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Amoeba, Fish, Lizard, Ape, Human, Investor... Meet Evolutionary Economics

Tyler Durden's picture




 

Via ConvergEx's Nick Colas,

We’re always interested in alternative economic frameworks that can help address the sizable gaps left open by classical approaches. Behavioral economics can fill part of that void, of course, as it describes some basic shortfalls in the assumption that we’re all superhuman welfare maximizing individuals. One step beyond that is evolutionary economics, which borrows from biology rather than psychology to form models about economic behavior.

 

The key differences between this strain of economic analysis and the textbook stuff we’ve all learned are twofold.

  • First (and like their behavioral counterparts), evolutionary economists do not believe that humans act to simply maximize individual well-being.
  • Second, they discard the notion that any economic system can be in equilibrium. Rather, they see the process of setting price by supply/demand as dynamic and, well, evolutionary.

Open adherents to this approach are thin on the ground in official circles, although Bank of England research chief Andy Haldane does have some clever economic “hacks” that leverage its ideas. But we can’t help but think that venture capitalists and many public equity investors are closet “Evolutionists”, so this is a discipline worth a few words of explanation.

I do most of my shopping online, and I tend to only use two retailers: Amazon and eBay.  I am a Prime customer on the first and have 15+ automated searches on the second.  If anyone ever puts up an ancient Ferrari Mondial convertible without a reserve, I plan to be the first person to know about it.    Hasn’t happened yet, but there’s always hope.

After a purchase from either company, there is always a request to leave feedback.  I always leave feedback for eBay vendors, but never for Amazon.  The way I see it, the guy with the weird eBay user handle needs every positive rating he can get. Amazon, not so much. 

By the rules of classical economics, I shouldn’t bother with either.  I have enough eBay ratings that no seller is going to reject my bid.  Amazon has my credit card number and shipping address; they don’t care either.  Even looking at the web page or email that requests feedback is a waste of time – something a selfish, wealth and welfare maximizing economic agent would never do.  

Ever since the Financial Crisis everyone from professional investors to academics to anyone who cares about public policy has been searching for better paradigms to understand how people make economic decisions.  Classical economics – the theory that profit and welfare maximizing humans make individual decisions that lead to optimal societal allocations of capital – seems a bit too Gordon Gekko-ish now. Even Alan Greenspan famously admitted that his belief that free markets need little regulation had a “Flaw” in his 2008 post-mortem/testimony to the House Committee on Oversight and Government Reform.

Behavioral economics has taken up a lot of the slack, with its common-sense approach to humanizing the models used by classical economics.  Instead of modeling a world where everyone grabs every penny off the street, this discipline inserts some humanity into the narrative.  We’ve written in the past about the Ultimatum Game: two strangers have to split up $100 in negotiation of one offer and then accept/reject decision where a rejection means no one receives any part of the money. Classical economics says $1 is the correct offer, since the person receiving it is still better off than before they started the game. Of course, in real life every offer of $1 gets rejected; people want $20-$60 dollars or they are perfectly happy to spite the other player so that no one gets anything.  “Spite” is not any input in any classical or neoclassical economic model. 

Now there is a modest but growing interest in something called “Evolutionary economics” which uses concepts from biology rather than psychology to inform economic analysis.  The history of this discipline is actually close to 100 years old and its most famous early advocate was Joseph Schumpeter, who argued that innovation disturbs macroeconomic equilibrium and forces adaption in a manner much like a changing environment pushes a species to adapt or die.

Evolutionary economics now is something quite different, for it rejects two core assumptions of classical economics.  None other than Paul Krugman, in a speech back in 1996, outlined it quite well if you want to read his take.  The two key differences are:

“Evo-economics” doesn’t believe that humans only make decisions to maximize their own selfish welfare.  Instead, it points to our biological predilection to work in small groups rather than going it alone. Evolution pretty clearly favors those who can get along with others rather than the greedy misanthropes of classical economics.  

 

It also doesn’t believe that economic systems exhibit equilibrium – the notion that there is a stable market clearing price where buyers and sellers meet until something changes in either one or both of their situations. Rather, everything is in a state of constant flux like a predatory animal – either asleep after a heavy meal or on the prowl for her next one.

The whole thing has a Lennon-esque “Imagine there’s no heaven” quality to it, but there is some merit to considering what evolutionary economics can tells us about economics, markets and business models.  One narrow but useful example comes from the Bank of England’s research head, Andy Haldane. During the lead up to the Scottish Referendum the BoE actively tracked social networks for signs of bank runs.  If Twitter users started to use words like “Panic” and “Scottish bank”, the UK central bank would have an early warning that depositors were losing confidence in the banking system.  This is exactly what the U.S. Centers for Disease Control do to track flu season – and something that classical economics would tell you is a waste of time.  Why would depositors worry?  That’s irrational. 

Now, the chance that mainstream economists – especially those in policymaking organizations – will embrace a system that has no concept of equilibrium is, oh, about zero.  Without the “=” sign there is little of the elegant certainty that gives economics its current social standing and central banks the preeminence in western society.  Fair enough – everyone’s got a mortgage payment to make and kids to get through college.  Even economists. 

But as I read through the basics of evolutionary economics, it strikes me that much of the current spate of venture capital spending on technology is closely aligned with the concepts we’ve reviewed here. Social networks – broadly defined to include everything from Facebook to WhatsApp to Uber – are very much about harnessing groups of people with smartphones to remake social interaction on a very wide scale. And, in case you hadn’t noticed, these companies get huge valuations when they get things right. Human beings want the most convenient ways possible to connect with other humans, for commerce or personal interaction, and they are willing to hand over money, privacy, and time to get that. It’s not that classical economics couldn’t have predicted the rise of these businesses; it’s just that evolutionary economics does a better job of explaining why they work so well.

Of course, the more difficult part of evolutionary economics is the thought that everything is perennially in flux and the stability offered – even theoretically – by classical economics is a flawed concept.  We want there to be stability, even if it is momentary.  A chance to rest and catch our breath before anything changes.  A world where the lion is always chasing us seems too exhausting to consider.  But again, the world of technology and venture capital sees it differently.  As VC Mark Andreesen famously said in a 2011 Wall Street Journal editorial, “Software is Eating the World”. That’s evolutionary economics at its harshest but likely most real.  Eat, or be eaten.

Read more here...

 

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Fri, 07/31/2015 - 14:19 | 6376252 Headbanger
Headbanger's picture

Forgot Muppet

Fri, 07/31/2015 - 14:39 | 6376316 e_goldstein
e_goldstein's picture

and cannibalistic cephalopods, but I'm being redundant.

Fri, 07/31/2015 - 14:52 | 6376364 Headbanger
Headbanger's picture

Especially the Cephalopoda Banksterida!

https://en.wikipedia.org/wiki/Cephalopod

Fri, 07/31/2015 - 15:08 | 6376433 Save_America1st
Save_America1st's picture

so after ape it's pretty much all downhill from there...back to the primordial ooze

Sat, 08/01/2015 - 13:53 | 6376595 Radical Marijuana
Radical Marijuana's picture

That depends on one's perspectives on

the Holy Spirit of Evolutionary Progress.

The old trinity of

God, the Son, and the Holy Spirit,

morphed to become

Science, Technology, & Evolutionary Progress.

Human beings are now transforming more energy than ever before, BUT, they have not yet developed corresponding degrees of non-linear functions that do that in ways which enable more life and consciousness.

There now exist globalized systems of electronic monkey money frauds, backed by the threat of force from apes with atomic bombs, which  most probably appears to be headed "all downhill from there...back to the primordial ooze."

The alternatives would be to go through sufficient series of intellectual scientific revolutions, such as developing economics to become more consistent with evolutionary ecology. However, as my comment below outlined, that runs into HUGE POLITICAL OBSTACLES!

Fri, 07/31/2015 - 14:53 | 6376366 Squid Viscous
Squid Viscous's picture

and the Lizards win, again!

Fri, 07/31/2015 - 15:19 | 6376478 doctor10
doctor10's picture

"evolutionary economics" superficially appears to be a clever buzzword, seeded into a few univeristy economics depts, wrapped in a few million dollars of grant seed money in the desperate hope that real minds and eyes won't look too closely at the parasitic mess central banker shave forged with the US Govvernments' Treasury Dept and market regulatory apparatus.

Fri, 07/31/2015 - 15:44 | 6376564 agent default
agent default's picture

There is one born every minute.

Fri, 07/31/2015 - 16:24 | 6376726 Baa baa
Baa baa's picture

And that gives me great sadness...

Fri, 07/31/2015 - 14:20 | 6376256 JustObserving
JustObserving's picture

As long as the new economics ignores the massive manipulation of markets by the banksters, it is bound to fail

Fri, 07/31/2015 - 15:03 | 6376394 MsCreant
MsCreant's picture

I am playing devil's advocate here.

Are investors not adapting to tracking the Fed and the politics and personalities around the Fed, instead of fundamentals, to make a few nickels before the steamroller arrives?

Is it not the case that the Fed has set up an unstable environment, always in flux, flash crashing, fat fingering, etc. that makes the investor always in the position of being hunted?

You make decisions knowing manipulation and insider trading is happening. And HFT. Algos. No humans in the room any more, but they represent the collective cooperative movements of groups of people (never before possible without computers). Bots trading against each other. Co-location. THIS IS THE ENVIRONMENT. Adapt or die. Or, don't play (like me). But I am hunted too. ZIRP. War on cash. Manipulated PMs. The thing the wise participant knows these days is that YOU ARE BEING MANAGED. The job is to decide what they are doing and what kind of outcome they are trying to get. Respond to that.

Remember this too, evolution weeds out the bad. This is all possible because people believe participating in this is in their best interests.

When supply chains fail (shortages, environmental degradation) there will be more adaptation. Smaller groups will emerge to trade with each other.

One could argue evolution works just fine with the idea of manipulation, provided we let the [manipulated] model play out and the consequences land.

What is jarring for us is the speed of the changes. Some of us will not be able to adapt. 

Fri, 07/31/2015 - 15:17 | 6376470 Consuelo
Consuelo's picture

 

 

'When supply chains fail there will be more adaptation...?'

 

Oh yeah...   No one said it would be rational or friendly though...   

Fri, 07/31/2015 - 14:22 | 6376262 Chuck Knoblauch
Chuck Knoblauch's picture

This has got to be the dumbest article yet on ZH.

It must be Friday.

Fri, 07/31/2015 - 14:28 | 6376285 Dr. Engali
Dr. Engali's picture

Nick Colas (now isn't that a witty play on words?) writes some of the dumbest shit out there. I rate him right down there with Dennis Fartman and Jim Crammer.

Fri, 07/31/2015 - 16:43 | 6376789 GeezerGeek
GeezerGeek's picture

I gave up reading after he said he wanted a Mondial. Talk about aiming low! Yeah, beauty is in the eye of the beholder, but the back seats are too small to have any fun in if your legs weren't amputated.

Fri, 07/31/2015 - 14:38 | 6376300 NotApplicable
NotApplicable's picture

To me it seems that the author has setup one straw-man after another to knock down, doing nothing more than personalizing his definition of "classical economics."

For instance, I find nothing at all in this article that refutes the "welfare maximizing economic agent" idea behind economics. What the author has done instead, is to take some of the considerations and called them "non-economic" in an effort to differentiate between the two allegedly differing schools of thought.

To insist that classical economics is only a study of monetary gain/loss is to fully ignore all other forms of non-tangible/quantifiable gain/loss. Now, is that really a fair view of classical economics, or is it just a straw-man's straw-man?

I'm quite sure that Menger, Mises, et al., took this all into account (marginal utility, psychic profit, etc...). Just because it doesn't fit into the neo-classical framework of aggregate manipulation that is the cult of Keynes doesn't mean that it never existed.

 

Fri, 07/31/2015 - 14:40 | 6376321 Chuck Knoblauch
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I don't believe in the theory of evolution.

Neither does the elite.

For mass consumption only.

Fri, 07/31/2015 - 14:59 | 6376391 Skateboarder
Skateboarder's picture

People come back all the time. A soul is too precious to not recycle. You get your memory erased first though  ;-)

Fri, 07/31/2015 - 15:14 | 6376454 Chuck Knoblauch
Chuck Knoblauch's picture

No, Satan gets your soul.

Another victory for the asshole.

Fri, 07/31/2015 - 16:51 | 6376822 GeezerGeek
GeezerGeek's picture

While I do not believe that evolution is possible - it's statistically beyond impossible, in fact - I do believe in genetic entropy, which means I believe in devolution. Advances in modern medicine and nutrition hide the fact, but our genes seem to be regressing.

The theory of evolution is for mass delusion.

Fri, 07/31/2015 - 14:30 | 6376276 Dr. Engali
Dr. Engali's picture

 "If Twitter users started to use words like “Panic” and “Scottish bank”, the UK central bank would have an early warning that depositors were losing confidence in the banking system.  This is exactly what the U.S. Centers for Disease Control do to track flu season – and something that classical economics would tell you is a waste of time."

  

 

 

Twitter is used as a form of government tracking.... Now who would have thunk that?

Fri, 07/31/2015 - 14:26 | 6376279 vq1
vq1's picture

nicely written. What comes to mind is that humans evolve really slowly, like most living things. However our technology has evolved very quickly. As one person stated it- "we have new age software (technology) with outdated hardware (us)"

 

Technology brings us some great potential. But we are utilizing in a ham-fisted archaic way. Companies use it to sell garbage, consumers use it to watch porn, wall street uses it to... well you know and government uses it to control the population. So really we are only using this great technology to complete the same old goals instead of new ones. 

Fri, 07/31/2015 - 17:04 | 6376855 GeezerGeek
GeezerGeek's picture

Many proponents of slow evolution gave up and became proponents of 'punctuated equilibrium'. Slow, gradual evolution failed as a theory because there was no substantiating data in the evolutionists' version of geologic history. (No transitions from one species to another were ever found.) So the latter was invented, positing a theory in which there were bursts of evolutionary change that happened in such short timeframes that there was no significant chance that transitional forms would enter the geologic record. It's all BS. Our technology has, as you pointed out, evolved quite quickly in the last 100-150 years, and continues to expand rapidly. Before that, technological advances were much less frequent and often forgotten. Technological evolution, however, is an example of intelligent design, something evolutionists refuse to consider: If there is intelligent design, there must be a designer. Or Creator. 

Can't have that now, can you?

Fri, 07/31/2015 - 14:29 | 6376290 Seer
Seer's picture

"A world where the lion is always chasing us seems too exhausting to consider."

Smart folks will hang out with folks slow-of-foot.  Problem solved! (lions don't run forever, they cannot run the distances that a human [one that is not slow] can)

"As VC Mark Andreesen famously said in a 2011 Wall Street Journal editorial, “Software is Eating the World”."

Yeah, as in algos.  As people become poorer and poorer they won't be engaging in supporing all of this.  It'll come down to writers and other non-productive entitites whipping the slaves back to order so that the non-productives' masters can continue to use software to create and control Their world.  And then power shortages come...  Technology is tightly linked to the Ponzi/Bubble.

The Wall Steer Journal and Bllomberg can go fuck "themselves."

Fri, 07/31/2015 - 14:34 | 6376302 williambanzai7
williambanzai7's picture

ORIGIN OF FECES

Fri, 07/31/2015 - 15:06 | 6376427 MsCreant
MsCreant's picture

You did that quick! Impressive as all get out.

Where is that wombat, Alan Greenscam?

 

Fri, 07/31/2015 - 16:18 | 6376701 Baa baa
Baa baa's picture

Dad?

Fri, 07/31/2015 - 14:35 | 6376306 Mrs. Cog
Mrs. Cog's picture

There are a handful of us obsessive compulsive gardener/canners who see economics evolving in the near future to trading primarily in mason jars and their contents. It cuts out most of the middlemen. My country club relatives have a hard time entertaining the notion, but time will tell. :-)

Fri, 07/31/2015 - 14:45 | 6376330 Headbanger
Headbanger's picture

Canning is a wonderful skill to use when not re-loading.

And just imagine how valuable real maple syrup will be worth in trade when there's no sugar nor corn syrup mass production.

Fri, 07/31/2015 - 14:58 | 6376386 Miffed Microbio...
Miffed Microbiologist's picture

I've come to the conclusion economists are simply trying to find a perfect model of all things human. Somewhat pointless considering the complexity of the endeavor. At least looking to the natural world for a more valid description seems a step in the right direction from theoretical simulations.

I harvested my red bell peppers and the last of my pole beans last weekend. My meat chickens are coming along nicely and my eggs are appreciated by my customers. Simplistic? Yes. Maybe a hungry economist will wish they had something of value to trade with us someday.

Miffed;-)

Fri, 07/31/2015 - 15:09 | 6376443 MsCreant
MsCreant's picture

Hope you can plant some winter crops. Some folks use the hoop covers and get excellent results. A ZHer, Davey Jones, is waay north, and he says it has changed everything for him and gardening. He is, er, North of you by a bit I believe.

Fri, 07/31/2015 - 15:29 | 6376521 Miffed Microbio...
Miffed Microbiologist's picture

Yes, we are blessed with a long growing season. The trick is using water judiciously and facing facts when experiments fail. Citrus works well. Macadamia nuts, no.

My brother has claimed I am suffering from zone denial and I am coming around to his advice to focus on what my area produces well. My Victory Garden fantasy has been edited. Perhaps it is best to understand this before a hobby becomes an absolute necessity.

Miffed

Fri, 07/31/2015 - 15:41 | 6376554 MsCreant
MsCreant's picture

In a crisis, urine and humanure...

You would know better than most how to detect and deal with the downsides of these, er, alternatives.

 

I forgot your drought. Apologies.

Fri, 07/31/2015 - 20:15 | 6377415 Mr.Miffed
Mr.Miffed's picture

We can see the effects of the drought as many native desert plants are dying. The interesting part about trying to raise food in a desert with a drought is the increased intensity of the predators. Our garden area is fully screened sides and top with 1" chicken wire to stop rabbits and birds. Last year we had an abundance of tomatoes. This year we have yet to get a single one as something (gopher or squirrel) is eating them. The coyotes have dug numerous deep tunnels under the fences which were reienforced to thwart this to get into the chickens. Each side is learning and adapting.

Sat, 08/01/2015 - 00:43 | 6377929 MsCreant
MsCreant's picture

Nice to meet you, we have not had an exchange here before.

Lots of folks hate Isreal here but I wonder if reading up on gardening there would help you front run this thing a little. That came out of my butt, I am not in the know. 

I don't have your problems but I bet there is a way. I was outraged to hear how you were treated in regards to your cistern. It was a real education. 

I do have a family of 5 raccoons raiding my apple trees and my peaches. I am going to try cyane pepper on the advice of a local. They steal the bird food too. 4 of them are young, they are sooooo cute. But, they are stealing the results of my work (they live in a very tall pine tree in my yard).

Raccoons have always lived in my yard. They have never been this aggressive with my food. Stolen cantalope here and there, but no big deal. They were out this morning going after apples and the seed cake in the bird feeders. Your situation is more obvious than mine, but I am wondering...

Nice to hear from you.

Sat, 08/01/2015 - 22:44 | 6380292 Mr.Miffed
Mr.Miffed's picture

Well something clever reached under our baby turkey chick cage and killed one of the hatchlings. I promptly added a floor. Again something pried the edge of the door and got another. I added an extra latch at the bottom and set up a night cam. Mr. Raccoon was caught trying to find another weakness. In past years this double fenced pen raised brood after brood of chicks.

You might have a point that I should do some research on what others have done rather than reacting to each crisis. Certainly Miffed would appreciate not going through the heart ache of seeing her baby chicks lost.

Sat, 08/01/2015 - 03:32 | 6378051 boattrash
boattrash's picture

Mr. Miffed, Great to see you here. It sounds like you have a working system in place. Just thought back to some Vids from Geoff Lawton, on Greening the Desert. Seems like he did one in Jordan that was nothing short of amazing.

You can find them on Youtube, (was going to link it, but web sucks offshore)

Fri, 07/31/2015 - 14:43 | 6376333 jmcwala
jmcwala's picture

I like socionomics- herd behavior. Fear or greed overcome logic. Buy high and sell low-when everyone does something, you go along with the crowd. Look no further than the euphoria followed by the panic and mass exodus in China.

Fri, 07/31/2015 - 14:50 | 6376351 stocktivity
stocktivity's picture

wait...I thought it was Adam and Eve made from a handful of clay????  Oh shit! Now I did it on a Friday afternoon.

Fri, 07/31/2015 - 17:12 | 6376873 GeezerGeek
GeezerGeek's picture

Gene McDaniels sang about it: https://www.youtube.com/watch?v=iGNlIyEGKPg

100 lbs of clay. It's on youtube, so it must be accurate.

Fri, 07/31/2015 - 14:51 | 6376362 Clowns on Acid
Clowns on Acid's picture

Rather than writing about the immorality of money printing and the grand theft by Bank managements (read Dimon, Blankfein et al) Mt Colas writes a theoretical fluff piece that is supposed to be "Oh so interesting".

Guess that is what one has to do to keep the check coming in every month from a brokerage compnay...Eh Mr Colas?

Fri, 07/31/2015 - 14:56 | 6376380 orez65
orez65's picture

How about:

"Obamanomics": You didn't do that.

"Hillamoronomics": Government creates jobs

"Kruganomics": Counterfeiting dollars creates jobs

"Bidenomics": That's a big fu.king deal

"Pelosinomics": You have to pass Evolutionary Economics to understand what it is.

"This Articlenomics". Bull Sh.t!

 

 

Fri, 07/31/2015 - 16:15 | 6376687 Baa baa
Baa baa's picture

Anything to avoid the math!

Fri, 07/31/2015 - 15:14 | 6376450 PrimalScream
PrimalScream's picture

IS the global economy some sort of giant computer game that occasionally spits out tokens with a cash value?

OR

IS the global economy a group of markets that are supposed to serve mankind and make the world a better place?

WHO tries to answer this question ... these days? Is anyone trying to answer this question?

 

Fri, 07/31/2015 - 16:09 | 6376486 Radical Marijuana
Radical Marijuana's picture

I liked that article for at least breaching the subject, although that continued to stay way too superficial.

“Evolutionary economics” which uses concepts from biology rather than psychology to inform economic analysis.

It was not a coincidence that some biologists attempted to develop the term "negentropy" ( https://en.wikipedia.org/wiki/Negentropy ) to partially correct the ENORMOUS ERRORS introduced into the philosophy of science when an arbitrary minus sign was inserted into the entropy equations developed in thermodynamics and information theory.

Our society is almost totally dominated by the biggest bullies' bullshit world views. Those are built into our dominant natural languages, as well as into the philosophy of science that most people continue to take for granted. Ironically, that results in almost everything manifesting inside of a Wonderland Matrix Bizarro World, which is as absurdly backwards as it can possibly be. Here are some links and quotes to some possible material that touches upon some of the most important topics regarding the history of civilization developing successful warfare to be based on backing up deceits with destruction, that morphed to become successful finance based upon enforcing frauds:

Comparing the financial world to professional wrestling:

http://en.wikipedia.org/wiki/Kayfabe

In professional wrestling, kayfabe is the portrayal of staged events within the industry as "real" or "true," specifically the portrayal of competition, rivalries, and relationships between participants as being genuine and not of a staged or pre-determined nature. Kayfabe has also evolved to become a code word of sorts for maintaining this "reality" within the realm of the general public. Kayfabe was long held as a closely guarded secret within the professional wrestling industry; however, with the advent of the Internet, it has evolved into an open secret in the industry that is generally only adhered to during shows. ...

http://www.edge.org/response-detail/11783

Kayfabe

By Eric R. Weinstein

The sophisticated "scientific concept" with the greatest potential to enhance human understanding may be argued to come not from the halls of academe, but rather from the unlikely research environment of professional wrestling.

Evolutionary biologists Richard Alexander and Robert Trivers have recently emphasized that it is deception rather than information that often plays the decisive role in systems of selective pressures. Yet most of our thinking continues to treat deception as something of a perturbation on the exchange of pure information, leaving us unprepared to contemplate a world in which fakery may reliably crowd out the genuine. In particular, humanity's future selective pressures appear likely to remain tied to economic theory which currently uses as its central construct a market model based on assumptions of perfect information.

If we are to take selection more seriously within humans, we may fairly ask what rigorous system would be capable of tying together an altered reality of layered falsehoods in which absolutely nothing can be assumed to be as it appears. Such a system, in continuous development for more than a century, is known to exist and now supports an intricate multi-billion dollar business empire of pure hokum. It is known to wrestling's insiders as "Kayfabe".

Because professional wrestling is a simulated sport, all competitors who face each other in the ring are actually close collaborators who must form a closed system (called "a promotion") sealed against outsiders. With external competitors generally excluded, antagonists are chosen from within the promotion and their ritualized battles are largely negotiated, choreographed, and rehearsed at a significantly decreased risk of injury or death. With outcomes predetermined under Kayfabe, betrayal in wrestling comes not from engaging in unsportsmanlike conduct, but by the surprise appearance of actual sporting behavior. Such unwelcome sportsmanship which "breaks Kayfabe" is called "shooting" to distinguish it from the expected scripted deception called "working".

Were Kayfabe to become part of our toolkit for the twenty-first century, we would undoubtedly have an easier time understanding a world in which investigative journalism seems to have vanished and bitter corporate rivals cooperate on everything from joint ventures to lobbying efforts. Perhaps confusing battles between "freshwater" Chicago macro economists and Ivy league "Saltwater" theorists could be best understood as happening within a single "orthodox promotion" given that both groups suffered no injury from failing (equally) to predict the recent financial crisis. ...

What makes Kayfabe remarkable is that it gives us potentially the most complete example of the general process by which a wide class of important endeavors transition from failed reality to successful fakery. ...

Kayfabrication (the process of transition from reality towards Kayfabe) arises out of attempts to deliver a dependably engaging product for a mass audience while removing the unpredictable upheavals that imperil participants. As such Kayfabrication is a dependable feature of many of our most important systems which share the above two characteristics such as war, finance, love, politics and science.

Importantly, Kayfabe also seems to have discovered the limits of how much disbelief the human mind is capable of successfully suspending before fantasy and reality become fully conflated. Wrestling's system of lies has recently become so intricate that wrestlers have occasionally found themselves engaging in real life adultery following exactly behind the introduction of a fictitious adulterous plot twist in a Kayfabe back-story. Eventually, even Kayfabe itself became a victim of its own success as it grew to a level of deceit that could not be maintained when the wrestling world collided with outside regulators exercising oversight over major sporting events.

At the point Kayfabe was forced to own up to the fact that professional wrestling contained no sport whatsoever, it did more than avoid being regulated and taxed into oblivion. Wrestling discovered the unthinkable: its audience did not seem to require even a thin veneer of realism. Professional wrestling had come full circle to its honest origins by at last moving the responsibility for deception off of the shoulders of the performers and into the willing minds of the audience. ...

Indeed,

"It is deception rather than information that often plays the decisive role in systems of selective pressures."

Or, as Alexander Vladimirov put it: "All human history can be portrayed as the history of deception."

POLITICAL ECONOMY BECAME MOSTLY BASED ON KAYFABULATION.

However, again, that barely scratches the surface of the degree to which human beings have been driven by natural selection pressures to develop artificial selection systems whose social success depend upon the maximum possible deceits and frauds. Therefore, generally, it appears politically impossible for social pyramid civilizations to correct the degree to which they promote deliberately perceiving everything in the most absurdly backward ways possible.

While I completely agree that it is better to perceive the psychological within the context of the ecological, ironically, doing that takes suffering through far more cognitive dissonance that most people are willing and able to endure. In that context, I will repeat this quote from Cognitive Dissonance that has been previously published on Zero Hedge:

"The absolute best controlled opposition is
one that doesn't know they are controlled."

Almost everyone takes way too much for granted the natural language that they use to think with and communicate through. Similarly, almost everyone takes way too much for granted the presumptions that were built into the dominate philosophy of science. Generally speaking, those are as absurdly backward as they can possibly be, because of the degree to which societies were dominated by their biggest bullies promoting their bullshit world views. Since social pyramid systems were based upon small minorities using lies backed by violence to control larger majorities, which majorities adapted to that by becoming ignorant and afraid, for generation after generation, our sociopolitical institutions endeavour to keep most people ignorant and afraid, because those systems exploit their weaknesses, rather than attempt to assist them to overcome those weaknesses, which is mostly what the so-called psychological aspects to economics tend to actually do.

On the other hand, genuinely more evolutionary economics tends towards becoming more radical and revolutionary, since it necessarily must admit and address how and why we are living inside of social pyramid systems, based on the long history of backing up lies with violence, which gradually became more sophisticated systems of legalized lies, backed by legalized violence. Instead of progress in science being developed through creative synthesis with ancient mysticism, progress in physical science has mostly ended up serving the interests of an oxymoronic scientific dictatorship, which adamantly refuses to become more scientific about itself, since that would require doing things like admitting and addressing the ways that our entire political economy is based upon governments ENFORCING FRAUDS by privately controlled banks.

The part of that article republished above ended with "That’s evolutionary economics at its harshest but likely most real.  Eat, or be eaten." Well, eventually, everything eats everything else. The versions of "evolutionary economics" presented above barely crack the doors of perception regarding what the series of intellectual scientific revolutions that we should go through to develop a more genuine political science, since, at the present time, our political economy is almost totally dominated by its triumphant KAYFABULATIONS!

We may still have to face the facts regarding the biggest bullies' ability to still be bullies, but we may not have to continue to respect those bullies' bullshit. The degree to which the biggest bullies' bullshit world views dominates how we think and communicate is extremely difficult to gain proper perspective upon, since that tends to be so totally encompassing. Those were the deeper reasons for how and why virtually all of the content published on Zero Hedge, including the article above, is primarily presented by being still inside of the overall context that: "The absolute best controlled opposition is one that doesn't know they are controlled."

Fri, 07/31/2015 - 16:54 | 6376833 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

Thanks fro the negentropy link, RM. Always interested in Information Theory and laws of thermodynamics.

Fri, 07/31/2015 - 16:34 | 6376755 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

The USA is nowhere near surviving since the faux growth model of Ponzi Casino Capitalism imploded March 10th 2008, SUCKERS. Clearly, America is not the fittest survivor along the evolutionary scale of nations that can survive because America is already DEAD., DEFUNCT, and undergoing a Global autopsy with the blood draining out daily on cooked & fudged books from the municipal to the federal levels of government incompetence.

 

Survival of the fittest automatically excludes the DEAD Americans.

Fri, 07/31/2015 - 16:43 | 6376792 sirik
sirik's picture

It was Charles Darwin who applied the economic term "evolution" from Adam Smith in his masterpiece.

Acoording F.A. Hayek in one of his Lindau speeches.

So 'evolution' has economic root not biological one.

And not vica versa.

Genes and viruses, the builders of species, are operating is a free market environment.

Fri, 07/31/2015 - 17:37 | 6376948 GeezerGeek
GeezerGeek's picture

I can see evolution applied to economics just as I can see it applied to automobiles. Over time, numerous design changes made by many intelligent car designers has brought us from the Model T (or earlier) to the Ferrari 488 and Tesla Model S. (There were some non-so-intelligent designs, too, such as the gas tank in the Ford Pinto. Oh, well, to err is human...) Likewise, I can see lots of human decisions involved in the evolution of economics. (The Pinto equivalent in economics is probably Keynesianism.)

I've no clue what you meant by "genes and viruses, the builders of species...", but I do believe that certain constructs, like progressivism, are equivalent to viruses. They make the host sick and may even kill it.

Fri, 07/31/2015 - 17:33 | 6376933 dibiase
dibiase's picture

Nice concept.

Trump was in WWF if I recall right...

Fri, 07/31/2015 - 18:23 | 6377069 numapepi
numapepi's picture

I have maintained that economics should be viewed as an organic system rather than rule based. Capitalism, and by capitalism I mean lassiez faire, is at it's heart, a beating heart. It follows complexity theory's bouncing landscape far better than a mount Fuji landscape. Traditional economists use mount Fuji mathematics to "predict" outcomes but are seldom right. That is because the landscape is always changing, ala evolving markets.

http://incapp.org/blog/?p=1290

Fri, 07/31/2015 - 18:50 | 6377161 windcatcher
windcatcher's picture

All we need is more delusional idiots: economics is nothing more than the allocation and distribution of resources.

There! Is your fucking economics from a science point of view?

Take your pick: capitalism, fascism, communism, socialism, feudalism, etc.

Sat, 08/01/2015 - 14:23 | 6378998 J Jason Djfmam
J Jason Djfmam's picture

Amoeba, Fish, Lizard, Ape, Man, Investor, Amoeba.

Do NOT follow this link or you will be banned from the site!