From each according to his genes

Colin Tudge

This article originally appeared in the Independent on Sunday, 7 July 1996

When New Labour finally excised Clause IV and hence the pledge to nationalise all serious economic activity, it also exorcised Karl Marx, ostentatiously acknowledging that over-centralised economies are usually low on efficiency and invariably low on charm. Today we have social democracy, offering the best of all worlds: society calls the shots, while free people joined in free enterprise stoke the economic fires.

But although his prescriptions have been found wanting, Marx did at least achieve consistency. He re-thought western economy and psychology down to their roots and then designed a new economy, expressly to create a just and egalitarian society in an industrial milieu that seemed condemned to provide the precise opposite. New Labour's manifesto should he no less momentous than Das Kapital - for we on the verge of the 21st century need a new economy as much as the people of the mid-19th: one that really can produce the goods but also - as a matter of course, and not in the manner of an afterthought - foster humanity and justice.

New Labour has not risen to this challenge. Tony Blair may plead that his new manifesto is 'radical' yet in esscnce it promises only to perpetuate the same greed-driven economy as before; the despair that has grown under the Tories will, apparently, be blown away by nothing more than a vague and somewhat quaint desire to do good. New Labour should win tbe next election if only faut de mieux but so far it fails to convince. Perhaps it is too late, but in the long summer recess the party must, as they say in Yorkshire, think on.

Indeed, if New Labour is truly to devise an economy that will give us an efficient but just society, then it must venture beyond the ideas of conventional politics and - surprising tbough this may seem - explore the rich fields of evolutionary biology.

Robert Frank, from Cornell University, is one of several modern economists now showing why such an adventure is worthwhile. As Marek Kohn reported in this newspaper| (16 June), Frank aired his idea last month at the London School of Economics. He and his colleague Philip Cook have devised a 'progressive consumption tax that is precisely adjusted to the needs and aspirations of social democracy; and although the tax has yet to be put to the test, the thinking that underpins it seems eminently robust. It is rooted in a modern interpretation of the ideas of Charles Darwin.

Frank describes the ills of capitalist society in much the same way as any of us might - and indeed as Marx did: that while the rich get richer the poor get poorer and, oddly enough, nobody seems to get any happier. Unlike most of us however, Frank has data to support his impressions. Thus, he says, in the mid-1970s chief executives in the United States earned 35 times as much as the average worker; now they earn more than 120 times as much. The same trend is apparent in Great Britain (though much less so in Germany and Japan). In the same period, the mean income of American people has fallen by no less than 15 per cent in real terms, while the bottom fifth of all earners have fared even worse. Of course, the British and American economies have expanded over that time; but 40 per cent of that growth has gone to just 1 percent of the population. Thus within the framework of democracy we have creatcd a society that is pre-industrial - feudal, indeed - in its distribution of wealth.

But are the ridiculously rich of the present day conspicuously happier than their merely wealthy counterparts of 20 years ago? Common observation does not suggest this - and there is positive evidence that they are not. For example, length of life is known to be related to psychological well-being. Richard Wilkinson of Sussex University whose book Unequal Societies will be published by Routledge in September. shows that, where the discrepancy between rich and poor is huge, people at both ends of the economic spectrum die younger than in societies where wealth is more evenly spread As Frank says, rich people in reasonably just societies may be admired by their less wealthy peers, but fat cats in poor societies must live with the resentment of those around them.

Why have we allowed ourselves to create economies in which, it seems, nobody truly benefits? Frank believes that all economists so far have misdiagnosed the problems. All economic systems have to be founded on some 'model' of a typical human being: on a preconception of how human beings are, how they normally behave, and how they treat and regard their fellow beings. From Thomas Hobbes in the 17th century through Adam Smith and Marx to Ronald Reagan and Margaret Thatcher, all models have taken it to be self-evident that human beings are 'naturally' selfish, in the sense that they seek overwhelmingly to benefit themselves and their immediate family (who are an extension of themselves); that they are 'rational', in that they calculate dispassionately what is good for themselves; and that gratification is directly related to consumption - meaning the more they consume, the happier they become. Economies on both sides of the erstwhile Iron Curtain were constructed on just such models. But, says Frank, it just ain't so. Common observation, growing empirical evidence, and now - crucially - modern Darwinian theory all show that human beings are not at all as economists have conceived them to be. By nature we are much more benign; and an economy that mirrored ourselves would also be more benign.

A moment's reflection shows that we are nothing like as selfish as economic tradition supposes. Why, if it were so, would we contribute to charities, or help strangers, or fail to push old people into the road when their earning days are over? It is not the law that prevents us: laws that work merely reinforce what we feel already to be right. Such everyday musings might seem too shaky a foundation for economic theory but modern Darwinism supports this vision of ourselves. To be sure, the notion that Darwinian precepts should predict unselfish behaviour flies in the face of what most people have cbosen to believe this past 150 years. Before Darwin, Tennyson wrote of 'Nature red in tooth and claw'; and Darwin in The Origin of Species of 1859 argued that 'the struggle for existence' was the driving force of evolutionary change by natural selection. Darwin saw this struggle as personal: individual versus individual. Now, most theoretical Darwinians envisage natural selection operating not on individuals but on particular genes. The genes, as Richard Dawkins put it, are 'selfish', and individuals are merely their 'vehicles' (although genes are not so much selfish as solipsist, since they are a world unto themselves). Struggling individuals underpinned by selfish genes; this seems unpromising material from which to create a kind society.

But these 'selfish' genes can produce remarkably unselfish behaviour; 'altruistic' indeed; positively self-sacrificial. Bill Hamilton, now a professor at Oxford, first showed in the 1970s that natural selection would favour genes that prompted their owners to sacrifice themselves for the sake of their own kin - since their kin would contain copies of the self-same gene that fostered the behaviour; hence his idea of 'kin selection'. Then in the United States Bob Trivers showed that selfish genes ought to encourage their owners to benefit strangers, provided those strangers returned the favour; hence 'reciprocal altruism'. Such ideas may seem obvious but biologists had assumed the precise opposite - that nature was ineluctably vicious.

The notion that we are 'by nature' vicious has persisted in economic thinking. Yet if we extrapolate the ideas of Hamilton and Trivers ever so slightly we see that it can favour selfish genes that foster benignity in society at large precisely because, by doing so, they improve their own chances of surviving and replicating. In short, the standard economic model which supposes that human beings are only out for themselves is just not true; or at least, represents part of a more complex and promising truth.

And are we really 'rational', in the sense that we opt detachedly for short-term gain? Common observation again suggests that we are not - for many ideologies demand self-sacrifice and how could they exist if it were so? Modern biology and psychology again support the common view. More and more studies reveal that unless our  intentions are underpinned by emotions, then we are quite unable to make decisions; indeed, modem 'smart' robots have to be programmed with some simulacrum of feeling or else as Hamlet said 'they lose the name of action'. Star Trek's emotionally destitute Mr Spock is the most fatuous of inventions - for without feeling, he would be quite unable to offer advice on anything requiring more judgement than the time of day. Modern evolutionary theory predicts that this ought to be the case. For emotion - and here is another counterinituition - makes us efficient: in making choices we do not calculate odds but opt for what we desire, and what we desire (who can doubt it?) is only occasionally 'rational' in the short-term, material sense.

Finally, is it true that happiness is geared to consumption and that more consumption means more gratification? Only at the most basic level, so common observations suggests. To be sure, a family house is better than a storm drain in a shanty town - but, as Frank points out, the 50,000-square-foot home that Bill Gates is now building for himself near Seattle is less comfortable and will be a great deal more trouble than one half its size. So why does Gates want such a thing? Because he is a captain among industrial captains, and as such feels obliged to outshine the rest.

This brings us to the heart of Frank's economic prescription. Of course it is true, he says, that people work for reward; and reward generates consumption. But above a certain threshold, what counts is not absolute consumption, but merely the desire and need to be outstanding among peers; desire and need that are predictable in Darwinian terms, for the outstanding individuals in any population (or at least the outstanding males) are those most likely to attract mates, and hence to spread their genes.

Thus we need only to ensure that people at the top are allowed to retain their pole position, which means so much to them; but that they do not need to skew the economy so disastrously in order to stay there. Frank's progressive consumption tax, which taxes spending rather than earning, ensures that things that at present are cheap remain cheap, while things that are now expensive become ridiculously so. Bill Gates could still demonstrate his superiority, and thus feel good, by building a £10m house alongside our £50,000 houses: but progressive consumption tax would mean that his £10m house was only twice as big as the average, not 20 times as big.

Those who none the less chose to spend a fortune on mansions or prestigious performance cars would contribute to the public coffers through the tax on their consumption; providing cash for schools and clinics and theatres and all the things that once, in living memory, made life agreeable.

The progressive consumption tax might not work, at least in its present, simple form. What matters most is the principle: that here is an economic prescription based on a model of humanity which seems to correspond to the way that people actually are. It is not based on guesswork or wishful thinking; it is supported by data and the theory founded by Darwin in the mid-19th century which has been explored and refined ever since. It is a wonderful bonus that the model is benign; it tells us what true socialists have believed all along, that people are not as inveterately unpleasant as philosophers and economists have supposed.

Social democracy with robust foundations would be a fine legacy for the 21st century. It needs courage to put it across: we have in particular to abandon the mantra of our time which says that tax is a bad word, and acknowledge instead that taxes are the price we pay for civilisation. Civilisation would be a prize indeed and it is, apparently, achievable. Somebody ought to deliver it; and it could be New Labour if, to borrow one last trick of Karl Marx, they are prepared to think deeply.