Weekly Briefing: Why the Left can't stand free markets
Plus our top pieces from the week
As the by-election in Makerfield drags on, it’s been as good a week as any other for political news. On Wednesday, Roger Partridge wrote for CapX about Labour candidate Andy Burnham’s recent essay blaming the rise of populism on inequality. Not only did this misunderstand inequality, but also the nature of populism.
Later in the week, John Penrose wrote his column on Burnham’s comments on the unfairness of Britain’s tax system. Burnham’s right – our tax code does need an overhaul – but he’s right for all the wrong reasons.
And now for something completely different. Speaking at London’s SXSW festival earlier this week, former First Lady Michelle Obama told young people to toughen up and accept the fact they might not enjoy their first job. I agree, and in my column I argued that by basing its employment rights legislation on the demands of teenagers, the Government has discouraged businesses from hiring them.
CapX also covered a number of other stories this week. Free speech campaigner Freddie Attenborough argued against the Government’s decision to ban US left-wing commentators Cenk Uyghur and Hasan Piker from the UK; Matthew Bowles wrote about Labour’s cowardly approach to planning reform; and Anne Strickland discussed the financial questions that need to be asked about the Government’s counter-terrorism programme, Prevent.
My favourite piece of the week was by Erik Lidström, who wrote about the evolutionary reasons behind the Left’s antipathy to free markets. You can read it in full below.
It is also with a heavy heart that I announce that this will be my final Weekly Briefing, as I am leaving CapX next week. It’s been a pleasure, and whatever you do, be sure to keep reading Westminster’s finest opinion site.
You’ll also find some of our other favourite pieces from the week.
Joseph Dinnage
Deputy Editor, CapX
Why the Left can’t stand free markets
Erik Lidström
At its heart, the reason is a fundamental mismatch between our hunter-gatherer brain and the market economy. Up until a relative blink of an eye, humans lived as hunter-gatherers for close to 2 million years, some 70,000–80,000 generations, successions of mothers and fathers, sons and daughters. For at least 150,000 years, our ancestors were exactly like us and lived in groups of 20–70, within tribes, whole countries, of about 500.
There was a strict division of labour, where men hunted, while women mainly gathered, looked after children and cooked. Big-game hunting and gathering not only provided different sources of food, but they were also subject to two different rules for sharing. Big-game hunting is hit and miss in the most literal sense. Big games are large, high-variability resources, and in all hunter-gatherer tribes, they are shared equally, according to strict rules. Woe betides the successful hunter who keeps more than his predetermined share. He faces ostracism or worse. Gathered food is not subject to such variability, and no one, except certain kin, has any right to what a woman gathers.
In countries of some 500 people, there existed two kinds of social coordination. First, the intuitive ones between people who know each other. Secondly, in smaller and larger groups, we can also deliberately organise ourselves, using bureaucratic rules. Both modes of organisation, and particularly the first one, constitute our human micro-cosmos.
We no longer live as hunter-gatherers, and our societies now consist of tens of millions in a world with over 8 billion inhabitants. Within a market economy, there is a third kind of coordination, based on three rules that David Hume pointed out: secure property rights, that we may freely buy and sell products and services and that contracts are respected. With these three rules in place, we may interact with people whom we have never met, or even know exist, on the other side of the planet.
These three rules hold sway in our macro-cosmos and create what Adam Smith called a Great Society. Friedrich Hayek gave the self-organisation of the market and beyond the name the extended order.
The market is an example of a Complex Adaptive System (CAS), a complex system that can learn and adapt. Other examples of CASs are flocks of birds, schools of fish and anthills. There are no ant CEOs, ant managers or ant accountants. Nor is there an ant ‘hive mind’. There are just ants, walking about doing ‘ant things’, and the result is the ant hill.
This is where the hunter-gatherer brain and the workings of a free society collide. First, the Great Society ‘does not compute’ to the hunter-gatherer brain. Second, we have this innate rule that external high-variability resources should be shared equally. For such resources, as for big-game hunting, there is no causal link that can be identified between effort and reward. You may work 80 hours per week for years to start a business and fail, or you may work equally hard and have a runaway success. Or you may not work that hard, but even so, ‘strike oil’ and make it big, because you had some idea or noticed some opportunity. No one can determine ‘the merit’ of anyone in the Great Society.
Through cultural learning, we may learn and accept the appropriate behaviour in the market, and the way the economic game is played and acknowledge that the outcomes are based on a combination of skill and luck. Experience, as well as insight from authors such as Adam Smith, will also tell us that if we leave this chaotic thing, which is the market economy, to its own devices, incredible prosperity will be generated for society as a whole, but without anyone being able to predict individual outcomes. We may, therefore, mainly through culture, move away from our innate hunter-gatherer gut feelings towards that bourgeois culture that created our flourishing societies.
Others, such as students, journalists, politicians and academics, who are not participants in the market economy and who, as a result, lack the appropriate culture and insights, will instead obsess about Gini coefficients, high salaries, bonuses, windfall profits and the like, just like a group of hunter-gatherers obsesses about the equal sharing of a newly felled gnu.
And if you want more…
– Why Thatcher still matters today (Robert Colvile)
– Britain needs to build better (John Myers)
– The trillion-dollar opportunity in outer space (Rainer Zitelmann)
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