Behavioural Economics, Social Evolution

Obviously a topic in which I am very interested.  There are two processes at play; biological evolution and social evolution.  Look at the birth and rise of civilization, which do you think will win out in the long run?

Revolutionizing Economics by Evolutionizing It

By Jag Bhalla |

 

Economics will soon be revolutionized, by being evolutionized, again. This time with fewer unnaturally selective ideas. Scholars, like those working with the Evolution Institute, are adapting the assumptions, methods, and goals of economics to better fit empirically observed humans. Our survival foreseeably requires it.

 

Economics and evolution have always been deeply related. Natural selection crystallized for Darwin because of a Thomas Malthus essay on economics. More recently Richard Dawkins overstretched gene selfishness—committing the fallacy of composition—to claim that everything that evolves “should be selfish,” thereby spuriously lending the shield of science to a “naturally” selfish economics.

 

Conventional economics presumes we’re rational and greedy, and that markets make optimal equilibria. These assumptions are empirically testable. And they’re often false. Daniel Kahneman says it’s “self evident that people are neither fully rational nor completely selfish,” and complains that economists model a “different species.” Kahneman created behavioral economics by using empirical psychology and more biologically coherent assumptions. But it mostly keeps the same “rationally” self-interested methods and goals as un-behavioral economics.

 

Self-interest in evolution is different from self-interest in economics. Lessons about limits and dependency from one can improve the other.

 

The appetites and capacities of everything in biology are physiologically limited. Beyond some satiety level, more isn’t better—it’s often unhealthy and counterproductive. By contrast, self-interest in economics is considered limitless. Every extra dollar gained is better. But that’s a numerical illusion. An extra dollar’s benefit varies by circumstances (an idea used only peripherally, e.g. in diminishing returns). Unlimitedness is deeply unnatural. It ignores the foreseeable capacities of systems we depend on.

 

Evolutionary self-interest is mostly dumb. It leads predators to overhunt their prey, destroying themselves (and their dumb self-interest-maximizing genes). Somehow economic self-interest has become equally unintelligent. It’s often self-undermining, as in Prisoner’s Dilemma games, and in the global climate “tragedy of the commons.”

 

Natural selection is dumb. It has no foresight. But we evolved to have intelligent foresight—and should see the logic of this universal principle of dependency: Nature ultimately eliminates anything that damages what it depends on.

 

Dawkins distinguished replicators—genes—from the vehicles—bodies—they need to survive. Despite his desire to see genes (and all built by them) as ruthlessly selfish, each gene must also cooperate with every other gene its vehicle depends on. Same goes for social animals and the others they depend on. We’ve been team survivors for 10,000 generations, since group hunting out-produced going solo. And team survival required punishing excessive self-interest that threatened group stability.

 

We are likely the first species to know all this. And we ignore it at our peril. Limits, intelligent foresight, self-deficiency, interdependent coordination, and relational rationality are in our nature. They should all be in our economics. And in our rational self-interest, rightly understood. Economics needn’t be as dumb as trees or as self-harming as over-hunters.

 

Illustration by Julia Suits, The New Yorker Cartoonist & author of The Extraordinary Catalog of Peculiar Inventions.

Communicating Change: Disruptive Leadership From the Grassroots Up

We can't be creative if we refuse to be confused. Change always starts with confusion." 

- Margaret Wheatley

Don't fire until you see the whites of their eyes.

To keep the blade sharp, you have to periodically walk along it.

Sound familiar?

Risk means doing things that are unpredictable, taking chances, walking the wire without a net.  We want the benefits that come from risk (new innovations, new policy solutions, the first place medal) but not the consequences of potential failure.  When it comes to teams, bosses are increasingly becoming risk-adverse; new investments and new ideas aren't being supported as they could be.  They're relying on more interns and contracts that can be let go of quickly if they mess up and no or little money lost.

What about those who do take risks, push the envelope, push buttons?  There are lots of those, but if you look carefully they aren't so much about taking risks as they are confident in their ability to avoid or download risk to others.  Look at the Senate Scandals; even now the likes of Duffy and Brazeau remain defiant.  Look at any of the other political scandals across the country - nobody is saying they took a risk and it didn't pay off as they thought it would, they're denying risk at all, or placing the blame for failure on others.

 

Look at Lehman Brothers.  Look at the polling industry.  Hell, look at our democratic malaise.  These folk aren't being bold or innovative; they're puffing up their plumage and trying to deflate criticism.  It's a huge difference; more and more energy is being spent on image, not accomplishment.  More and more blame is being placed on the staffer, the consumer, the voter.  When people are blamed for inaccurate polling results instead of methodology, we have an emperor's cloak problem write large.

To fix this, leaders need to be willing to take risks - not the self-serving kind, but the policy risks that may not have precedent and will need to be tested through pilots, revisited and worked through various iterations to get them right.  Look at the work Guardly is doing with Neighbourhood Watch as an example of what this looks like in practice.

 

Leaders need to equally be empowering, too - not looking for their team to fail so they can replace them with better people, but encouraging them to experiment and supporting them through the trial-and-error learning process.  Failure should never be the end of the road - instead, it should be a stepping stone to perfection.  What have we learned?  What can we avoid in the future?  What new horizons have been uncovered as we break down the walls of convention? 

 

At the same time, teams and constituents need to be equally willing to work with leaders at all levels.  We've got a bad habit in Canada of voting people and Parties out, rather than voting anything in.  "I will undo stuff the last guy did that you don't like" isn't a "why" and it's not leadership, but it what we keep asking for.  Ask you and you shall receive, etc. 

 

"What I stand for" is vastly different from "what I stand against" but we seem to have mixed the two up in the same way that we forget that "talking to" (messaging) isn't the same process as "talking with" (communication). 

 

Of course, communication isn't easy, nor is it common.  Most Comms positions these days are focused on messaging rather than a back-and-forth flow involving understanding and compromise.

 

I'd argue that true communication is the biggest challenge we face, and face poorly given the impact it has on our lives.  Communication requires all those soft skills we have trouble quantifying; empathy, lateral thinking, iterative thinking, design thinking.  It demands us to put something on the table first, freely, without the certainty of receiving anything in return; it means having a bit of faith in what the person opposite can do, given the right supports along the way.

 

True communication is a scary concept, a step into the unknown, a leap of faith.

 

Which leads me to one last quote to tie this up in a bow:

 

Do one thing every day that scares you.