Walt, you are absolutely right that profitability does not necessarily indicate fitness.
Regarding the necessity for punctuated equilibrium, one other factor enters into the equation. So long as you have an unchanging environment, normal biological analogies might make some sense. When the background environment shifts, an entirely different type of fitness is required. In Railroading Economics, I discussed the rapidly shifting environment for business in the United States. Fitness in one period did not guarantee fitness in the next. Matters are made more complicated because rapidly shifting management fads create the illusion of even more rapidly shifting environments, which throws the adaptation process off even more. In contrast, studies of biological evolution usually treat the environment as relatively constant. Walt Byars wrote:
One of the pretty common arguments against (planned) socialism that I see is argument by analogy with biological evolution. In the most popular version of the argument, firms under capitalism face selection pressures which result in a more "fit" economy. The obvious rejoinder to this is that a "fit" firm is one that earns the most profits, and socialists reject the idea that profitability is the same as being socially beneficial. Michael Perelman deals with this argument in a different fashion in "The Natural Instability of Markets," but I wonder how much his argument depends on the correctness of the Punctuated Equilibrium theory of evolution, which I understand is highly controversial among evolutionary biologists. Another argument I see simply posits that "decentralized systems" are more "Evolutionarily efficient." An example is this post from a forum I frequent "I would love to hear you explain how a centralized committee is more efficient than a decentralized network. What was more evolutionarily successful in the earth's biological history-- bees or brontosaurs? What's more efficient, peer-to-peer or downloading from a single source? What kills more people, a lethal virus or a gunman? Sufficiently efficient networks (speed of information, etc) are nearly always more efficient than centralized bodies. You may reject efficiency, but that's just another way of saying you don't believe in maximizing the greater good." Obviously there are lots of errors and ambiguities in this quote, but I think it gives the picture of this sort of argument (interestingly enough, this is incompatible with the first argument I mentioned because under capitalism large heirarchically planned companies are "selected" for). Are there any counterexamples of more centralized animal species being biologically successful or anyhting of the like? Are their any arguments by socialists as to the inappropriateness of such biological analogies? I have yet to hear the sort of argument I quoted be clearly and coherently stated, but it appears as if "evolutionary efficiency" is conflated with economic wellbeing at some point. Therefore, I would also be interested in any academic examples of this critique of socialism being made (hopefully they are clearer than the stuff I hear parrotted on forums).
-- Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901 www.michaelperelman.wordpress.com
