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Economists have long been attracted to using biology to illustrate important lessons. Darwinian evolution is perhaps the most suitable analogy to how economic order emerges. The quote below my blog title above best illustrates another important lesson that is shared in both biology and economics. Here is another wonderful passage from Silent Spring (my emphasis added below):

Although the sudden death of thousands of fish or crustaceans in some stream or pond as the direct and visible effect of insect control is dramatic and alarming, these unseen and as yet largely unknown and unmeasurable effects of pesticides reaching estuaries indirectly in streams and rivers may in the end be more disastrous. The whole situation is beset with questions for which there are at present no satisfactory answers. We know that pesticides contained in runoff from farms and forests are now being carried to the sea in the waters of many and perhaps all of the major rivers. But we do not know the identity of all the chemicals or their total quantity, and we do not presently have any dependable tests for identifying them in highly diluted state once they have reached the sea. Although we know that the chemicals have almost certainly undergone change during the long period of transit, we do not know whether the altered chemical is more toxic than the original or less. Another almost unexplored area is the question of interactions between chemicals, a question that becomes especially urgent when they enter the marine environment where so many different minerals are subjected to mixing and transport. All of these questions urgently require the precise answers that only extensive research can provide, yet funds for such purposes are pitifully small.

The fisheries of fresh and salt water are a resource of great importance, involving the interests and the welfare of a very large number of people. That they are now seriously threatened by the chemicals entering our waters can no longer be doubted. If we would divert to constructive research even a small fraction of the money spent each year on the development of ever more toxic sprays, we could find ways to use less dangerous materials and to keep poisons out of our waterways. When will the public become sufficiently aware of the facts to demand such action?

I only ask this. If it is so apparent in the natural world to be keen to the unseen effects of human actions on a delicately balanced system, then why is it almost universally not understood by many of these same people that the same idea applies in our economic order? Of course, more research is not going to change things in economics, the counterfactual problem is intractable in many situations. For example, I will never be able to show you the business that does not get started because of some rule or regulation or prohibition or license or whatever else might have discouraged an entrepreneur from taking a risk. I am tempted to blame economists for not making these kinds of connections with folks that are scientifically aligned, but that’s just not right. Many good economists have been making such connections for years and I see no more ┬ámeaningful appreciation for the complex order of human society today than I did 20 years ago.

UPDATE: later in the book this terrific passage is found:

We are accustomed to look for the gross and immediate effect and to ignore all else. Unless this appears promptly and in such obvious form that it cannot be ignored, we deny the existence of hazard. Even research men suffer from the handicap of inadequate methods of detecting the beginnings of injury. The lack of sufficiently delicate methods to detect injury before symptoms appear is one of the great unsolved problems in medicine.

3 Responses to “Consistency Among Biological Bastiats”

  1. “If it is so apparent in the natural world to be keen to the unseen effects of human actions on a delicately balanced system, then why is it almost universally not understood by many of these same people that the same idea applies in our economic order?”

    Ignoring the problem that “… many of these same people…” is an unnamed collective, allow me to suggest that some of them worship nature and hate humanity. Some may fall into the pretense of knowledge, understanding their limitations in ecology (study of the house), but not in economics (management of the house), which seems ironic.

    Compartmentalization allows them (and us) to apply different standards and methods to various engagements. (And that might be best, as a famous Garfinkel experiment was to treat your family as if you were a guest in a fine hotel.)

    Lack of experience with the problem is another reason. As they say, we have no way to measure some of these posited effects. We do think we have ways to measure our incomes and expenses. Again, that pretense stares back at us, as filling out my checkbook ledger is far from predicting next year’s aggregate demand.

    I like the label “biological Bastiat.” I will report here the first time I try it out in a discussion.

  2. jb says:

    I might add that critics of classical-liberal economics are all too happy to embrace the “nature” analogy when attacking free makets, but they get it wrong. How many times have your heard capitalism described as “Darwinian” (pejoritavely)? This is entirely off base of course; in nature resources are frequently depleted, ulimatley to extinction. But with markets, if property rights are complete and prices left alone to reflect relative scarcity, there is no reason to think anything will be used up. Alas, in nature there is nothing akin to the price mechanism that serves to conserve resources.
    Make that argument and watch a greenie turn red with rage.

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