Nov. 25, 2012
To the editor:
Many of our instincts are wrong.
We have evolved under circumstances much different that the world we live in, and our instincts lead us astray in the search for the truth.
Michael Shermer, head of Skeptic Magazine, points out that in hunter/gatherer societies where individual wealth was non-existent, any discrepancy was considered to be from an unjust deed that wrongfully took from another. In tribal life, you can closely monitor and sanction those who don’t play fairly. Our instincts on cooperation and sharing evolved here.
You would see the elder or leader in the group taking charge to solve the problems of the group. Maybe this is part of why we seem to incessantly point toward the president for whatever good or bad happens in this country.
All the communist societies that popped up during the 20th century did so on lofty goals of fairness, but they all turned into totalitarian regimes because without the possibility of force (something that’s simple on the tribal level), people start to free ride on the contributions of others.
In society’s hatred of the rich, it usually tends to be focused on amorphous groups. We directly see the benefits Steve Jobs or Michael Jordan provide us, but we don’t with private equity managers making businesses efficient and hence profitable or bankers allocating capital.
Virtually nothing in economics is intuitive. When a natural disaster hits and prices go up in the affected area, you hear the media talk about “price gouging.” How many journalists have you ever heard provide the basic economic analysis of supply and demand to this simple and necessary phenomenon that sends required signals to producers and consumers?
During the past 40 years, the number of people living in extreme poverty, meaning less than a dollar per day, has fallen by 80 percent. Never in human history has an achievement like that gone down. It’s the result of property rights, rule of law, globalization and free enterprise. It wasn’t the UN, foreign aid or central planning. It was a free people pursuing a better life for themselves.
Ideas all learned, not innate to our instincts.