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Stock Ideas Investors Daily Edge The Bailout and the Fit… What Would Darwin Really Say?
Stock Ideas Investors Daily Edge The Bailout and the Fit… What Would Darwin Really Say? 
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| The Bailout and the Fit… What Would Darwin Really Say? |
| Thursday, 15 January 2009 | ||||||||
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Ah yes, the bailout. Here comes that financial-section theme song. The chorus goes, “Woe to survival of the fittest. The end is nigh when freedom to fail is cut short.” Today the sentiment was in an AP story, other days in the Wall Street Journal, Barrons, all over the Internet… Some writers may be correct in their complaints with the Obama economic plan. Maybe it won’t work. Paul Krugman thinks Barrack Obama’s plan is not bold enough. The free-to-be-me-without-government crowd thinks it’s too much. Something much more basic gets my dander up, though. Please, would some of the people who blather on about Darwin and survival of the fittest go read the man? Really. What they are saying in their ignorance is not helpful. There’s no excuse for talking about survival of the fittest as proof that we should not bail out banks, support infrastructure or aid consumers without understanding it. You’re a busy person, I know. I don’t expect you to read Darwin if you’re not interested. But I do expect people who pretend to quote Darwin’s ideas to do it correctly—after reading Darwin. “Survival of the fittest” wasn’t even Darwin’s term (Darwin spoke of natural selection and adaptation.) This is little to ask of the pundits who blather Social Darwinism as though there were actually proving a point. Both The Voyage of the Beagle and The Descent of Man are charmingly written. Easily within the grasp of any bright person, even those of us who are not scientists. Aww heck, if Darwin’s too scary, Stephen Jay Gould’s many popular books will explain it all quite nicely, with current advances thrown in. When it comes to evolution, “fittest” means “best fitting” to current conditions or “best suited.” It does not mean “strongest.” Man is a perfect example. Compared to elephants, cougars, eagles and polar bears, we are slow, weak, thin-skinned, earth-bound, unfanged and unclawed, and practically hairless against cold weather.
But we dominate the earth. We weaklings, alone among animals, fit more environments—almost any environment—because we make fire and weave cloth and skin hides to sew into clothing, forge iron, record recipes and learning for the next generation and practice other adaptive skills. Or to put the principle of fitness another way, “in the land of the blind, the one-eyed man is king.” Anywhere else, having only one eye is a misfortune. If you had measured an average American Indian against an average European in 1500, the Indian was far stronger, healthier, taller, better nourished and likely to live much longer. It is estimated that it took Europeans until the 19th century to reach the average lifespan that Eastern Woodland and Pacific Northwest Indians enjoyed before the Europeans came. Surely the Indians were “stronger.” But the Europeans withstood small pox better, and once the Europeans brought their disease to the Americas, 50-90% of the Indians in infected areas died after a single outbreak. No doubt if the Wall Street Journal and the Libertarian Party had existed back then, some writer would have opposed small pox inoculations on the grounds that they enabled the weak to survive. That’s the kind of argument going on today about survival of the fittest and the bailout plans--Don’t interrupt death at work, seems to be the basic idea. Lousy argument, isn’t it? The key error in this thinking is that animals, especially man, do not sit back and wait for death to fix things. Certainly not in nature. Animals purposely adapt to environments if they can, some better than others; and most animals also change and control their environments. The beaver would be an obvious example… or ants, wasps, birds, moles… Man, above all, has always diddled with nature and his given lot. Before we went to college and learned fancy words, mankind also knew that laissez-faire is not an evolutionary strategy. Laissez-faire is not how “survival of the fittest” works in action. We never say, “Well, if we just don’t build any shelters this winter, then the strongest will live and that will be dandy for our evolution.” Adaptation for survival is transient, too. So it’s wrong to expect that one answer will prove eternally right. Let’s take a truly Darwinian example. In rural sub-Saharan Africa, sickle-cell anemia saves lives… those who have the oddly-shaped red blood cells resist malaria better. The anemia is still weakening, but the disease is adaptive where there’s malaria. In the U.S., however, the same condition is maladaptive. Here, sickle cell anemia leads to higher mortality. The reason this matters is that financial writers lean on the “survival of the fittest” trope as they misinterpret it to justify what they believe. They convince people they have good ideas that grand theories have proved. Thus, they say, if we have no more nasty little rules the way I envision a perfect life, then some banks, corporations or homeowners will fail and our “gene pool” is scoured clean. Easy. Do nothing and win! (I might add that Hitler was a big fan of survival of the fittest—you can see why he liked the idea, can’t you?) Not only can an emergency kill off the normally strong, this notion that we should gleefully watch others go down flies in the face of human reality. Man is a community animal. Always has been. All over the globe. He conquered the earth by hunting and traveling in packs. You are a community animal if you have health insurance (doubly so if your employer pays for it). You are a community animal if you drive a car on the interstate and expect others to cooperate. You are definitely a community animal if you ever sent a box of food to a shelter, or wrote a check for a 9/11 relief fund. In fact, this human readiness to work together and help our weaker like-kind is very much why we are the most super-fit animal of all in survival terms. It’s probably even part of your moral code if you are a devout Christian, Jew, Muslim or informed humanist. All those belief systems demand that the strong must use their strength givingly. So—back to Barrack Obama and bailouts. When it comes to bailing out institutions, it may be right that some banks should be left to finish their failures. I’m inclined to agree with that up to the point where the failures take down the whole economy. I am not sure how massive unemployment helps us, however. It may also be useful for people who are on the brink of losing homes to lose them and house elsewhere. But if that’s so, let’s call the outcome “useful,” and be honest. Let’s not vilify the losers and resort to sneers of “survival of the fittest” so we can feel good about watching others lose their homes. And by the way… those banks that got us into this mess? They, my friend, were the strongest of the strong. We are cleaning up after the formerly strong and fit. Don’t ever lose sight of that. So why in heavens name should we expect that just raising another crop of strong and fit institutions will guarantee goodness and right results ever after? There’s a lot to think about as we plan how to right the economy again. But one thing we should not waste time on is the notion that pseudo-Darwin arguments are either well informed or likely to help. There are better tests and better questions. Will spending on infrastructure as President-elect Obama wants help the jobs situation? In the short run, almost certainly yes—in a limited way. Not many unemployed accountants or brokers will get jobs building roads. In the long run… Well, unless the short run improves, the long run won’t look very good, either, since long-run economic health depends on a revival in consumer spending and optimism. Don’t like infrastructure spending? Then what other approach do you think will work better? All ideas are welcome, and there may indeed be better answers. I’m willing to listen to your ideas—but not to cockamamie pseudo-Darwinism. Will the national debt get too bad if Obama gets his plan through Congress? If you think so, I think you are probably right to worry. I will tell you that this truly frightens me. I already thought our repeated budget deficits of the last several years were dangerous. My opposition to the Bush administration’s overspending was exactly that it did not leave sufficient room for emergencies like the one we are facing now. Even so, we already made the mistake of overspending when we didn’t need to. Now what? Do we skip doing what we need here, now, at home, because we already spent daddy’s money on a flashy war in a distant land? That doesn’t seem to answer, does it? The right goal of any bailout or economic plan is not some loony-bin “survival of the fittest”… The real goal is the same as human survival has always been--it is devising systems that make our group fitter to survive. [Ed. Note: For more companies that can protect and grow your wealth, check out Lynn Carpenter's Rising Tide Letter. She recommends companies that consistently deliver outstanding results. Click here for more info.] P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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