What Charles Darwin can teach us about building a fairer society
Who was the greater economist—Adam Smith or Charles Darwin? The question seems absurd. Darwin, after all, was a naturalist, not an economist. But Robert Frank, New York Times economics columnist and best-selling author of The Economic Naturalist, predicts that within the next century Darwin will unseat Smith as the intellectual founder of economics. The reason, Frank argues, is that Darwin's understanding of competition describes economic reality far more accurately than Smith's. And the consequences of this fact are profound. Indeed, the failure to recognize that we live in Darwin's world rather than Smith's is putting us all at risk by preventing us from seeing that competition alone will not solve our problems.
Smith's theory of the invisible hand, which says that competition channels self-interest for the common good, is probably the most widely cited argument today in favor of unbridled competition—and against regulation, taxation, and even government itself. But what if Smith's idea was almost an exception to the general rule of competition? That's what Frank argues, resting his case on Darwin's insight that individual and group interests often diverge sharply. Far from creating a perfect world, economic competition often leads to "arms races," encouraging behaviors that not only cause enormous harm to the group but also provide no lasting advantages for individuals, since any gains tend to be relative and mutually offsetting.
The good news is that we have the ability to tame the Darwin economy. The best solution is not to prohibit harmful behaviors but to tax them. By doing so, we could make the economic pie larger, eliminate government debt, and provide better public services, all without requiring painful sacrifices from anyone. That's a bold claim, Frank concedes, but it follows directly from logic and evidence that most people already accept.
In a new afterword, Frank further explores how the themes of inequality and competition are driving today's public debate on how much government we need.
Robert H. Frank is an economics professor at Cornell's Johnson Graduate School of Management, a regular "Economic View" columnist for the New York Times, and a Distinguished Senior Fellow at Demos. His books, which have been translated into twenty-two languages, include The Winner-Take-All Society (with Philip Cook), The Economic Naturalist, Luxury Fever, What Price the Moral High Ground?, and Principles of Economics (with Ben Bernanke).
Table of Contents
Preface ixChapter 1 Paralysis 1Chapter 2 Darwin's Wedge 16Chapter 3 No Cash on the Table 30Chapter 4 Starve the Beast—But Which One? 46Chapter 5 Putting the Positional Consumption Beast on a Diet 64Chapter 6 Perpetrators and Victims 84Chapter 7 Efficiency Rules 100Chapter 8 "It's Your Money . . ." 119Chapter 9 Success and Luck 140Chapter 10 The Great Trade-Off? 157Chapter 11 Taxing Harmful Activities 172Chapter 12 The Libertarian's Objections Reconsidered 194Afterword to the Paperback Edition 217Notes 223Index 235
What People are Saying About This
From the Publisher
"I've been reading Robert Frank's books for years, and he just gets better and better. I strongly recommend The Darwin Economy: it's clear, persuasive, and cleverly entertaining, and it provides a new and original insight about a central issue in economics. Read and enjoy."—Thomas C. Schelling, Nobel Laureate in Economics"The Darwin Economy debunks popular nostrums of both left and right, and takes particular aim at the notion that a well-functioning competitive market system will necessarily produce socially optimal results. Frank suggests novel approaches to America's problems that go well beyond the tired ideas of the present debate."—Francis Fukuyama, author of The Origins of Political Order"Competition often serves the parts better than the whole. This is true for both species evolution and human society. Only a fool would count on the invisible hand. In his usual clearheaded and lively style, Robert Frank explains how Charles Darwin thought more deeply about these issues than most contemporary economists."—Frans de Waal, author of The Age of Empathy and Our Inner Ape"Pointing to new ways of thinking about collective action and taxation, Robert Frank has given us a book that is as important as it is timely."—Dan Ariely, author of Predictably Irrational"The Darwin Economy's message is in my view the only hope for a rational economic future."—William J. Baumol, past president, American Economic Association"This lucid, deeply engaging book provides the perfect antidote to the mindless sloganeering that dominates our current discussions about the role of government in a free society."—Dani Rodrik, author of The Globalization Paradox"Robert Frank convincingly predicts that Darwin will eventually be recognized as the true intellectual father of economics. After you read The Darwin Economy, you'll want this prediction to come true as soon as possible."—David Sloan Wilson, author of Evolution for Everyone: How Darwin's Theory Can Change the Way We Think About Our Lives"Pondering the implications of Darwinian theory, and rejecting the received wisdom of libertarian and left-wing pundits alike, Robert Frank convincingly lays out economic policies that will benefit the rich, the poor, and the broader society."—Howard Gardner, author of Truth, Beauty, and Goodness Reframed"Human beings cooperate. Markets help. That's Adam Smith. Human beings also compete: not just for resources, but for relative position in the mating game. That's Darwin. Add Darwin to Adam Smith, and you get Robert Frank, and a book full of dazzling insight."—Mark Kleiman, author of When Brute Force Fails"Robert Frank is a national treasure in our discussions about public policy. He shows here that our understanding of economics needs to be informed more by a sophisticated interpretation of Charles Darwin than by a simplistic view of Adam Smith. Given the state of our politics, this latest dose of Frank advice deserves to be widely read."—Robert D. Putnam, author of Bowling Alone and American Grace
