Wednesday, May 21, 2008

Darwinism and the Free Market

Recently there was a great deal of debate on RD.net, surrounding Free Market Capitalism, and Socialism. There is an issue that remains unexplored (this will also be relevant to Creationism), that there is no need of a designer, to accept this for the process of evolution, but deny it to the process of economics is not only illogical, but foolish. Keep in mind that this is a comparison of the process.


Darwinism as I understand it is the process of natural selection acting on the various species of life that undergo various forms of genetic mutation, during their competition for resources. It is the non-random selection of randomly occurring mutations (to borrow from Richard Dawkins). This process requires no designer, and it evidences no designer, due to the fact that it is largely cold and uncaring, and that it has rendered species adapted to survive, yet physically imperfect.

The Free Market, as I understand it is paraphrased as an "invisible hand" which guides the market and the allocation of capital and resources. For instance the interplay of supply and demand in say..... the stapler market. Staplers are made by companies to fit a demand, and this supply will act in a natural way in its reactions to demand. Scarcity of staplers, increases the cost due to the demand remaining constant. The actors in the market act according to the invisible pressures that are exerted upon them. No government need regulate the number of companies providing a service. For instance a monopoly may arise, but the monopoly could never charge more for its product than another company could. For instance if there was only one company making staplers, and it cost them $1.00 to make each stapler, it could charge $10 for each stapler, but in such a case, another company could come along and charge $5.00 for each stapler and steal market share away from the other company. The original company could lower prices to $3.00 per stapler and take its market share back. This could continue until the company that best "adapts" itself to survive on the lowest margin (say $2.50 per stapler) will survive, while other companies can compete with a similar price, a superior product, or other competitive advantage.

The development of competitive advantage is forced upon a market by these invisible forces. In a market designed and manipulated by a large government, such advantages cannot be developed and people will not do their best work or come up with the greatest innovations. For instance company "A" selling staplers for $2.50 while making them for $1.00 could funnel money away from dividends to shareholders to do research on a new type of cheaper stapler production. While company "B" continues with business as usual. Company "A" then announces it can produce staplers for $0.25 per stapler, and will sell them for $1.75. Company "A" has maintained its $1.50 margin on each unit it produces, while cutting cost to the consumer by $0.75, and can then take more market share from other companies. This is the "leap" in evolution of the market, it is undesigned and produces the most efficient products, the most efficient means of cost control, and the best value to consumers and the market at large.

Thus I find it interesting that Creationists are often the staunchest defenders of the free market, because the free market embodies all the principles of Darwinian natural selection and evolution. It also follows that a Socialist economy more closely resembles the false notions contained in Creationism. It is no wonder that the same sort of thinking occurs in Socialist thought and Creationist thought. The dodging of questions, the straw manning, the claims of "That's not my Christianity/Socialism", these are ubiquitous to both "theories" because they are both equally intellectually bankrupt.

6 comments:

Jonathan said...

I honestly don't see how "pure" socialism could ever realistically be implemented, regardless of whether it was applied globally or not. People need incentives to work hard, to have the freedom to choose their career, and businesses need the chance to make profits. To even be tenable socialism would have to be diluted to such a point that it would be arguable as to whether it could even be called socialism any more.

Strangely, this logic does seem to escape the more fanatical socialists. The comparison with creationists and other strains of fundamentalists is apt.

Ibn al-Rawandi said...

Well the deal is... It is easier to introduce a few positive socialist models or programs into a Capitalist country, then it is to try to start, run, then rehab a socialist country. This is simply because by the time this happens, it is already totalitarian.

Thus Capitalism is the ideal starting point, and the market must remain relatively free.

Yaman said...

I don't know why everybody thinks capitalism "gives incentives to work hard." You don't think people worked hard in the tens of thousands of years before "capitalism" was invented?

Ibn al-Rawandi said...

Yaman,




That is kind of funny. People worked hard for survival (early on) then they worked hard to amass wealth, or animal skins, or whatever. The drive to succeed has always been present in human society. Socialism provides no motivation whatsoever, because the government has to provide for you, at the expense of the hard work of others.


Capitalism absolutely incentivizes hard work, because it allows you the fredom to succeed above and beyond your peers.

Anna Banana said...

Yaman,

Your illogic is showing. Just because capitalism gives incentive for innovation and hard work, that is not to say that it is the only provider of incentive for innovation and hard work. Of course, there were other incentives before capitalism, but that doesn't stop capitalism from providing incentive today.

Unknown said...

Every single one of the Fortune top 100 leading transnational corporations has benefited from state intervention on their behalf.

Of course it's the dominant political rhetoric of our time; stating that the poor and working-class must learn responsibility and be subjected to market discipline which is good for building character through tough love. The state should not intervene to help out these folks when they struggling or fail. Conversely, most wealthy individuals and corporations demand a "nanny state" to protect them from market discipline so that they can rant and rave about the marvels of the free market while getting properly subsidized by others through the state. Despite the rhetoric of laissez-faire and free competition, these same wealthy interests demand state aid to minimize competitive risk and help maximize profits. So, if anything goes wrong, the state, through tax dollars, intervenes to bail out the corporation or wealthy individual. In fact, according to Fortune magazine, every single one of the top 100 leading transnational corporations benefited from state intervention on their behalf. Twenty of that 100 were saved from total disaster, meaning collapse, by state bailout. In effect, then, free market ideology is founded on a class-based double-standard.