Evolution and Economics

An off-the-cuff remark last week about two of my favourite topics set me off on todays rant. I was at an Institute for Liberal Studies seminar at the University of Toronto. The theme for the day was "From the Great Depression to the Great Recession - How should governments respond to crisis?" One of the speakers, Professor Steven Horwitz, compared the evolution of the eye to Austrian Economics. Huh?
In the war between creationism and evolution, one of the most decisive battles was the evolution of the eye. The creationist argument is captured in the phrase 'a design implies a designer,' and the eye is an intricate design. The argument, often called the "watchmaker analogy," claims that there could be no random series of events (the inaccurate view of evolution) that could possibly result in a complex timepiece or an eyeball. Of course that view is held because creationists have a false understanding of the theory of evolution.
Evolution is directed (not random), yet directionless (without purpose), orchestrated but disorganized, and no intelligent designer is required, thank you very much. How? Natural selection is the mechanism of evolution that Darwin and Wallace discovered more than 150 years ago. The secret to Natural Selection is time, huge almost incomprehensible spans of time; that, combined with differential reproduction (selection), genetics, and variation has given us the diversity of species that inhabit this planet.

So how does that relate to Austrian Economics? Simple, proponents of the Austrian School of Economics advocate for the smallest possible amount of governmental intervention in the economy, remove the so-called 'intelligent guiding hand of government' and let natural economic selection operate freely.
The point is, if you can believe that the eye evolved by Natural Selection over huge spans of time, surely you can believe that economies can function independent of government regulation and intervention. Of course the analogy isn't perfect, but in the case of Austrian Economics time is not the secret, the secret is hundreds of millions (billions?) of economic transactions that occur within an economy, each transaction is directed by a presumably intelligent individual (or company). Each individual or company seeks to improve their economic position by their transactions. The sum total of the economic transactions, represents the productive abilities of the individual, the company or the nation. There is nothing random about that kind of economy and it is definitely purposeful. The most successfully adapted individuals or companies will thrive, and grow their value and wealth. Those not well adapted will fall away, their value and wealth assimilated by the survivors.
I can hear the statists among you mumbling their "what abouts." What about the poor, the indigent and so on? Look around you, if you live in Canada or the United States, our partially unfettered economies has lifted everyone, even the poorest of the poor here, exceed the wildest dreams of the poor in most other jurisdictions. It's not an accident and it certainly is not a result of intelligent design. Imagine if the economy was truly unfettered.

In the picture (thanks to Redmond Weissenberger) left to right: George Bragues (Business Program Head, University of Guelph Humber and a regular contributor to Ludwig von Mises Institute of Canada ), Steve Horwitz (Professor of Economics, St. Lawrence University) and Niels Veldhuis (Vice President Research, Fraser Institute)