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Economic development and the death of the free market

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  • Blair Fix

    (York University)

Abstract

According to neoclassical economics, the most efficient way to organize human activity is to use the free market. By stoking self interest, the theory claims, individuals can benefit society. This idea, however, conflicts with the evolutionary theory of multilevel selection, which proposes that rather than stoke individual self interest, successful groups must suppress it. Which theory better describes how human societies develop? I seek to answer this question by studying the opposite of the market: namely hierarchy. I find evidence that as human societies develop, they turn increasingly to hierarchical organization. Yet they do so, paradoxically, at the same time that the language of free markets becomes more common, and culture becomes more individualistic. This evidence, I argue, contradicts free-market theory, but only if we treat it as a scientific doctrine. If instead we treat free-market theory as an ideology, the pieces come together. Free-market thinking, I speculate, may stoke the formation of hierarchy by cloaking power in the language of ‘freedom’.

Suggested Citation

  • Blair Fix, 2022. "Economic development and the death of the free market," Evolutionary and Institutional Economics Review, Springer, vol. 19(1), pages 1-46, April.
    • Handle: RePEc:spr:eaiere:v:19:y:2022:i:1:d:10.1007_s40844-021-00224-2
    DOI: 10.1007/s40844-021-00224-2
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    More about this item

    Keywords

    Hierarchy; Hierarchical power; Free market; Economic development; Sociality; Cultural evolution; Multilevel selection; Energy;
    All these keywords.

    JEL classification:

    • N00 - Economic History - - General - - - General
    • L00 - Industrial Organization - - General - - - General
    • C00 - Mathematical and Quantitative Methods - - General - - - General

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