Economic Biology and Behavioral Economics

Description

Economic Biology and Behavioral Economics: The Prophesy of Alfred Marshall explores the prophesy of Alfred Marshall, the grand synthesizer of neoclassical economics, that the "Mecca of the economist lies in economic biology". The book presents the proof of that prophesy through examination and establishment of the fundamental biological science necessary and then applying that science to the examination of current economic theory. In doing so, the book focuses primarily on the fundamentals of neoclassical economic theory― which is the reigning theory and the general framework of which is taught as "science" in first courses in college economics. These courses are at best an idealization, if not an ideology, of the discipline―presented to fresh minds misleadingly as confirmed science. The book examines the bases and the history of these idealizations, points to the sources of their error from the biological perspective and suggests a path forward for the discipline. Through this process, the book demonstrates the power of the biological perspective anticipated by Marshall. This book provides invaluable reading for anyone interested in the future of economics and economic theory, and particularly those interested in behavioral economics and neuroeconomics. Cover Half Title Series Information Title Page Copyright Page Table of Contents 1 Introduction Part I The Biological Fundamentals 2 Foundations: Evolutionary Brain Science in the 21st Century Along Came Marshall Biology as “Mecca” of Economics Metaphors vs. Linkages Marshall as Synthesizer Not Innovator Background: The Three-Phased Evolutionary Transition to Humanity So What Are Amniotes? So Who Are Amniotes? Back to Framework: The First Phase: Self-Survival The Point of Divergence: Last Common Ancestor of Mammals, Reptiles, Birds For Human Brain Evolution: Follow the Synapsid Line Point of Divergence Ends the First Transitional Phase: Cold-Blooded Self-Survival Is the Key The Second Phase: Evolution of Parental Care, Social Bonding The Third Phase: Evolution of Higher Primates and Homo Sapiens Paul MacLean and Ann Butler Paul MacLean: The Triune Brain Concept The Mismeasure of MacLean’s Triune Brain Modular Concept Faulty Reviews in Key Journals A Resurgence of Interest The Interconnected Three-Phase Human Brain Current Thinking On the Timing of the Point of Divergence MacLean’s Phases Two and Three The Evolution of Interconnected Triality Genes and Continuity Early Amniote Structure Master Routines of Life Support Early Mammals Warm-Bloodedness, Parental Care, Play and Social Bonding The Neocortex and Greater Complexity of Behavior Butler and the Three-Phased Transition As a Motivated Response: A Replacement Generalization Of Profound Importance for Consilience An Objective Terminology An Evolutionarily Accurate Model Therian Formation Stem Mammalian Formation Common Amniote Formation Or A-Complex A Welcome “Replacement Generalization” Cautionary Pitfalls No Ancestral Dragons No Scala Naturae Or Great Chain of Being The Rise of Epigenetics: Avoiding Simple-Minded Genetic Determinism Some Special Characteristics to Keep in Mind A Final Important Thought The Concept of Niche My Goal in This Book Refining and Defining Human Uniqueness The Self-Preserving and Affectional Programmed Circuitry Of Snakes, Geckos, and Sharks Of Caring and Playful Mammals Our Evolved Networked Brain and Behavioral Conflict Energized, Global-State Circuits Conflict External and Internal The Rise of Behavioral Tension The Blessing of Tension and Stress Conflict: A Mitigated Curse Behavioral Tension/Stress an Internal Emotional Compass 3 Our Mammalian Heritage: A Dual Motive Neurobehavioral Model The Human Brain: A Physiological Organ The Social Nature of the Brain The Social Brain: An Organizing Concept Hunting, Gathering, and Sharing On Choices and Meaning Executive Circuitry and Language Higher Cognitive Integration: Self- and Other-Interest CSN Complex vs. CSN Model: Physiology vs. Function The CSN Model as a Functional Representation of Physiological Circuits The Functional Approach May Avoid Future Minor Technical Disagreements Lateralization vs. Integration Executive Circuitry and Neural Networks Interconnected Neural Networks Subjectively Drive Objective, Observable Behavior The Gating of Dual Motives Psychosurgery as Clear Evidence for Dual Motive Theory Ego and Empathy Clarified The Electrochemical Physiology of Dual Motives The Major Ranges of Reciprocal, Conflict Behavior The Source of All Motives The Egoistic Range The Empathetic Range The Dynamic Balance Range Energy Or Activation Level Escalation and De-Escalation 4 The Dynamic Algorithms of Social Behavior Algorithmic Origins A Gift From Persia Formal Procedures for Solving Math Problems Extended Applications Algorithm: A Flexible Term Taming Variable Processes The Algorithmic Neural Dynamic The First Rule Describes the Egoistic Range In the Behavior of Children In the Behavior of “Grownups” The Second Rule Describes the Empathetic Range On the Other Side of the Scale “Thank You” as Payback There Is No Free Behavioral Gift Goodness, Gift-Giving and Reciprocity E. O. Wilson Plus Sapolsky vs. Ghiselin The Third Rule Statement: The Range of Dynamic Balance Between Our Contending Motives Reciprocity Through Conflict The Scale of Inclusiveness The Family Connection Present-Day Mismatch and the Importance of Socialization and Education Our Sense of the Mismatch Predictability and the CSN Model 5 The Physiology of Social Behavior The Biological Inspiration Bernard and Cannon the Discovery of Homeostasis Homeostasis as the Foundation of All Modern Physiology Examples of Homeostasis Homeostasis, Cybernetics, and Information Theory Computers, Software, Information Control Systems: Manmade Analogs of Ourselves Essentials of Homeostatic Systems Homeostasis of the Social Architecture Absolutely, We Can Behavioral Tension: Generic Regulator of Our Social Architecture Homeostatic Variability, Neural Plasticity, and Learning Executive Brain Centers: Considerable Control, But Not Absolute But Variability Has Its Limits Human Social Life: A Resounding Homeostatic Success In Spite of Media Emphasis On Violence We Mostly Cooperate Is the Human Species a Suicidal Success? 6 The Organic, Homeostatic Equation of Our Neural Architecture The Third Form of the Neural Dynamic Math Represents Reality Symbolically BT as a Function of Magnitude An Organic Equation Zero Equals Death Divergence to Extremes Due Warning of Survival Danger Optimal Function: A Measure of Health and Happiness A Historical Note On Mathematics in Social Sciences What Say Had to Say Cournot and Walras On Math Elaboration of Form and Structure The Neural Social Equation: Some Differences The Equation and Complexity Theory Thermodynamic Equilibrium as Organic Death In the CSN Model Death Or Zero At Or Below Extremes of Ego Or Empathy Simple, But Powerful 7 Physics vs. Social Science: Some Differences Organic Algorithms Are Variable Organic Evolution Inherently Variable Marshall and Economic Laws as Tendencies Newmarch: Statistics Has No Laws Comparable to Physics Sources of Probability and the CSN Model We Take Our Compatibility for Granted Development and Learning Interact With Our Genes Physics, Genes, and Behavior Precision vs. Statistical Probability The Behavioral Wave Function Simularities With Quantum Physics Part II Biological Linkages to the Discipline of Economics 8 Family, Gift, and Market Reciprocity: The Ubiquitous Norm An Extensive, Still Growing Literature A Long Suspected Biological Origin Mixed Evolutionary Thought On Reciprocity The Evolution of the Market The Family Or Group Bond Social Dynamic Effects and Diffuse Reciprocity Thank You and You’re Welcome Courtesy Mitigates Behavioral Tension The Gift Path-breaking Study of Marcel Mauss Pervasive Reciprocity Expresses Neural Dynamic The Compelling Force as Our Neural Dynamic Economic and Political Consequences of Gift-Giving Further Confirmation: Exchange Central to All Known Human Societies Expanded Literature On Gift-Giving Derrida: The Impossibility of the Pure Gift Confirms Essence of Our Social Brain From Gift to Transaction Defining the Contrast Between Gift and Transaction Universalization of the Scale of Inclusiveness and Moral Ambivalence: Gifts That Corrupt Gift as Bribes Hastings and Others of Bribes and Scandal Corruption: A Concern of All Nations Back to the Gift and Transaction The Transaction Avoids the Behavioral Tension of Obligation Reciprocal Specified/Quantified in the Transaction Behavioral Tension Yet Drives the Transaction 9 Adam Smith and the Market No Market Based On Laws of Physics We Falsely Blamed Adam Smith The Misinterpretation of Smith’s Motives With Smith Everyone Wins The Further Evidence: The Theory of Moral Sentiments The Roots of Misinterpretation Negative Side Effects Empathy in the Marketplace Emphasis On Customer Service Features vs. Benefits Empathy and the Art of Selling Rational Fools the Trick Or Deception of Self-Interest 10 The Invisible Hand as a Neural Algorithm The Ubiquitous Hand Fable of the Bees and Unintended Consequences Smith Follows Locke Seeking a Better Balance From Whither the Hand Human Nature By the Hand of the Deity Smith’s Dual-Motive Hand Greater Wealth and a Better Distribution A Handy Dynamic Demand and Provisioning Demand and Supply: Expressions of the Social Brain The Gift Economy Vs the Market Economy The Gift Economy as a Total Social System The Gift Economy as Based On a Feminine Perspective The Evolutionary Sequence From Gift to Exchange From Gift to Exchange as a Continuum From Gift Economy to Transaction Economy Changes in the Manner of Social Exchange The Invisible Hand in the Structure and Behavior of the Marketplace Structure Behavior From Egalitarian Gift to Hierarchical Exchange The Extension of the Scale of Inclusiveness and the Universalization of Dual-Motive Values 11 General Equilibrium Theory: From Newtonian Physics to Organic Dynamics The Unsuccessful Effort to Find Physical Laws GET: Off On the Wrong Foot Léon Walras and the Full Establishment of GET Distortions of Physics and Plato Utility Theory of Value Axiomatization and the Top-Down Formalization of GET Quantum Uncertainty Becomes Economic Uncertainty Debreu and Arrow Existence, But No Uniqueness Or Stability GET to the Future: The Assisted Free Enterprise Of Dreams, Faith, Utopia, and Alice in Wonderland The Absentee God’s Model vs. Intelligent Design In the Final Analysis: Pragmaticism and Intelligent Assist From Nearly Full Circle: The Return to Morality 12 The Social Brain and the Idealized Version of Price Theory The Neoclassical Approach: The Schizophrenic Duality of the Market The Demand Curve The Supply Curve Market Equilibrium Dynamic Balance: Pinned and Pegged The Expanded Social Equation The Homeostatic Equation and the “Haggle” Range The Homeostatic, Self-Correcting Market Dynamic Price Theory: An Expression of the Social Brain A Bonus: Price Becomes an Endogenous Variable Tâtonnement, Groping, and the Auctioneer Enter the Social Equation Behavioral Tension: Motivating Price Change 13 Calculus and Neural Algorithms in Price Theory Some Calculus in Price Theory 14 Further Application of the Basic Homeostatic Equation to Economics Demonstration: Unit Change Above/Below Equilibrium Price The Constant Case The Elaborated Equation As a Function The Nonconstant Case Interim Summary Differences in Representing the Organic, Homeostatic Equation Extended Application of the Organic Equation Importance of a Metric for Socio-Behavioral Tension/Stress Summary Confirmation That Social Neural Dynamic Shapes the Exchange Process 15 Self-Interest and the Fallacy of Self-Reference First Principle Or Faulty Ideology Granite Is Not a Jewel a Foundation of Clay? The Enshrinement of Ideology Defense in the Face of the Challenge of Change Naïve and Native Skepticism: I See It But It’s Impossible! Territorial Defense and Homo Economicus From Defense to Academic Imperialism In Face of the Evidence The Grudging Acknowledgment By Slight-Of-Hand Self-Interest Via Self-Reference The Fundamental Fallacy Fallacy Revealed Empathy as a Preference Or Taste: The Distortions That Follow A Personal Anecdote In the Face of Economic Crises: Some Questions 16 Hayek: Wishful Thinking and a Not So Spontaneous Order A Man of His Time Spontaneous Order vs. the Invisible Hand Moral Instincts: Impediments to the Market System Moral Instincts: As Primitive Necessity Self-interest as Market Rule of Conduct Conscious Pursuit of Social Justice: As Destructive Mirage Implicit Empathy: Law and the Rules of Civil Society A Not So Spontaneous Order Hopefulness and Wishful Thinking Resolving the Hayekian Conflict Market Structure and Market Competition Structural Empathy and Behavioral Empathy Creativity, Innovation, and the Free Enterprise Market Creativity Creative Destruction and Innovation: Whither Go’ist? Creative Destruction, Sustainability, and Inequality Pragmatism vs. Ideology: Responding to Market Failure 17 Nash: Modeling Equilibrium With Beautiful Minds, Beautiful Equations A Dose of Mystique and Weirdness Dangling in Space The Mystique of Mathematics Representation vs. Reality The Platonic Romance Dancing Among Arbitrary Discriminations Mathematical Mystique and the Social Sciences Appeal of the Nash Equilibrium Pre-gravity and the Nash Equilibrium The Clues in the Conditions, Assumptions, and Axioms The Social Equation as the Causal Dynamic Empathy as Implicit in the Nash Equilibrium Empathy: A Foundational, But Unclarified Assumption Noncooperative vs. Cooperative Games: Implicit vs. Explicit Empathy Noncooperative Games Cooperative Games The Name of the Game: Accommodating Self-Interest and Empathy Further Examples The Shortfalls of the Game Model: Inherent Blindness to Social Dangers Shortfalls Or Limitations Blindness to Dangers Practical Wisdom vs. Obfuscation Subjectivity in the Guise of Formality The Utility of Modeling Part III The Wider Context 18 The Emergence and Promise of Neuroeconomics Neuroeconomics and Consilience The Challenge and Promise of Neuroeconomics A Noteworthy Exception 19 The Larger Context: The Stiff Upper Lip, Original Sin, and Western Science The “Silo” Effect of Departmented Academia The Wider Context The Judeo-Christian Tradition: Cosmic Good and Evil Plus Original Sin The Enlightenment: Is Human Nature Good Or Evil? Human Nature as Evil Human Nature With Good Moral Sense Charles Darwin: Survival, Self-Interest, and Altruism The Misinterpretation of Darwin Reinforcing Hobbes: The Rise of Social Darwinism The Making of “Scientific” Economics The Moral Beginning The Move to Newton: Economics and the Emergence of “Physics Envy” The Emergence of “Scientific” Amoral Economics The Marriage of Induction and Deduction in Economics Induction and Statistics Deduction: The Jevonsian Utilitarian Approach vs. the Cartesian/Walrasian Approach of GET Jevons: The Conscious Choice to Ignore Morals in Favor of Baser Self-Interest Effects and Aftereffects: A Historical Observation The All-Inclusive, Hedonic Approach: Obstructing the Interplay of Ego and Empathy The Hobbesian Victory Over Smithian Morality a Subjective, Nonscientific Choice The Ultimate Denial: Fallacy in the Making The Choice to Ignore Half of Human Nature: Cracks in the Foundation The Epicyclic Patchwork The Negative Social Side Effects Logical Positivism and Radical Behaviorism Stiff Upper Lips and Original Sin The Selfish Gene: Original Sin in Biology Stiff-Upper-Lippers Or Autistic Savants? Selfish Genes and Bloody Teeth Redeemability and Dilemma The Dawkinsian Fallacy The Phenotypic Power of the Mammalian Architecture and Behavior 20 Evolutionary Neuroethology and Inclusive Fitness The Cold World of Computer Mechanism: Humans as Information Processors Ethology: The Study of Animal Behavior Evolutionary Biology to Evolutionary Psychology Evolutionary Psychology, Behaviorism, and the Black Box of the Human Brain Evolutionary Neuroethology Inclusive Fitness: The Genetic Reconciliation Hamilton’s Rule The Essential Mechanisms Unspecified Empathy Improves Survival Odds of Self Plus Others Inclusively From Inclusive Social Architecture to Love of All Via Education and Socialization 21 Social Exchange and the Structure of Society The Social Brain Equation as a Metric of Socio-Behavioral Tension and Inequality Social Stratification Stratification as Structured Behavioral Tension Between Dugger and Hayek: Where Most of Us Belong What Any Fool Knows Has Evaded Scientific Explanation Social Context vs. Ideal Definition Self-Corrective Tendency vs. Social Stratification Evolution of the Fundamental Homeostatic Logic of Equality Larger Groups, the Division of Labor, and the Emergence of the Scale of Inclusiveness The Necessity for Rationale: From Ideology to Coercion to Force Socio-political Participation and the Pressures for Equality The Instability of Social Stratification Among Primates and Humans The Emergence of Social Competition, Alliances and Hierarchy Conflict Resolution and the Instability of Hierarchy Society as an Overarching Social Exchange System Of Power and Economic Functions: From Primitive Family to Modern State The Market Or Economic Exchange System The Politico-Legal Exchange System Countering Market System Failures Balancing Out the Social Brain Equation Social Demand vs. Economic Demand Complementing and Balancing the Market Exchange System Fulfilling the Charter of the Primitive Family With Caution Graphing and Grasping the Challenge Social Demand and Excess Price Market Standard for Non-Necessities? Social Standard for Necessities? The Predictions of the Social Dynamic Necessary Conditions A Major Challenge of a Free Society: Preventing Undue Interference Or Obstruction Incentives, Productivity, and Behavioral Tension The Practical Question 22 Conclusion But That’s Not All References Index