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Economic Development and the Death of the Free Market

Blair Fix

No 2020/01, Working Papers on Capital as Power from Capital As Power - Toward a New Cosmology of Capitalism

Abstract: Free markets are, according to neoclassical economic theory, the most efficient way of organizing human activity. The claim is that individuals can benefit society by acting only in their self interest. In contrast, the evolutionary theory of multilevel selection proposes that groups must suppress the self interest of individuals. They often do so, the evidence suggests, by using hierarchical organization. To test these conflicting theories, I investigate how the ‘degree of hierarchy’ in societies changes with industrial development. I find that as energy use increases, governments tend to get larger and the relative number of managers tends to grow. Using a numerical model, I infer from this evidence that societies tend to become more hierarchical as energy use grows. This result is inconsistent with the neoclassical theory that individual self-interest is what benefits society. But it is consistent with the theory of multilevel selection, in which groups suppress the self-interest of their members.

Keywords: culture; development; energy; free market; hierarchy; multilevel selection; power; sociality (search for similar items in EconPapers)
JEL-codes: O2 O43 P16 P48 Z1 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-evo and nep-hme
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:capwps:202001

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