Anti-Market Atavism Explained

When I lived in Germany in 2009, I often encountered situations that tested my knowledge of culture. After all, my culture was southern United States; I was immersed in the culture of southern Germany, without in any way understanding it.

I was in Munich, a very large city, and was late for an appointment. I came up to a busy intersection, with a red light, looked both ways, saw no cars were coming, and started to cross the street. I should add that to get to the intersection, I had to push my way through several dozen schoolchildren who were waiting for the light to turn green.

Having taken only a couple of steps, I heard some shrill shouting in German—"Kindermörder! Kindermörder!”—and then felt a pain in my elbow.  A little old lady was hitting me, pretty hard, with her umbrella, and accusing me of being a “child murderer.” Loudly.

Why would a little old lady physically attack an adult male in a public street? It wasn’t because her reason told her to do it. She was angry, because I was crossing a street in a dangerous way, directly in front of children who might later do the same thing and be killed. Her body was suffused with a cocktail of powerful “fight or flight” chemicals on seeing a violation of the public norms of safety, and she acted without thinking.

Now, I’m 6’1” and 240 pounds. Even spotting her an umbrella as a club, I probably could have taken her. But I too have an evolved set of responses to violations of norms, even when I’m the violator.

My face turned bright red; I hunched over and tried to make myself physically smaller and less threatening. I crept back to the curb where the children were watching, and tried to tell them I was wrong and that they shouldn’t cross against the light.

Good and Bad Rules

That all sounds like the “emotions as norm enforcers” function is actually useful, or what biologists call adaptive. Providing the public good of enforcement, or feeling bad about violating the rules, makes the rules work better and at lower cost. But that may not always be the case, if the rules themselves are bad. Worse, the rules may be the product of the moral intuitions that were evolved for an earlier time period. That’s when we may have to deal with such intuitions as atavisms.

For example, suppose you get cut off in traffic. Many of us, especially those of us afflicted with maleness, will act like damn fools, trying to “teach a lesson” to that “*%&^$” who disrespected us. That impulse to correct rudeness may have been adaptive 10,000 years ago, before the Neolithic revolution, when small clans needed cooperation to survive. If you saw someone act badly, you needed to confront them to make sure that the scarce food and other resources of the clan were not wasted on a non-cooperator.

But today, getting upset and perhaps even starting a fistfight or “road rage” incident with gunfire is dumb. It’s a holdover, an atavism, from a time when such behavior was adaptive. Most of the time, it doesn’t matter and we don’t notice it. But sometimes it does matter.

I have long wondered why so many people have such visceral, negative reactions to exchange activities that, to economists, seem either benign or positively beneficial. I’ve come to conclude that the answer is deceptively simple: whale hips.

The Evolution of Whales

Whales have hips. They don’t have legs, at least not anymore. But they still have identifiable hip structures at the point where the legs of the now long-lost legs would have connected. Back when the prehistoric mammals from which whales evolved were romping in the shallows, they had legs, because they had started out on land.

But when these whale ancestors took to the open ocean and dove deep, legs were a hindrance. Natural selection “directed” a smoother shape, with no rear legs to slow the whale-creature down. But the genetic code for legs still hitchhiked along on the modern whale alleles, turned off but latent. There was no particular advantage to selecting for the absence of hips, and a number of muscles were tethered there. So whales have hips.

Biologists call this an “atavism,” or (in some cases) a “reversion.” Reversions can be bizarre: Some snakes are born with deformed but recognizable legs. The genetic code for legs still hitchhikes in modern snake DNA, but it is normally turned off. Stress in the environment, or other causes that are poorly understood, can result in these genes being “expressed,” or turned on, in a given phenotype.  It’s not adaptive; the snake with legs dies or is eaten by predators, but it happens.

Charles Darwin was interested in reversions. In chapter 13 of his 1868 book Variation of Animals and Plants Under Domestication, Darwin noted that animals that appeared to have been bred into a clear type retained the genetic information of their progenitors.  Even two purebred creatures of the new species might produce offspring that had the atavistic form or features. As Darwin put it, “The tendency to reversion is often induced by a change of conditions.”

Anger as Argument

Well, whales have hips, and humans have moral intuitions about the value of certain actions in a variety of social settings. Of course, moral intuitions are nothing physical like bones, but they can in some ways be measured. Most human beings have a deep, visceral reaction to seeing a violation of the rules.

The particular rules they care about differ across societies, depending on culture. And things that would upset some individuals are a matter of indifference to others. Still, one is reminded of David Hume’s famous observation that “reason is, and should be, a slave to the passions.”

The evolutionary function of “the passions” is to provide the public good of norm enforcement. Note that since reason is “the slave” of the passions, this is not a rational or reasoned response. That neatly solves the problem that “rational” human beings — that is, homo economicus — would underprovide the enforcement of norms. But actual human beings are led by a chemical hand to do something they don’t intend: enforce norms if they are violated by someone else, or feel ashamed if the norm violation is done by the person herself.

Tribal Norms

What I mean is that moral norms that served small bands of humans well 10,000 years ago — share, cooperate, punish anyone who violates the rules — are no longer very good at helping people navigate commercial society.  Ask someone about price-gouging laws, or kidney sales, or generally talk about the role of price as an indispensable signal of scarcity. Most people will get upset.

It may seem that they get upset because they don’t have a very good counterargument: “I don’t know why that’s wrong, but it just is!” The truth is the reverse: the “getting upset” part is actually their counterargument! It’s a deep feeling they have, and they will work hard to make up reasons that seem to justify their Stone Age conception of clan life. It’s not a choice at all, it’s just the way the human mind works.

Ten thousand years is just a blink of an eye in evolutionary terms, given the long human reproductive cycle.

The Hayekian Answer

F.A. Hayek recognized this problem, and thought pretty hard about it. In fact, I had forgotten (until a listener at a talk last year reminded me) that Hayek had even used the biological concept — atavism — when he talked about it.

It should be realized, however, that the ideals of socialism (or of ‘social justice’) which … prove so attractive, do not really offer a new moral but merely appeal to instincts inherited from an earlier type of society. They are an atavism, a vain attempt to impose upon the Open Society the morals of the tribal society which, if it prevails, must not only destroy the Great Society but would also greatly threaten the survival of the large numbers to which some three hundred years of a market order have enabled mankind to grow. (Law, Legislation, and Liberty, vol. 3, p. 304; emphasis here and below added)

At present … an ever increasing part of the population of the Western World grow up as members of large organizations and thus as strangers to those rules of the market which have made the great open society possible. To them the market economy is largely incomprehensible; they have never practised the rules on which it rests, and its results seem to them irrational and immoral.

They often see in it merely an arbitrary structure maintained by some sinister power. In consequence, the long-submerged innate instincts have again surged to the top. Their demand for a just distribution in which organized power is to be used to allocate to each what he deserves, is thus strictly an atavism, based on primordial emotions. And it is these widely prevalent feelings to which prophets, moral philosophers and constructivists appeal by their plan for the deliberate creation of a new type of society. (Law, Legislation, and Liberty, vol. 3, p. 497)

Interestingly, this notion of the different relative rates of change of economic institutions and social institutions also has some strong reflections in Karl Marx. The idea is that economic relations and institutions of commercial society evolve based on their own logic, which is transaction costs and the calculus of profit and loss. There is no reason to expect that human understanding of these changes, or of the function of even the most important institutions, would be able to keep up.

Now, Hayek thought (in my mind, rightly) that commercial society and market institutions were good, where Marx disagreed, but both agreed that humans found that “the market economy is largely incomprehensible.”

So, the next time you find yourself disagreeing with someone about the use of market processes as a means of achieving a decentralized but highly effective order for society, feel free to just shake your head and say, “Whale hips!” At a minimum, the next five minutes will be more interesting.

 

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Michael Munger

Michael Munger is Professor of Economics at Duke University and Senior Fellow of the American Institute for Economic Research. His degrees are from Davidson College, Washingon University in St. Louis, and Washington University.