In 1860 Charles Darwin wrote to his American colleague, Asa Gray: “The sight of a feather in a peacock’s tail, whenever I gaze at it, makes me sick!” What was Darwin’s problem?
Darwin (1809 – 1882) had just published his masterpiece On the Origin of Species (1859), in which he laid out his theory of evolution by natural selection. Darwin had rushed The Origin into print so as not to be beaten out by his co-discoverer, Alfred Russel Wallace (1823-1913). Unlike Wallace, Darwin worried about many seemingly maladaptive features of living organisms – like the male peacock’s beautiful but cumbersome tail.
In 1871, Darwin published his second big book, The Descent of Man, and Selection in Relation to Sex. Here, Darwin argued that, besides natural selection, two sexual mechanisms were at work. Horns and other weapons as well as large body size of many males, he claimed, derived from the “Law of Battle”– the competition between males (mostly) for access to the opposite sex. He called the second mechanism “Taste for the Beautiful”. This happened when one sex, usually female, selected mates by some arbitrary aesthetic criterion – like eye spots on a peacock’s tail. Aesthetic selection could “run away”: When females selected a male for his long tail or his red cockade, they would produce male offspring with long tails or red cockades and female offspring with a taste for males with long tails or red cockades.
In The Evolution of Beauty, Yale ornithologist Richard Prum picks up the story. The Victorians were quite content with the “Law of Battle”, but “Taste for the Beautiful” – no way! The very idea that females could exercise active sexual choice appalled that prudish society. Wallace himself led the reaction, becoming more “Darwinian” than Darwin in his insistence that natural selection could account for all features of living things. As Prum details, Wallace’s view dominates evolutionary science to this day. Natural scientists have twisted themselves into knots explaining peacocks’ tails as somehow adaptive. A popular hypothesis is that the very burden of the tail indicates to a female that a male is extra fit and healthy.
Prum will have none of this. Of course, as he points out, there’s a trade-off between ornament and fitness. A bird with too long a tail won’t survive as well as one with only a moderately long tail. But nonetheless sexual selection can impair fitness*. He gives a telling example: the club-winged manakin. The male of this tiny neotropical bird makes a violin-like squeak by rubbing its wings together at high speed; to squeak, it has evolved distorted solid-boned wings that make it an inefficient flyer. Moreover, the female has the same wings, though hollow-boned and less extreme. (This happens because embryos start out identical and only later differentiate by sex; that’s why males have nipples.)
Prum recognizes the parallel to economics. He reports a conversation with his Yale colleague, Robert Shiller, who complains about the “efficient market hypothesis,” so popular before the crash of 2008. The “efficient market hypothesis” assumes that in the markets for stocks, bonds, other securities, and even land, the prices reasonably reflect future profitability. The hypothesis course turned out to be disastrously wrong in the stock market bubble of the roaring 20s, and in the world wide real estate bubble leading up to the crash of 2008. But I believe the problem goes deeper.
Conventional neoclassical economics assumes that in a capitalist society, competition forces all businesses to relentlessly maximize profit or fail. Marxian economics makes the same assumption. That’s why conventional economists celebrate capitalism, because it supposedly leads to efficiency and innovation. That’s why Marxists condemn capitalism, because it seems to require ruthless anti-social behavior. To me, the assumption that “cutthroat competition” alone shapes the economic world is equivalent to the “Darwinian” assumption that “survival of the fittest” alone shapes the natural world.
How might Darwin’s two alternative mechanisms show up in the economic world? The “Law of Battle” evokes vast advertising campaigns, often misleading, wasteful and ineffective. Or legal battles over patents and copyrights. But, like the giant horns on a bull elk, blowing money on such activities could signal corporate “fitness.” What about a “Taste for the Beautiful”? That evokes monumental, luxurious corporate headquarters, private planes, eye-popping salaries and other perks for corporate management. Do such features aid or hinder corporate profitability? The Wall Street Journal and the Financial Times overflow with accounts of executives pursuing their self-interest at the expense of the bottom line—even when the value of their stock is falling. Corporations are of course a modern invention; a few generations ago, when businesses were mostly run by families, it would have been laughable to deem the “conspicuous consumption” of wealthy owners as profit-maximizing behavior.
The same fallacy underlies both the theory of “survival of the fittest” and the theory of “cutthroat competition”. That’s the assumption that living species and economic organizations eternally teeter on the razor edge of survival. Put like that, it’s obviously nonsense. In the natural world, saying that a species occupies an ecological “niche” suggests there’s a particular location in which it has enough of an advantage to thrive in good times and survive in bad ones. That location might be a zebra’s gut for botfly larvae or New York City for Norway rats. Businesses have niches too: spots where they enjoy a little—or a lot—of monopoly power. Sr. Perez’s corner bodega enjoys a bit of monopoly power by being the most convenient shopping location at the most convenient hours in the immediate neighborhood. At the other end of the scale, there’s Exxon-Mobil. Monopoly can provide Sr. Perez a small cushion when bad weather keeps customers indoors; international monopoly provides a tempting slush fund for Exxon execs.
Prum reminds us we need to challenge rigid doctrines and follow Darwin’s open-minded investigation of the natural or economic world around us. (Of course, if the central problem of capitalism is monopoly instead of cutthroat competition, we must look for alternative solutions.)
* By “fitness”, Darwin meant adaptation to the environment, or ability to survive—an objective characteristic. Modern evolutionary scientists, to Prum’s infinite annoyance, have redefined “fitness” as relative success in passing on one’s genes. This circular definition—success as its own measure—makes Darwin’s ideas of sexual selection meaningless.