that they are human, and being exposed to police more frequently increases the chances that one will see them being human: such as making a colossal, costly blunder or two.)

So, there's something evolutionary going on here with social systems and organizations of various stripes. The variation occurs because of accidental collisions of simpler processes, and the selection occurs as those social organizations collide in turn with those (and other) simpler processes. And we go up the spiral because, as is the case with living organisms and as is the case with physical particles, the interactions are iterative. So, they tend to reinforce themselves, and lead to greater and greater specialization.

Why does this lead, inevitably, to capitalism, though? Because, I think, the people who are best served by a capitalist system are selected for by a particular set of variation/selectional processes, which simultaneously selects people who will tend to be in positions of power (and thus able to sustain the capitalist system). That is, as social organizations are selected for, so certain patterns of individual behaviour can be selected for. The patterns of individual behaviour which favour capitalism -- a certain callousness, self-aggrandizement, ruthlessness, arrogance (and, positively, self-motivation, self-assurance, social ease), among other traits -- are developed and favoured by certain selectional pressures. Those patterns also favour getting into positions of power. And being in a position of power, one will tend to reinforce those behaviours that one finds useful -- the behaviours one has oneself. And so the cycle repeats and iterates: people with the right behaviours and traits enter positions of power and develop capitalist systems in order to replicate themselves, and in so doing create more people who will further develop the systems of power and economy in order to replicate themselves, and so on, up the spiral.

In order for capitalism to fail, it's important to see that the people capitalism favours are the ones who have to be persuaded to change it. For the tendency is for them to favour their own interests, and thus perpetuate the capitalist system. That will be difficult, of course. And, I think that it hasn't yet been done, historically. My read on the Middle Ages is that the traits which got someone into position as a noble or clergyman are pretty much the same traits (although less developed and rarefied -- the benefit of the centuries of selectional pressure) that we see bankers and brokers (and politicians) displaying today. The traits which got someone into position as a captain of industry in the 19th century are similarly the same. And examples can be repeated easily.

I should not that I haven't said that capitalism and the tendency towards capitalism is bad. I think they are, but that's a separate point. I also haven't said that any of this is inevitable -- just that there's a tendency in this direction, which has to be resisted. (Which, for what it's worth, I think would be very, very hard to do.) But I think it's important to see that social organizations, like species, are not static categories. They are instead observable time-slices of dynamic interactions between dynamic processes and, as such, have a certain flow. In order to affect the flow, we first have to know what it is and how the system tends to flow that way rather than another. That kind of analysis, coupled with a well-grounded set of evaluative principles determining the type of system we think is good, are the necessary basis for improving society.