Do most people hold economic views best suited to a primitive society?

http://mises.org/daily/4700





The article I linked to uses evolutionary psychology to explain the widespread economic ignorance in our present society.





Doesn't it seem like the economic views that people hold before they learn how the economy actually works are based on what was best suited to a primitive hunter-gatherer society (consider that people who are ignorant of economics do not have a random bias, but rather tend to have the same false economic views)? In such a society, the amount of wealth truly was static and economics was truly a zero-sum game. Exchanges in that society were reciprocal and were not market exchanges.





Income inequality in a primitive society impoverishes most of the people. Thus, people have evolved a dislike of the wealthy.





The fact that exchanges were reciprocal explains why many people believe that things have an objective value. Thus, they hate middlemen and oppose a free market in anything relating to the poor.





People also have a bias toward intentions rather than results, toward smaller producers rather than big, faceless, corporations, and against foreigners. These made sense in a primitive society, but in the modern world, they are all disastrous (especially the anti-foreign bias, which manifests itself in the popularity of protectionism, immigration restrictions, and warmongering).





Because of our bias toward individuals, people fall victim to the fallacy of what is seen and what is not seen (that is, they ignore the economic harm caused by, for example, bailing out inefficient farmers, while seeing the benefits). We also have a bias towards loss aversion (to place more weight on losses than gains), which makes people oppose a drop in nominal wages even if their real wages are increasing (which is why we ended up with inflation rather than deflation starting around the turn of the 20th century) and why special interest groups make it so much more difficult to repeal bad legislation than it is to pass bad legislation in the first place.





Obviously, since there are people who understand economics, that shows that these biases can be overcome. We aren't doomed to be victims of economic fallacies. Can we overcome our evolved misunderstandings of economics by recognizing the importance of persistent economic education for every new generation (just as we educate every new generation in reading, writing, and math)?|||1. Most people haven't the foggiest idea of the economics suitable for a "primitive" society. Hunter-gatherer economics are very subtle. There are some very interesting anthropology papers on the subject.





2. I have yet to find an article on mises.org that I agree with. This seems to be no exception.





3. In terms of per capita manufacturing, innovation, etc. Germany is far ahead of everyone. Yet Germany attributes it manufacturing prowess to the small and middle-sized corporations, not the behemoths you seem to feel essential to modern society.


http://www.german-way.com/biz.html





4. Economics is only one element of society. What use is a booming economy if it causes the society to fall to pieces? What you may think of as anti-economics biases may actually be pro-social survival.





One thing we do know is that the current economic system is not sustainable.


http://dieoff.org/page110.htm


http://en.wikipedia.org/wiki/Sustainabil鈥?/a>





Therefore it is NOT good for society as a whole, but is a short term trap we've gotten ourselves into.





5. Your comments about income inequality show a clear ignorance of the facts. Why should people support an economic system that improves the lives of the rich but not of their own? Especially when it is clear that the reason is not economics but politics:


http://rodrik.typepad.com/dani_rodriks_w鈥?/a>


www.russellsage.org/publications/worki鈥?br>




http://www.nytimes.com/2002/10/20/magazi鈥?/a>





and the fact that other developed economies (Sweden, Norway, Germany, etc.) have much lower income inequality than does the U.S. proves it is not necessary for economic development:


http://en.wikipedia.org/wiki/List_of_cou鈥?/a>





6. Results are a terrible criterion to use. All actions have risks. Does the fact that you bought a lottery ticket and happened to win mean buying lottery tickets is a good idea? Does the fact that you happened to get killed just after finishing school mean spending your time in school was a bad investment?





Rational people look at expected value: giving each of the possible results a weight based on its value and its likelihood.





7. I agree that better economic education is important. But maybe you should start at home?|||Yeah, many things in modern society are in conflict with evolutionary instincts.


Monogamous marriage is one example that you did not mention.





Educating people in economics would be nice, but it will take a while and many will have hard time understanding it, so it is better to just teach people to respect laws.|||It is just a matter of time before people catch up. Economists, in general, have been ahead of the curve. I too thought economics was "dismal" and disagreed heavily against many economic concepts (and still disagree on certain aspects) but after studying economics I cannot advocate any other subject that is under-taught and under-appreciated.


There is always friction to progress.


How long did it take to convince humanity that the earth was round and that it revolved around sun?


Yes, we can and have evolved. Look at where were are now compared to 100 years ago. We are way better of (well, maybe so Hayekian's will disagree.)








A few responses to "simplicitus" answers, though not necessarily wrong (since they are opinions), needs to be addressed. In doing this, I also welcome anyone to critique what follows:





I agree that current economic models that is widely used does not account for externalities such as pollution, deforestation, and so on - But some economists are working on that (aka Jeffrey Sachs). Old economic did not factor in environmental effects, but neither did most of the population. It is also hard to valuate the cost "pollution" into a simple equation.





Economist argued against free labor (slavery). The end of slavery, many thought a few hundred years ago, would "cause the society (and economy) to fall to pieces" because they didn't want to get rid of the class system and did not know that forced labor was inefficient (Think of state-run government aka Totalitarianism/Communism).





Per capita income:


US: 6th IMF, 6th World Bank


Germany: 20th IMF, 18th World Bank





Germany, like many developed nations have a lot of "bohemoths":


Allianz, DaimerChrysler, Deutche Bank and so on...


http://www.forbes.com/lists/2005/183/Ran鈥?/a>





Economic education should be pursued and one should understand a topic before being biased against it.