Trivers on biology in economics

In The Folly of Fools: The Logic of Deceit and Self-Deception in Human Life, Robert Trivers asks “Is economics a science?”  He answers:

The short answer is no. Economics acts like a science and quacks like one – it has developed an impressive mathematical apparatus and awards itself a Nobel Prize each year – but it is not yet a science. It fails to ground itself in underlying knowledge (in this case, biology).

Trivers notes the cost of this:

[T]he first piece of reality they should pay attention to – and this has been obvious for some thirty years now – is biology, in particular evolutionary theory. If only thirty years ago economists had built a theory of economic utility on a theory of biological self-interest – forget the beautiful math and pay attention to the relevant math – we might have been spared some of the extravagances of economic thought regarding, for example, built-in anti-deception mechanisms kicking in to protect us from the harmful effects of unrestrained economic egotism by those already at the top.

Take the use of utility in economics. Economists assume that economic agents maximise utility. But what is utility? Trivers makes the point that biology has a theory, which is over one hundred years old, of what utility is. The concepts of reproductive success, or more particularly, inclusive fitness provide the answer. Rankings between goods by an economic agent could be assessed against this fitness objective. Trivers notes this might not always give the answer, but it is pointless to miss the obvious linkages.

Trivers also has a short shot at the invisible hand metaphor. He notes that biology has hundreds of examples of where the pursuit of self-interest can have dramatic negative effects on group wellbeing. This reflects the recent arguments of Robert Frank.

Trivers saves some sharper criticisms for behavioural economics, where he makes a point I have made before on this blog:

One recent effort by economics to link up with allied disciplines is called behavioral economics, a link with psychology that is most welcome. But as usual, economists resolutely refuse to make the final link to evolutionary theory, even when going through the motions. That is, even those economists who propose evolutionary explanations of economic behavior often do so with unusual, counterlogical assumptions. For example, a common recent mistake (published in all the best journals) is to assume that our behavior evolved specifically to fit artificial economic games.

This point is fair, as many interpretations of experimental games ignore the environment in which the relevant traits may have evolved. For much of our evolutionary history, humans lived in small bands where one-shot games with anonymous strangers would have been rare. For example, we might interpret punishment in the ultimatum game to indicate that people having an innate sense of fairness for which they are willing to bear a cost. However, this could equally be interpreted as a strategy that would maximise personal fitness in a small band through the repeated encounters the two people are likely to have. It may not be a sense of fairness driving their action, but rather pure self-interest.

We should be careful, however, not to take this critique too far. As a reading of Daniel Kahneman’s Thinking, Fast and Slow demonstrates, the findings of experiments are often shown to apply though many real-life situations. A methodological limitation does not imply that we cannot learn anything. We did not evolve to play economic games, but it is an evolved human that is playing them.

The growing use of experimental games by evolutionary biologists reflects this, which was my main takeaway from the Social Decision Making: Bridging Economics and Biology conference last year. While it seems that evolutionary biologists are a few years behind economists in obtaining some results, their (generally) superior methodologies and use of evolutionary biology as the starting framework for the experiments gives me some confidence that they will draw the required links.

As a final note, Trivers also writes chapters in which he makes a similar point about the lack of biology in anthropology, psychology and psychoanalysis. One observation by a biologically inclined anthropologist friend of Trivers describes the situation. “[T]hey think we’re Nazis and we think they are idiots”. That is a fair summary of where we are at.

4 thoughts on “Trivers on biology in economics

  1. Jason may be relying entirely on modern representations of
    the co-called Invisible hand, which is: (a) attributed to Adam Smith (a
    fallacy, invented by the same modern economists from the 1940s and now widely
    believed), and: (b) is usually accompanied by another invention that says that Adam
    Smith said self-interest has the remarkable quality that it always operates to
    the benefit of the society, irrespective of the other motives of economic
    agents, including selfishness, or worse.


    Neither of these beliefs is accurate.  Indeed, Adam Smith was never so
    unworldly as to assert such a ridiculous notion.  In Wealth Of Nations (Books I, II, and III) he identifies
    over 70 instances of malign outcomes from the personal self-interest of certain
    individuals, which were detrimental to those affected (to which I would add that
    in Books IV and V, Smith excoriated European powers for their brutal imposition
    of colonial rule on the Americas and India).


    There was never any question of Adam Smith being starry-eyed
    about the possible detrimental affect of self-interest on others, themselves
    and the group.  


    If Jason Collins and Robert Trivers (and, of course, Robert
    Frank) believe something to the contrary, I would be interested where Smith
    expressed such naïve views; certainly not in his Moral Sentiments or in Wealth
    Of Nations. 


    As for possible inexcusable assertions to the contrary,
    there is no direct lineage of view from Adam Smith to modern neoclassical
    economics, so-called Homo economicus, and maximum or marginal utility theories.

    1. From the last sentence of my review of Frank’s The Darwin Economy:

      “As Adam Smith knew, competition does not always maximise the common good.”

      Frank is always careful to distinguish Smith’s views from some of his modern followers and Trivers does not even name Smith (and in fact, neither did I in this post).

      1. From my review of Robert Franks on
        “This Darwinian theory provides an alternative to Smith’s “invisible hand”
        theory, which suggests that deregulation allows self-interest to advance
        societal interest. However, Frank’s theory is not meant to absolutely contend
        with Smith’s, he said, adding: Smith explains how often there are effects of
        self interest. I have no quarrel with his insight.” Frank said he disagrees
        more with contemporary disciples of Smith who, wrongly interpret the principle
        of the invisible hand to be the sole determinant of the forces of capitalism. In
        my several reviews of his book,  I show that Frank’s understandings of Adam Smith’s use of the IH
        metaphor are as incorrect as the modern versions (similarly with his
        misunderstanding of Darwinian natural selection).


        Jason’s presentations of the
        modern attributions of the IH metaphor are similarly of a kind, and any
        distinction is not made clear in his article.  Any representation of “an invisible hand” operating in
        economics, directly attributed to Adam Smith or not (though all readers so
        attribute it!) is a myth. There is no invisible hand.  Biologists in this respect are attacking an empty set. 

Comments welcome

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s