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Wednesday, October 3, 2012

Survival of the “Fittest”

Last April President Obama called a House Republican budget plan “thinly veiled social Darwinism.” Of course Obama meant it as a put-down. But by the Encyclopedia Britannica’s characterization, social Darwinism is simply a correct, ideology-free statement about the world. Moreover, the fact that Obama is president is evidence of social Darwinism. Let me explain.

The Encyclopedia Britannica describes social Darwinism as “the theory that persons, groups, and races are subject to the same laws of natural selection as Charles Darwin had perceived in plants and animals in nature.” “According to the theory,” says the Encyclopedia, “the weak were diminished and their cultures delimited, while the strong grew in power and in cultural influence over the weak.” The Encyclopedia states that social Darwinists “held that the life of humans in society was a struggle for existence ruled by ‘survival of the fittest,’ a phrase proposed by the British philosopher and scientist Herbert Spencer.”

That raises the question: What is “fit?” The answer to that depends crucially on the context—that is, on what is rewarded.

Take the Soviet Union. Was Joseph Stalin particularly fit? He certainly didn’t produce much that other people valued; yet he thrived. He did so by lying, manipulating, intimidating, and murdering, all on a massive scale. In the Soviet Union the fittest got the best food, houses, cars, and more, but fitness meant the ability and willingness to be untrustworthy, unscrupulous, and bloodthirsty. In that environment Stalin was indeed one of the fittest.

Or take a street gang. The fittest street gangs are those whose members know how to fight the best and who are the least scrupulous about using physical violence. In this way a neighborhood policed by street gangs is similar to the Soviet Union: The most ruthless succeed in each.

That shouldn’t be surprising. In both environments the most important rule is: Kill or be killed. There is no protection of the rights of someone who simply wants to go about his or her business peacefully. Peaceful, productive people are in fact sitting ducks waiting to be picked off by the violent.

This is a kind of natural selection. The environment “selects for success” those who are best at working within its rules. You tell me the environment and the rules, and I’ll tell you the kind of people who will emerge as the fittest.

Survival of the Sincerest

Back to Obama. The media and the voters tend to reward people who, however insincerely, sound as if they care. The evidence that they do care is much less important. And Obama, who is very good at sounding sincere while carrying out actions that often contradict his “sincere” statements, was rewarded with arguably the most powerful job in the world.

Take the rules of academia.You might think that the people who would do well in academia are those who teach the best and contribute the most to knowledge by writing clearly about important issues. But the best teachers are less likely to get tenure because they spend more time on teaching and less time on research than others. Those who do get tenure tend to be the people who publish, and more than 90 percent of their publications are badly written articles in obscure journals about issues of limited interest. Yet these people are the “fittest” because the main rule in academia is “publish in academic journals.” The easiest way to do that is to specialize in one or two very narrow issues, so that you can be one of five to 20 people in the world who are considered experts on those subjects.

Or consider the free market. What are its rules? One rule is that private property rights are respected for all—not just for the wealthy executive but also for the person selling hotdogs on the street corner. Another rule is that contracts are respected and enforced. A third rule, part of property rights, is that people are free to exchange goods or services with each other.

Under those rules, as Adam Smith stated more than 230 years ago in The Wealth of Nations, the people who fare best are those who figure out what they can do well that other people are willing to pay for. The key to getting wealthy in a free market is to find a new product people want, a fresh use for an old product, a use for idle resources, or a cheaper way of making or delivering an existing product. The person who creates a software program that does something many people want accomplished, and who then figures out how to market it, will make a lot of money. The person who finds some new use for an unused resource—garbage, wood chips, the blank space on the white uniforms of top-seeded tennis players—will also make a lot of money.

People also do well in a free market by being trustworthy. When I buy a hamburger at McDonald’s, whether in San Jose, Moscow, or Paris, I am sure of getting a certain minimum quality. That’s why people often eat at branded restaurants when traveling in strange places—they want quality assurance. McDonald’s, Coca-Cola, and many other well-known brands are worth a lot because their owners have invested in establishing a reputation.

Survival of the Weakest, Too

And here’s the bonus. Although those who do best in a free market are those who are the most productive, even the least productive thrive. One reason is competition. Because of the pressure to innovate more quickly and usefully than their competitors, and to price their products more attractively, people like Bill Gates and the late Steve Jobs created more benefits for us than they will ever create for themselves.

The other reason even the least productive thrive in a free market is capital accumulation. The dividends and interest people earn by accumulating capital in a free market give them an incentive to accumulate capital, and the high amount of capital per worker makes workers more productive, thus increasing their wages. Every worker in a free-market economy, even someone with no capital, gains enormously because of the past capital accumulation of others. Just compare the standard of living of the typical poor person in the United States today with that of a counterpart in India, China, or most of Africa, places without a long tradition of free markets.

The correct statement, therefore, is not that only the fittest survive in a free market. Rather, in a free market, the fittest—the most productive—do best. And free markets allow more and more people to survive who wouldn’t even stand a chance in an unfree economy.

The important question is not whether one thinks the fit will survive and thrive better than the unfit. They will. The important question is how the rules define “fit.”

  • The Foundation for Economic Education, founded 1946, works for a free and prosperous world.