If Only Beliefs Were As Efficient As Markets

 

The essence of capitalism is that our market innovations have gone through selection pressure and benefited consumers by cumulative step by step improvements. Co-operation and competition are the main driving mechanisms for this success. Due to competition, and the market punishing inefficiency, bad service and poor quality products, the present day tends to produce the highest quality of goods available rather than any time in the past. It's not true in every sense, of course, but generally speaking, a laptop, mobile phone, washing machine, car, movie player, data storage device, and so on should be better now than previous versions 10, 20 or 50 years ago (perhaps notwithstanding planned obsolesence). Our products and technology get better, as does our knowledge and understanding of the world around us. No one sane would deny that we’ve never been better off materially and that we’ve never had more knowledge than we do right now.

Now, to a great extent, a similar mechanism also ought to exist in the evolution of the competency of the views we hold. And clearly, in many places it does. But….here’s the big but – we’ve also never had so many people alive with so many incorrect and absurd viewpoints. Now, you may say that’s simply because we’ve never had so many people alive - which is true to some degree – but it’s not quite enough.

The kind of selection process I described for goods, services and knowledge doesn't seem to happen with the same rigour in beliefs and viewpoints. In other words, we don’t seem to have refined the quality of our beliefs and viewpoints as successfully as we have in other areas that reflect the gradual slopes of improvement – especially in socio-cultural areas like politics, economics, social commentary and religion.

It's probably because of the vicissitudes of the human mind, or the complex nature of the social environment, or the lack of competing selection pressures on those beliefs, or the subjection to chaotic non-linear feedback effects - or more likely a combination of the four - but the present day state of affairs for political, economic, social and religious discourse doesn't seem to produce the modern day equivalent of the efficiency improvements seen in the free market.

But I think it's also because the stakes are different. In the market, we are heavily penalised if we don’t provide what people want and need – we could lose our job, our business, and even fail to feed our family. Capitalism has quality control that keeps us at the top of our game, otherwise we go bust. But there isn’t the same intense selection pressure on our socio-cultural views. What seems lacking there is the right amount of accountability. In market economics, providers and sellers are accountable to consumers who will shop elsewhere if something better or more desirable comes along. Accountability is a powerful mechanism in society because it acts as a modifying tool in response to performance. 

We shouldn't be surprised it is so effective - we see it happening all the time. The principal mechanism of biological evolution is that natural selection acts on phenotypes to confer survival advantage. In science, experimental testing is accountable to results, which forms a body of evidence for a particular theory. Each of these systems is subject to selection pressure that confers overall improvements. In market economics, unwanted goods or services don't stay around long. In biological evolution, it's rare for an organism that is prohibitively not adapted to its current environment to survive. In science, it's extremely rare for something counterfactual to be classified as a theory after much experimental testing.

There is some accountability in politics when it comes to who is in power. A democratically elected group of MPs are accountable to their constituents, and can be voted out if they perform poorly or behave immorally. In politics it's been historically rare (although sadly not rare enough, and getting less rare by the decade) for a hopelessly incompetent or scandalously unethical politician to last more than a few terms in office. The trouble is, the average member of the electorate isn’t very demanding when it comes to the purveying of good ideas and sound political and economic judgements. In fact, the incompetence of the majority of voters is even weightier than the incompetence of the people they are voting into power, which militates against proper accountability or adequate selection pressure on the statements and ideas of politicians. If only beliefs were as efficient as markets.