DARWIN AND ECONOMIC THEORY
by
Frank W. Andres
© Copyright, Frank W. Andres, 2017. All Rights Reserved.
This is a Minibook…Instead of expressing an idea and then blowing the number of pages up, up
towards three hundred…just so we can charge $25, as is currently the fashion… we are presenting the
kernel of an idea…in the hopes that idea can be transmitted more rapidly and breakthroughs can occur
now, not next century. There is a fifty percent chance that humanity will not make it through this
century… it is important that we make as much progress as fast as we can…so as to avoid an untimely
demise.
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Introduction
So human beings are animals now. Darwin proposed it. Crick and
Watson proved it is so. So we must live with this embarrassing fact.
So what happens to economic theory? It doesn’t seem to have anything to do
with any of this. In fact it doesn’t seem to have anything to do with real
humans at all. Of course, there was the Church. I mean, there was the
Middle Ages…Do you realize that many people say that this modern age
began only very recently…like in or around the year 1922? And we think we
are so thoroughly modern…in actuality many parts of our lives are ensconced
in a medieval, dark age. Of course the real Middle Ages were so much more
sinister…Yes, there once was much death…little hope. Our only hope was
that we weren’t animals. That is we were “of God.” So if there was little
hope here on earth…well, then for God’s sake there was hope in the baloney
that the Church purveyed. I’m not saying there is no God…but that is a
different minibook.
So when universities emerged..science was mostly witchcraft at the
beginning… the Church said that science was all well and good and fine…but
be careful….leave humans alone…for God’s sake, we need some hope…for
something better…in some other world Thus economic theory was
born…which has little to do with human beings.
I am an economist, economic historian and a philosopher…Let’s see
where all this imprudent thinking takes us.
The Church and the Social Sciences

The science of man and woman, otherwise known as the social
sciences, comprises those disciplines related to the study of humans, to the
aspects of their physiology that are unique to them…I mean, really unique to
them…what we are talking about here is their exceptionally creative
minds…and the world their creative minds have, well, created.
At the present, the science of man and woman is floundering. Since the
eighteenth century, economic and technological revolutions have transformed
the Western world…they have brought a dramatic improvement in the
standard of living for people in one-third of the world. Now man and woman
are attempting to move farther, accomplish more for all of humanity…and
monumental social problems are confronting them. These major social
problems relate to the physical and psychological trauma of confining man
and woman to an artificial, urban world; they relate to the constraining force
of medieval institutions upon the explosion of their tools…and they relate to
the increasing divergence between the rich and poor…These problems have
metropolitan national, and global implications. Scientists say that humanity
has only a fifty percent chance of surviving this century. Something must be
done…It is difficult to do anything when the science of man and woman we
are utilizing still resides stubbornly in the Dark Ages.
The social sciences have disturbing problems. Let’s look at one such
science …economic theory… to see what some of these problems are and what
actions might be taken to solve these problems.

What is Economics Theory?
If man and woman are animals, then their behavior must be biological.
Humans are unique among animals in that they make and utilize tools…
routinely,… constantly. However, humans do not make tools for their own
sake, they make tools in order to produce goods. The production of these
goods and how these goods are distributed among members of a society is
examined in the discipline of economics.
In existing economic theory, it is assumed that man ad woman are
different from other animals in possessing a more highly developed brain…
perhaps even a “soul”… which is separate from and separates man and
woman from all else in the Cosmos. It is maintained that man and woman’s
actions cannot be predicted because the unique caliber of their intelligence
(as well as the other-world nature of their “souls”) defies the forces of
deterministic tendencies. Consequently, economic theory rests upon
“eternal”, a priori laws, derived from what a hypothetical rational man or
woman would do. Economic theory for humans as a whole is then derived
from an aggregation of what many rational people would do. Upon this
largely non-empirical base, a superstructure has been erected in which some
empirical evidence has been incorporated. However, the entire theory has
been severely influenced by the unique perspective upon which it is based.
It may be difficult for someone who is acquainted with economic theory
to imagine what relationship the existing theory has to biology, let alone how
it could be placed completely upon a biological base. The existing approach
is highly abstract and mathematical, and all calculations whether they are
related to ships, sails, or sealing wax, are computed almost exclusively in
monetary terms. Neither the physicist nor the biologist is concerned with,
nor is scientific advance in general dependent, upon the examination of
money.
What has gone wrong here? What are we missing?
What is Money?
The thing is…animals do not have money…and the examination of their
activities is fairly straight-forward. Man and woman have money…which has
led to problems when their activities are examined.. So what is money? And
exactly how does its presence tempt economists into examinations which are
fraught with problems?
In this minibook an exchange is defined to be a swapping of
commodities between two producers which may or not result in both
producers being satisfied. A transaction is defined to be an exchange or
series of exchanges in which all producers involved are satisfied. To be
satisfied means that a basic need is in fact met, and not merely that a promise
has been given or that the means exists which guarantees that a basic need
will eventually be met.
So what is money? Money is a promise for a good. It can be used in a
transaction when one producer does not have a good desired by another and
use must be made of a medium of exchange.
What is a medium of exchange? In a series of exchanges of goods,
commodities may be received by producers which they do not desire to
consume themselves. The producer of corn could swap corn for wheat that
he desires. The receiver of the wheat may not really need it, but he is certain
that he can exchange the wheat for shoes that he does need from another
producer. Media of exchange are used because it is easier to find a person
who has what you need than it is to find a person who both has what you
need and needs what you have.

So money is a promise for a good. Why does one say that? Well,
money can be used in a transaction when one producer does not have a good
desired by another and use must be made of a medium of exchange. Instead
of giving a producer what he does not want in exchange for wheat I need..I
can give the producer a “promise” that I will give a certain amount of corn to
any person who gives me the “promise” in the future. This “promise” is
“money.” Thus money is an interest free loan. A person must be
compensated with additional goods, which are called “interest,” if there is an
undue delay in the completion of a transaction. Money is an interest free
loan because the producer of wheat is not unduly delayed in receiving the
shoes he needs. In addition, the wheat producer is greatly convenienced
because he does not have to carry corn around until he can find a buyer for it.
Money is not a good. It represents a loan, a good promised and a
promise is not a good. Always it is the availability of the commodity which
will be given immediately to the bearer of the promise which makes the
promise valuable and enables it to circulate.
Two Worlds…Goods and Money
At any moment in time, a unit of money is related to a particular
incomplete transaction and is always related to a good. Money is not a
medium of exchange. It is the goods the money represents, the goods which
are promised, which are the media of exchange. It’s kinda like there are two
worlds…one that is real and one that is just paper…moving in opposite
directions.

Let me break here for a moment. In all of the social sciences, there are
two worlds. There is the real world…of animals…of the animals, man and
woman, which the Church does not allow people to meet square on. Then
there is an imaginary world created entirely by human’s minds…that is more
than an arm’s length away from that real world. Humans are like the Wizard
of Oz, trying to run a world with bells and whistles that are a long ways away
from the world humans are trying to make better. Economics displays these
two world very clearly…but every social science has these two worlds.
This “two world” aspect is present in every part of our lives. Humans
have created an artificial urban world that is not entirely compatible with our
bodies. The world of the jungle which our bodies long for unfortunately no
longer exists for us. We live in an artificial world created by our minds.
Scholarship has this dual nature also. When we work in the social
sciences…we are working in a virtual world..each social science has its own
virtual world…what Jean Baudrillard calls “Simulcra”…”Simulation is no
longer that of a territory, a referential being, or a substance. It is…the
generation by modeling of a real without origins or reality: a hyperreal.”
(Baudrillard, The Real and the Simulacra.) Baudrillard has announced that
modern society is being controlled by corporations with their proliferation of
goods…and the saturation of human’s consciousness with advertising has
erased any remnants of a real world…This has left modern man and woman in
a world that is artificial and virtual.

The same is true for humans’ scholarship. That is, one can continue
Baudrillard’s thoughts in another way. In the social sciences humans are not
animals. The social sciences have methodologies that are radically different
from the natural sciences. The methodologies are different from each other.
Each social science possesses its own simulacrum…Because of these
simulacra of knowledge and methodology…humans are kept powerless in the
face of immense world problems. The only way for this to be corrected is for
scholarship to place humans on earth where they belong, as real, physical,
animal beings. The problem and the solution for all the social sciences are
very clear when one considers economics.
In a series of exchanges among four individuals (A,B,C,D), there are
two flows…one of money and one of commodities. A might swap money with
B for shoes, B might then swap the money with C for wood. C might then
swap that same money with D for clothes. Among the individuals money is
moving in one direction and goods in the other.
The money flow bears the same relationship to the goods flow as
footprints do to a human. Footprints give an idea of where a person has
walked, but they are not human. In the same way, the money flow is related
to the goods flow and it can be used to gain information indirectly concerning
the goods flow, but it is not a part of the goods flow.

Money supposedly makes economics more accurate.. It gives us
numbers that apply to all commodities. Transactions are documented in
monetary terms by banks and so totals are easy to come by…whereas physical
quantities are not so easily obtainable…However, there is a downside to using
money to describe economic interactions. The truth is… using money leaves
the economist with a theory that is partial as well as static. Existing
economic theory is partial because it focuses only upon individual exchanges
involving money for goods. The flow of money makes no sense…money
flows from the butcher, the baker, to the candlestick maker. In analyses of
money flows, knowledge concerning who produces what, where, when is lost
in the aggregation of money exchanges to reach a total which is meaningful
to us called Gross National Product (GNP). The GNP for the year can be
compared with the GNP of previous years to tell, if inflation is deleted, to tell
if an economy is growing fast or more slowly. This number, the money
represented by GNP, seems to be accurate and meaningful, but the whole
interrelationship of goods and their production and distribution in space and
time is lost as well as the whole raison d’ etre for the exchanges which are
observed.

Second, existing economic theory is static. It stops the flow of goods in
order count up…money which changes hands during a certain time is
compared with the amount of goods exchanged during the same period of
time previously. Stocks of money must be compared with stocks of goods
because there exists no one-to-one relationship between a dollar bill and
goods beyond one exchange between two people. Thus, existing theory is
limited because it can only view the economy in snapshots, not in a
continuous, dynamic examination of commodity flows.
This point of view which is primarily medieval in origin, separates
economics from biology. It separates humans from power…power to change
the world efficiently, directly for the better.
The Science of Everything
We must build a new economic theory. Well, all the social sciences
must be rebuilt…and when they are they will all have the same methodologies
as the natural sciences….When all sciences have the same methodologies..we
shall have a Science of Everything…all the disciplines will be able to talk to
each other…help each other…plus the methodologies employed by the natural
sciences are more powerful to begin with.
So exactly how can Adam Smith become Darwin?…Pretend that you are
an alien from outer space…you notice human habitation on earth as you
approach for a landing…How would you describe human society
scientifically as you descend? Well, first of all, one could not see money…nor
does one have to even know about money…You just look at trucks and trains,
steel and hemp and young people in the mall. The major human
configuration on earth is that of the metropolitan area. Thus humans have
evolved backwards from the primal band of the ape, which they lived in until
the great agrarian empires arose some 3,000 years ago. Thus man and
woman with their tools have drastically changed the fabric of their lives. The
metropolitan area can be compared to a multicellar organism such as a mold,
which grows outwards contiguously over time. The metropolitan areas from
the perspective of a satellite grow outwards contiguously as population
increases. The examination of man and woman in their cities can be made as
a scientist would examine molds. Biologists are not developing indifference
curves and isoquants in their study of ant hills. They are not counting money.
Much description work regarding the structures of metropolitan areas and
activities is presently being done in the field of economic geography.
In order to test the power of a biological perspective upon the
investigation of man and woman’s economic behavior, I attempted to make
population projections in metropolitan areas utilizing the knowledge we have
molds and how they grow and expand. For example, U.S.G.S. quadrangle
maps were found for the Los Angeles metropolitan area in 1906. An
isochronic map was developed with lines depicting distances traveled in
every direction from the urban core during equal periods of time. Population
figures were available for every decade from the U.S. Census from 1910 to
1965 for the Los Angeles area. I calculated the area consumed by population
added each decade to the area that population occupied in 1906, as indicated
on the quad maps. Then I placed these areas consumed by population in a
contiguous manner from the industrial core outwards in every direction,
utilizing the isochronic map. The expansion of the population projected for
the year 1965 was then compared with what had actually occurred. Projected
results were within five percent of what had actually happened. Analogies
from biology and the utilization of methodologies used in biology will be
powerful ways to examine man and woman’s economic behavior.
The thing that unites the production and distribution of all goods is the
expenditure of energy. Instead of counting up money…count up energy
expended… in every activity. If you look at the United States at night from
the perspective of a satellite…one see dots of light…the patterns of light show
the metropolitan areas where most people live and expend energy…the
patterns of light show the expenditure of energy directly! Economic theory
should be the study of these patterns of light…patterns of energy…these
metropolitan areas and their interaction. Once the functioning of healthy
metropolitan regions is understood, then diagnoses of disease can be made
and remedies formulated. More difficult may be phenomena related to the
fact that Homo sapiens is only a one part of the macro-organism…we are
enmeshed in our own tools; we are parasites in our own tool organism…
however, priorities within the organism must be ranked with respect to what
is most beneficial for man and woman. For example, it may be part of the
metropolitan region organism’s normal functioning to have recessions, slums,
inflation, and other phenomena which may have tremendous adverse effects
upon man and woman embedded within it. If this is the case, behavior which
is normal for the organism may have to be altered to ameliorate the
discomfort of man and woman. Such amelioration may involve a trade-off
between short-run discomfort of human beings and medium and long-run
gains created by the cyclical growth of tools for these same human beings,
whose lives are caught in these tools.

The trend that is hoped for is for man and woman’s lives to be made
better every day; however, there are agonizing short-run problems such as
those involving minorities, Third-World backwardness, as well as the basic
incongruity of man and woman living in a world that is incompatible with the
needs of their bodies. Scientists can be biologists looking down from
satellites as they would examine an ant hill…they can see what is causing
problems and fix the situation…instead of just looking at a bunch of numbers
and curves and guessing wildly what the problems might be and attempting
to fix things in a monetary way. Problems will be more easily solved when
all disciplines are utilizing the same methodologies and can more easily work
together to change the world for the better.
This brings us to the concept of the Science of Everything…as I say, if
each of the social sciences are placed on a biological base, they can talk to
each other. They can work together easily in solving world problems. Also
the social sciences can then talk to the natural sciences easily, which will lead
automatically to solutions for things like global warming. Instead of a theory
of everything which seems to be some sort of mathematical equation which
will solve all problems on earth…which seems unlikely…we need a Science
of Everything with all disciplines…the science of man and woman in concert
with all the biological sciences which in turn are consistent with the physical
sciences…all on the same page…addressing world problems in a concerted
powerful way.
Hopefully, man and woman will be able to extricate themselves from
the progeny of their minds…from their tools…within a generation or two.
Then they will be able to resume a lifestyle more consistent with their
physiology, as humans and machines begin to occupy separate geographical
locations…that is, soon cities will be fully automated and fully connected
such that only a handful of people will be able to run an automated city that
produces all the goods for a given region. People then will be free to live
more with nature and work more creatively in their living pods made from
membranes fabricated by DNA. In the meantime, recognition of the fact that
the activity within the metropolitan region is a biological activity, should
allow the science of man and woman to develop investigative procedures and
medial remedies which will be effective in reducing the torment of this
transition urban stage in human history.

For a more detailed examination of this whole topic, see my book, Man
and the Cosmos…The Science of Everything…available from Amazon.