WHILE pursuing our theme of evolution vs creationism (and Intelligent Design), we wrote about Adam Smith’s Invisible Hand and Charles Darwin’s Natural Selection.
Our thinking has evolved a bit, and we shall now discuss President Obama’s “stimulus package” as a form of Intelligent Design, compared to Silicon Valley as a form of evolution. We know … you’re wondering if your Curmudgeon has lost it. But bear with us, because we think we have something worth saying, and it fits in with everything else we’ve been saying.
Silicon Valley has become a metaphor — actually a metonym — not only for the high-tech businesses in that area, but generally for the high-tech sector of the economy throughout the United States. Depending on definitions, it’s a mix of industries — hardware, software, the internet, etc., that probably accounts for at least 10% of the US gross domestic product and employment. This industry began, evolved, and flourished in a rich environment of pre-existing, readily available research, much of it from Defense Department and NASA contractors, resulting from the Cold War and the Space Race.
Aside from government sponsored research — much of which is being severely curtailed these days — what conditions enabled Silicon Valley to flourish in the 1980s and ’90s? What was the government’s “stimulus package” that made Silicon Valley possible?
We suggest that Silicon Valley emerged in the complete absence of any stimulus package. Indeed, it probably emerged because there was no such package. Silicon Valley’s nurturing environment was a mix of entrepreneurial activity, venture capital financing, and an unregulated market.
What we now know as Silicon Valley emerged without centralized planning — there was no “intelligent designer.” There were no government programs, no special incentives, no job retraining bureaucracies, and no hiring subsidies. Let’s not overlook the fact that taxes were low. There was nothing remotely resembling today’s government-directed initiatives intended to move us to “green” automobiles, clean energy, etc. Silicon Valley literally emerged while the government wasn’t paying any attention, and we think it’s largely because they weren’t paying attention.
At the start of the micro-computer industry, most young men didn’t type (except for military clerks). Typing was girls’ work! But young men somehow managed to ignore the stereotypes and they learned how to type — without the help of any government stimulus.
Was other training needed? Sure, lots of it. Computer stores offered classes to their customers; it was good for business. Computer user-groups blossomed all over the country. Magazines were launched, informing their readers of tips, techniques, industry developments, etc. And although some today might think it impossible, all of that “just happened” as a result of thousands of profit-seeking entrepreneurs and millions of consumers, doing what seemed best at the time. There was no far-seeing government bureaucracy supervising all this activity; nor was there a Computer Czar appointed by the White House.
Free enterprise has its dark side, but there were no bailouts for Visicalc and Word Star when they started to fade. Software got written, marketed, flourished for a while, and was superseded by other software. Customers moved on, and so did employees and entrepreneurs. Venture capital followed winners. The consumer lived in a perpetual paradise of seemingly never-ending innovations.
Okay. We think we’ve made our case for Silicon Valley as an economic analog for undirected biological evolution. Now let us turn to current events and ask what we think is a crucial question:
What is there in President Obama’s stimulus package and his other economic proposals that has anything in common with any of the factors that gave us Silicon Valley?
We leave the answer as an exercise for you, dear reader. And while we’re at it, we’ll leave you with one additional question:
We know that it’s possible — albeit sometimes challenging — to be both science-minded and religious. But is it also possible to embrace the theory of evolution and Obama’s economic policies at the same time? Think about it.
Copyright © 2009. The Sensuous Curmudgeon. All rights reserved.
Marxism, in and of itself, does not preclude support for science and evolution, but it sure does prevent any good science from being performed.
The USSR did some reasonable Physics, although their Biology was a disaster.
Long Live Lysenko.
MF says: “Marxism, in and of itself, does not preclude support for science and evolution …”
We’re approaching this from opposite directions. I suppose a tyrant can support whatever he likes. I’m asking if an evolutionary biologist can support central economic planning.
My basic position is that science can potentially exist in almost any political environment as long as the pols keep their hands off.
However, practically speaking, science will best thrive in a free economic environment.
Curmy, I presume you are looking at the larger picture — not just what Obama’s policies will mean for science, but rather how the entire economy will respond to his central planning.
I think your analogy is apt, even brilliant. If the computer revolution had been government-planned, a computer with the power of this one- year-old laptop would cost over $1 million and would be the size of a Hummer, if not even larger. I fear that the government trying to design an economic recovery will be about as effective. Especially this administration, given Obama’s stated anti-corporate position.
Far better would have been a simple plan to dramatically cut corporate income taxes. The effect would have been immediate. Money would have flooded into the market from all parts of the world, companies would have expanded, dividends increased, more people would be working or making more money, thus paying more individual income taxes, and the money that the government would have lost in the initial tax reduction would have been more than recouped.
It’s not too late for this to happen, but I sure will not be holding my breath. Even if Obama had the courage to do it, Congress doesn’t.
However, if Obama could be persuaded to do it, he would definitely become a hero, although the Left would feel that he had become a traitor.
retiredsciguy says: “Curmy, I presume you are looking at the larger picture — not just what Obama’s policies will mean for science, but rather how the entire economy will respond to his central planning.”
Give that man a cee-gar!
It’s a great and thought-provoking line of reasoning, Curmy; why didn’t Bobby Jindal make this kind of argument? No, wait…ok, no need to answer that one.
But I’d quibble just a tad. I’m no fan of the ‘stimulus package’, and I don’t see how any rational human being can deny the utter disaster that inevitably results from ‘command economies.’ That said, though, it’s hard to make a compelling case for pure laissez-faire, if only because the political cost is deemed too high (whether rightly or wrongly is debatable).
In the terms you’ve presented here, one could perhaps similarly argue that our species arose through pure laissez-faire evolution, so we shouldn’t practise medical arts but let nature its course and eliminate hereditary diseases from the gene pool. But no one seriously argues that.
Alternatives to the ‘stimulus package’ are certainly a worthy pursuit; I’d like to see some real numbers put to retiredsciguy’s model, it looks promising.
Great Claw says: “Alternatives to the ’stimulus package’ are certainly a worthy pursuit …”
How about this? First, clean up all the junk mortgages that nearly sunk the banking system. Let the feds buy them, thus restoring the banks to solvency. And change the laws so such frivolous loans won’t be made again. The feds can then hold that junk for as long as it takes to resolve the mess, but no subsidies for the parasites who borrowed money they can’t repay. Foreclosure is the only remedy, and the treasury will absorb the losses. Tough luck. That fixes the banks. As for “stimulus,” significant tax cuts have been proven to work — speedily. That’s all we need. Thus sayeth the Curmudgeon.
Retired, if you think a corporation is holding a huge amount of junk mortgage bonds, are you going to rush out and buy more of their stock simply because their tax rate went from 15% to 8%? I wouldn’t. I don’ think the public will either.
Lowering corporate taxes will not restore confidence. It makes a bad stock cheaper, not better.
Curmy, why would an evolutionary biologist apply evolutionary principles to something other than biology, and why do you believe a biologist would have a problem with an economy that does not follow natural selection?
You are conflating ‘is’ with ‘should’.
We know selection works with biology, do we know that selection is the only method of approaching an economy?
And unless you are broadening the definition of Marxism to include everything to the left of your ideology, it is inappropriate to claim a stimulus package is Marxist. There is a difference between pragmatic centrism, socialism and communism.
Please, don’t play the false dichotomy card.
Tundra Boy says: “… it is inappropriate to claim a stimulus package is Marxist.”
But I didn’t make that claim. All I did was detail the factors that enabled Silicon Valley to flourish — no issue there, I assume. And then I suggested that those factors are not present in Obama’s stimulus package. That’s not arguable either. The analogy to unguided evolution versus intelligent design is optional, and it’s debatable, but I think it’s a very good analogy.
Curmudgeon, you may be hoist by your own analogy here. b_sharp’s point is that evolutionary solutions, even when they are tough and strong, are not always desired by society. He’s right about that.
The domestic dog is a product of intelligent design, the wolf a product of parallel natural selection. Now, the wolf may be better than a dog for a lot of tasks. It may be tougher and better able to survive in the wild. But human society finds the dog more useful.
Now if you’re going to argue about unguided natural economies vs. designed economies, you’re got to deal with the same problem: just because an unguided one may be tough and powerful and good for a lot of tasks, doesn’t mean its better for specific tasks faced by society, or that it is preferred even when it is better. Because even if its better at the moment, it might turn around and eat your kids. (Metaphorically of course)
“Retired, if you think a corporation is holding a huge amount of junk mortgage bonds, are you going to rush out and buy more of their stock simply because their tax rate went from 15% to 8%? I wouldn’t. I don’ think the public will either.”
Nor would I. Fortunately, only a tiny percent of the larger corporations are holding junk mortgage assets. I’m thinking of how a tax cut would be a major stimulus to get people buying the P&Gs, Johnson & Johnsons, etc. Once investors see the market going up again, it should trigger a huge buying event centered on high-quality stocks. Right now, EVERYTHING is down, regardless of quality.
I think it’s worth a shot. The government does not derive much of its income from corporate income taxes anyway, and as I noted above, the expected growth in the economy should more than compensate.
In my response to Eric, I forgot to mention — I believe the corporate rate is 35%, not 15%. I might be off on that, but it is one of the industrialized world’s highest rates nonetheless.
Thank you Eric.
Evolution via natural selection has a lot of applications when applied to other fields.
In simple form, free market economics as opposed to government controlled markets is evolution in action. Individual businesses rise and fall on their own merits and good investments can pay off big. Likewise altruism and group vs individual priorities require that these businesses would want some rules and insurances to make the market more stable. Sure one state might have unions and another doesn’t, but that just means populations can vote with their feet.
As for the bail-out package, I prefer Khan Academy’s idea of taking the money and using it to seed entirely new banks that can immediately make loans and have no poison assets. The Tax-payers become the share-holders and it becomes immediately privatized while the old banks are left to survive on their own merits +1 bail-out.
They never get it, do they?
Variation can be “undirected” and even random; but evolution is directed by the filter of natural selection.
Longie says: “They never get it, do they?”
Just because an idea is simple, elegant, and clearly explains the data, you think everyone will get it?
AFAIK its like the personal income tax rates; corporate income tax rates vary, with higher tax rates at higher gross income. Of course the amounts are several orders of magnitude different 🙂
Okay look, your entire plan depends on people acting as rational investors. Lower the tax rate, and investors will understand that this will lead to higher corporate profits and invest more.
But you’ve just told me that you don’t think they are entirely rational – you think that the whole stock market dropped because of the failure of a few percent of businesses on it. You think, for instance, that people are not investing in Johnson & Johnson even though there’s no problem with it, because of irrational fear.
So I think its fair to ask – what makes you think that lowering the corporate tax rate will suddenly make individual investors behave more rationally?
Moreover you may want to consider the competitve nature of business. Suddenly decrease the taxes of Delta AND American airlines AND their competitors, and guess what? They don’t sock more away for a rainy day. Nope – they drop their prices in order to win market share, until every airline is (once again) operating at a razor thin margin that is tactically necessary but strategically unstable. No long term stability has been gained. Because lowering all taxes simultaneously won’t change relative profit margins, it likely won’t lead to changes in business strategies, which is what we, the consumers, really need.
airtightnoodle says: “Thought-provoking.”
That’s what the Inquisition said to Galileo.
Ha! I meant it as a compliment.