Paul Rubin on Evolution and Trade Policy

I just saw this on SSRN and thought others might find it interesting:

Paul H. Rubin - Evolution, Immigration and Trade - washingtonpost.com http://www.washingtonpost.com/wp-dyn/content/article/2007/05/07/...

1 of 3 5/12/2007 5:29 AM

By Paul H. Rubin

Special to washingtonpost.com's Think Tank Town

Monday, May 7, 2007; 12:00 AM

It was once thought that humans are born as "blank slates" to be programmed by our

families, culture and society. While those forces play an important role, evolutionary

psychology teaches us that human behavior is also the product of the environment in which

humanity evolved -- that many of our intuitions are ingrained because they contributed to our

primitive ancestors' survival.

Public policy pays surprisingly little attention to evolutionary psychology. Yet there are

many human intuitions and behaviors that influence contemporary policy issues -- sometimes

in ways that are no longer useful or perhaps even harmful to humans flourishing. These

intuitions are sometimes referred to as "folk economics," and one area in which they often

emerge is the international economy.

Our primitive ancestors lived in a world that was essentially static; there was little societal or

technological change from one generation to the next. This meant that our ancestors lived in

a world that was zero sum -- if a particular gain happened to one group of humans, it came at

the expense of another.

This is the world our minds evolved to understand. To this day, we often see the gain of

some people and assume it has come at the expense of others. Economists have argued for

more than two centuries that voluntary trade, whether domestic or international, is positive

sum: it benefits both parties, or else the exchange wouldn't occur. Economists have also long

argued that the economics of immigration -- immigrants coming here to exchange their labor

for money that they then exchange for the products of other people's labor -- is positive sum.

Yet our evolutionary intuition is that, because foreign workers gain from trade and immigrant

workers gain from joining the U.S. economy, native-born workers must lose. This zero-sum

thinking leads us to see trade and immigration as conflict ("trade wars," "immigrant

invaders") when trade and immigration actually produce cooperation and mutual benefit, the

exact opposite of conflict.

Conflict was common in the environment in which humans evolved. As primates, which are

a very social order, our ancestors lived in relatively small groups in which everyone knew

everyone else. Our minds are adapted to deal with populations of that size. Our ancestors

made strong distinctions between members of the in-group and outsiders, and we still make

such distinctions today -- social psychologists can create in-group and out-group feelings

based on virtually any arbitrary difference between populations.

The in-group and out-group intuitions help fuel opposition to expanded trade and

immigration. The public intuitively believes that the beneficiaries of such policies will be

foreigners, and it is easy to arouse suspicion about those who are not part of our in-group.

When coupled with zero-sum thinking, this is a powerful political tool. For instance, a

domestic industry or collection of domestic workers, when having difficulty competing with

foreign or immigrant competitors, can use innate dislike of outsiders when advocating for

increased barriers.

As the evolutionary inheritors of small-group societies, our minds sometimes have difficulty

appreciating risks, harms and benefits experienced by a large population. In a group of 100

people, when we observe something that has happened to someone, it is a reasonably likely

event. In a society of 300 million, when we learn about something happening to one person,

it may be an extremely unlikely event, but we often perceive it as likely when we see it on

the news. This instinct also shapes our perspective on trade and immigration. We

understandably have great sympathy for workers who lose their jobs because they can't

compete with foreign workers, but we have difficulty appreciating the benefit that our nation

of consumers gains from the products of foreign laborers.

As products of evolution, humans cannot help but be born with certain biases. But we are not

condemned to this evolutionary programming; we can identify the biases and recognize when

they lead us astray in the modern world. American history is marked by many periods of

openness to trade and immigration, and those periods have often featured strong economic

growth and human prosperity. However, American history has also seen many instances in

which our zero-sum and anti-outsider intuitions reemerged, whether in the form of

prohibitions against "dogs or Irishmen" or policies against "outsourcing."

A useful analogy is between speech and reading. All humans growing up in a normal

environment learn to speak, but reading must be taught because it does not come naturally.

Folk economic beliefs are like speech -- we get them without trying. A deeper understanding

of economics is like reading -- it must be taught.

America's success in lowering its barriers to outsiders shows that we can and do learn. But

like reading, we must teach each generation anew.

University and the author of Darwinian Politics: The Evolutionary Origin of Freedom

(Rutgers University Press, 2002). He has been writing a series on evolution and economic

behavior for the Cato Institute's journal Regulation.