A REVIEW: Michael Shermer’s Mind of the Market

March 28th, 20086:57 pm @

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Michael Shermer likes to tread dangerous waters. His latest dip into challenging the received turbulance of our times is an evolutionary explanation for the state of Modern Capitalism. Politicos, religionists and the lay masses, if they actually take a gander through Shermer’s The Mind of the Market: Compassionate Apes, Competitive Humans, and Other Tales from Evolutionary Economics A REVIEW: Michael Shermers Mind of the Market, will likely recoil in disagreement. “You mean to say democratic life is not God-ordained?” they may gasp.

Shermer, chief evolutionist and resident skeptic at Skeptic Magazine, has long maintained the root of human behavior lies not only in our biology but in how our surroundings influence our actions. In this latest iteration, Shermer traces human evolution to explain why we are the way we are today. “If our species is about a hundred thousand years old, then 90 percent of our history has been spent in (a) state of relative economic simplicity,” he writes.

It’s true. The 1997 anthropological manifesto Limited Wants, Unlimited Means: A Reader On Hunter-Gatherer Economics And The Environment A REVIEW: Michael Shermers Mind of the Marketdescribes in various essays how our hunter-gatherer ancestry got along in sustainable bands and tribes. Shermer, similar to these others before him, then extrapolates the “relative state of economic simplicity” into what we are today: consumer traders.

He cogently says that ”although we have legislated and educated … ancient trial rituals out of culture, their psychological underpinnings are still buried deep in our brains, waiting to be stirred into action.” Think gang skirmishes,  warfare, peaceful trade and peaceful exchange. Not all good, not all bad. Put simply: we are both good and evil. And we always have been.

This reality is in concordance with the dramatic cultural shift that occurred in our history–the adoption of large-scale agriculture as the primary means of subsistence, which eventually led us into the industrial revolution. “The attendant leap in food production and population that accompanied the shift to chiefdoms and states allowed for a division of labor to develop in both the economic and social spheres,” Shermer explains. The ramifications of these profound changes have been enormous.

Shermer excels in showing just how these changes manifest. He takes from the latest research developments in neuroscience, primatology, evolutionary psychology, behavioral economics and social psychology to explain how our modern ways–rooted in our hunter-gatherer psychology–are presented in behaviors such as stock market investing and making poor money decisions, such as creating credit card debt and gambling.

The Mind of the Market is a libertarian manifesto at heart, which will turn some away. Critics will have plenty to say about his end-of-book deductions, such as saying the path to freedom is through McDonald’s ownership in developing countries, or equating the free-market process to evolutionary processes. These are shallow representations of what he actually says, which is, ultimately: “Given our duel disposition to be both good and evil, and the power of the environment to elicit one or the other, we much choose freedom, then create the circumstances in which it can be realized, and then defend it once it is achieved.”

 The strength with The Mind of the Market is Shermer’s application of evolutionary and biological knowledge in explaining in depth why we are the way we are. Taking from multiple scientific disciplines and forming a reasoned argument is always bound to cause ripples. With Shermer at the helm, though, it’s always a great read.