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 | The Darwin Economy: | Authors On Camera feature |
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Large FlashWho 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. Robert H. Frank is an economics professor at Cornell's Johnson Graduate School of Management and a regular "Economic View" columnist for the New York Times, and a Distinguished Senior Fellow at Demos. His books, which have been translated into 22 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). "Important."--Nicholas D. Kristof, New York Times "[An] excellent new book . . ."--Jonathan Rothwell, New Republic's The Avenue blog "The premise of economist Adam Smith's 'invisible hand'--a tenet of market economics--is that competitive self-interest shunts benefits to the community. But that is the exception rather than the rule, argues writer Robert H. Frank. Charles Darwin's idea of natural selection is a more accurate reflection of how economic competition works . . . because individual and species benefits do not always coincide. Highlighting reasons for market failure and the need to cut waste, Frank argues that we can domesticate our wild economy by taxing higher-end spending and harmful industrial emissions."--Nature "[P]rovocative. . . . Frank is an economist for the rest of us. . . . [T]he Darwin Economy . . . focus[es] on one paradox of economic life: behavior which makes sense for a particular individual can harm the community as a whole."--Chrystia Freeland, Reuters "Frank's worthy and unfashionable aim is to argue the economic case for some forms of government regulation, to defend taxation, and even to advocate certain forms of tax increase."--Howard Davies, Times Higher Education "The Darwin Economy fundamentally challenges this theory of competition which, argues Frank, is a flawed way of understanding competitive forces throughout many aspects of economic life. . . . Frank adds something new to the debate. . . . [H]e offers a powerful theoretical insight into the nature of competitive economic forces and the free market. . . . [I]t is an insight we could all potentially benefit from."--Daniel Sage, LSE Politics & Policy blog "[V]ery illuminating."--Matthew Shaffer, National Review Online's The Agenda Preface ix Other Princeton books by Robert H. Frank:
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