Robert H. Frank, an economics professor at Cornell, compares Adam Smith’s ideas to Darwin’s and concludes that free markets may not be the cure-alls conservatives make them out to be.
Darwin’s understanding of competition makes clear that there can be no presumption that the process promotes the common good. Often it does. But success in Darwinian terms typically depends heavily on relative performance, and attempts to occupy scarce slots atop any hierarchy inevitably provoke wasteful, mutually offsetting arms races.
It’s an important point, since the modern conservative’s case for minimal government rests on the presumption that competition always promotes society’s welfare. But our best understanding of how competition actually functions, as Darwin’s work makes clear, supports no such presumption.
So lambs really don’t lie down with lions! I think I knew that. . . I don’t recall many free-market enthusiasts arguing that competition always promotes society’s welfare overall. How could anyone think that? Free-markert competition has produced, among other things, Kool menthols and pet rocks. All Smith (and Darwin) believed is that competition provides for the most efficient allocation of resources. Which is not nothing. If we had more energy-related investment going on in a highly competitive private energy sector and fewer Solyndras, we’d have more money to invest in social programs (both public and private) that Frank is presumably so enamored of. . . .