The level of prosperity is determined by just two parameters: ability and motivation. Some people would add luck as a third parameter. However luck is a random variable that normalizes out over time. Ability is the measure of how efficiently we can accomplish a task to obtain resources (i.e. how smartly we can work). Today's ability is the result of yesterday's education, investment and innovation. For example our individual ability is determined by our natural ability (past biological innovations), our past education and the tools we own (past investment). While our ability determines how efficiently we can work, our motivation determines how hard we work to obtain resources. Together these two factors, how hard we work and how efficiently we work determine our level of prosperity.
Future growth in prosperity requires improvements in ability. The hours of the day limit how hard we can work, but there is no limit on how efficiently we can work. The three ways to improve ability are education, investment and innovation. Education is the process of training the mind and body to more efficiently perform certain tasks. Investment is the creation of tools that augment our ability in performing tasks more efficiently. Finally innovation is the discovery of new ways to perform tasks more efficiently.
Each of the three ability enhancements has a service life. Education only lasts for the lifetime of the individual. Each new generation must relearn the skills of their parents. Investment can have a longer lifetime, but it too depreciates and must be continually renewed.
Innovation is forever. Of the three ability enhancements, only innovation is permanent. Knowledge can be lost but it does not depreciate. Each new generation must learn arithmetic, but the priceless innovation of Arabic numbers does not have to be reinvented. The permanence of innovation makes it the only way to achieve enhanced long term prosperity. The evolution of life on earth is a record of the successful and unsuccessful innovations that have been evaluated to achieve enhanced prosperity.
There are three categories of innovation: 1) biological innovation which is the more efficient arrangement of cells to form an organism. This also includes instinct which is hard wiring the brain to achieve permanent education. 2) social innovation which is the more efficient arrangement of social units of biological organisms (examples include herd behavior among prey, pack hunting behavior among predators and schools, marriage, the rule of law etc. among human beings). 3) technical innovation which is the discovery of knowledge that enables us to more efficiently interact with the environment usually by building more efficient tools.
Biological organisms meet the requirements for order and innovation sequentially. The lifetime of the organism is based on order with no genetic modifications permitted. If a group of cells should decide to grow a third arm or a big tumor, the organism has no way of determining whether or not this mutation would be beneficial. Therefore living organisms do not permit biological innovation and they ruthlessly crush any mutations that arise. Biological innovations which are essential for long term adaptability and prosperity only occur between generations. Therefore the biological cycle of life, reproduction and death is nature's solution to achieving both order and innovation. The length of time between generations represents a tradeoff between biological complexity and rapid biological adaptability in the race for prosperity.
Development of the higher levels of the brain was a giant evolutionary leap for both order and innovation. The higher levels of the brain provided the capability to become educated by remembering the experiences of life and then by developing learned behaviors to more efficiently respond to the natural environment. Without the capability for education all the information required to build and operate an organism had to be encoded in the DNA and inefficiently replicated in each and every cell. While the DNA is truly a marvelous biological innovation, DNA alone is not capable of defining both the structural architecture and the increasingly complex behavioral patterns of complex organisms. The expansion of the brain provided an extra-DNA reservoir for instructions, particularly behavioral instructions. Although research indicates that information may be redundantly stored in the brain, this is still far more efficient than storing the information in each cell. The expansion of the brain dramatically increased the ability of life to prosper by learning complex behaviors that would have been impossible to program into the DNA. The obvious disadvantage of extra-DNA information storage is the requirement for education to teach each new generation the skills of their parents.
The capability for education made possible by an enlarged brain provided the ability to innovate by adapting behavior to the current conditions in an animal's lifetime. This ability to be behaviorally programmed (i.e. educated) significantly reduced the time constant for adaptation. Rather than biologically adapt through random genetic mutations which are fixed for the life of the organism, education permitted an organism to learn by trying different behaviors and then adopting those which proved most successful. Although higher animals retained instinctive behaviors, they were able to modify these behaviors through education to accommodate changing conditions. The adaptability provided by education enabled nature to favor development of increasingly complex organisms that could retain the ability to innovate.
The ability of education to enhance both order and innovation has been a central focus in mankind's social development. Human social groups achieve enhanced ability through both shared experience and specialization. Shared experience enables many to more efficiently gain knowledge from the experiences of one member of the group. Specialization allows the group to increase their collective ability by allowing each member to concentrate his education in a different area. Both these methods also enhance innovation. Specialization increases each member's ability to develop social or technical innovations in his area of expertise and shared experience makes these innovations available to the entire group.
While many aspects of education function to support both order and innovation, the strong age preference of education brings these two requirements for prosperity into conflict. While education can be received throughout an organism's lifetime, the receptiveness to education is much greater in the young. Current research indicates that the process of education in the young results in actual physical changes to the brain as it becomes "hard wired" based on accumulated experience. For example although a person can learn a foreign language later in life, he can never achieve the fluency of a native speaker. This process may be something like the action of a computer compiler which converts higher level computer codes to machine language. The ability to convert behaviors to "machine language" apparent ends at puberty when the structure of the brain becomes fixed. The maturation of the brain provides each generation the opportunity to obtain a more contemporary understanding of the world than their parents. When each new generation reaches adulthood, they have the opportunity to use the understandings they have received through education to develop social and technical innovations to enhance prosperity.
Mankind's age limited ability to receive education is a form of biological damping on the process of innovation. In the same way that organisms oppose biological innovation during their lifetimes, so the "generation gap" phenomena in human education leads people to oppose social and technical innovations in their lifetime. This process ensures a more orderly society by delaying social changes until the generation which was educated to the need for a social or technical change gains control of the society. However the generation gap effect can also threaten prosperity when conditions change rapidly and a society is unable to respond to those changes. Fortunately the mature human mind is also able to receive education to a remarkable degree. This ability mitigates the generation gap effect and enables properly structured societies to efficiently respond to change.
Throughout history rigid social structures that thwart innovation have posed one of the greatest threats to human prosperity. These institutions function like immortal biological organisms that perceive innovation as a threat to their existence. Like the biological organisms they mimic, the real threat to their existence is their failure to respond to the inevitable need to adapt and improve. Innovation is their opportunity to prosper and avoid extinction. However permitting some disorder (and potential loss of prosperity) today to ensure survival and prosperity tomorrow is too enlightened a concept for many of these institutions. They tenaciously hold on to existing behaviors and methods until the inevitable forces of change lead to their extinction. The collapse of communism around the world is an example of this process. Communism was born in response to glaring deficiencies in the operation of free enterprise capitalism. However capitalism continued to positively evolve through the forces of democratic change while communism did not evolve and therefore became extinct.
Modern American society has many entrenched institutions that thwart innovation and thereby reduce American prosperity. One of the great challenges to an American Renaissance will be to identify these roadblocks to prosperity and then to pursue democratic methods to remove these roadblocks with minimum disruption to American society.
Solar radiation and natural elements were the only inputs for early life on earth. Photosynthesis allowed life to liberate carbon from CO2 for organic molecules. The resulting free oxygen provided a chemical energy source when the sun was not shinning. The predation of life on natural elements, sunlight, and the free oxygen released by photosynthesis led to the evolution of increasingly complex species of plants.
The presence of free oxygen that permitted oxidation of a cell's own matter when the sun was not shinning also permitted oxidation of any other available organic matter. This situation presumably led to cells which increasingly fed on other cells rather than photosynthesize food themselves. The biological innovation of plant predation led to the evolution of herbivorous animals. The existence of herbivorous animals led to the biological innovation of carnivorous animals and omnivorous animals with a proliferation of animal species including quite recently our own.
Predation is one of nature's finest tools for fostering innovation through the mechanism of "survival of the fittest". From the aerobatic ability of flying fish to the stripes of the tiger, nature favors innovations that enhance survival and nature eliminates through extinction those innovations that do not. The predator/prey relationship is both a more critical and a more discriminating judge of strength and stamina than the natural elements alone.
Predator and prey species have developed symbiotic social relationships that make predation an even more effective tool of natural selection. Herd behavior in land animals and schooling behavior in fish act to selectively screen both the weakest prey and the weakest predators. Without herd behavior, the fleetest prey and the fastest predators would still have a statistical advantage. However random encounters could occasionally result in a sickly lion killing a fleet antelope. The mechanism of herd flight selectively moves the fittest prey to the front of the herd and the slowest prey to the rear where they fall victim to the fastest predators. Therefore nature favors methods of predation which enhance fitness in species and rewards these successful biological innovations.
Throughout the evolution of life, self-predation within animal species has been discouraged. Each species seeks to fill a biological niche based on successful predation on certain other species of plants and/or animals and successfully avoiding becoming the prey of other animal species. Survival depends on each species ability to successfully compete for a limited supply of resources. Whereas predation culls the weakest members of a species, self-predation frequently kills the strongest. In a close race for survival, the resulting debasement of the gene pool can easily lead to the extinction of a species.
Mating contests are an example of nature's avoidance of self-predation. These contest to determine the strongest or fittest males for breeding are another powerful tool of natural selection. While these mating contests must be sufficiently violent to establish the physically superior suitor, they generally stop short of death or even serious injury. Fatal contests between the strongest males would remove the fittest individuals and be detrimental to the survival of the species.
Self-predation is one of the most distinguishing behavior characteristics of our species. Since this book seeks to promote human liberty as the best prosperity enhancing strategy for mankind, we face the awesome intellectual challenge of understanding both the detrimental and the positive effects of self-predation in human history. My purpose here is not in any way to demean the noble ideals of the God given inalienable rights of man that are the moral foundation of America. Instead I seek to strengthen that foundation through an objective understanding of the advantages of human liberty. Nature favors those systems that work best to promote the survival and ultimate prosperity of a species. With 200 years of American history under our belt, we are in a strong position to defend liberty because it works not just because it seems morally right.
The prosperity of the United States of America (both in economic terms and also in human values made possible by economic prosperity) contrasted against the extinction of competing systems based on tyranny provides compelling experimental evidence that freedom works. However these data do not explain why freedom enhances prosperity or how civilization was able to progress so far under predatory social and political systems. The rest of this chapter is devoted to an overview of the evolution and effects of human self-predation.
Human self-predation likely had its roots as a form of breeding dominance behavior. Mankind evolved as a relatively small animal that required the strength of an extended family for survival. As with many other species, competition for the best territory is an important element of survival. When food becomes scarce, the human families that were able to claim or hold the best territory were more likely to survive and prosper. We are not the only species to defend territory to promote survival, but we are clearly the only species to use territorial dominance on such a large scale first through extended families then as tribes and now as nations.
Several thousand years ago, we became the first species to achieve a level of civilization based on social and technical innovation where most of the resources that we needed to prosper were the output of efforts by our own species. We used technology to accumulate wealth first in the form of stored food or herds of livestock and then later in the form of houses, clothes and a host of manufactured goods. This situation gave mankind two paths to prosperity: produce the resources we needed using our own efforts assisted by other species and the natural environment (i.e. work for a living) or prey on (steal from) our fellow man.
The principle benefit of self-predation in human society has been the opportunity and motivation for innovation. By releasing certain more able individuals from the daily chore of survival, human self-predation enabled those individuals to develop both social and technical innovations that enhanced the prosperity of the entire society. The creation of social structures, the development of written language and the knowledge of agriculture together with a calendar to guide planting are examples of the many early innovations that flowed from a leisure (i.e. ruling) class of nobles and priests. As civilization advanced, the use of warfare enabled entire nations to become affluent through predation on others. The flowering of culture and technology in Egypt, Greece, Rome and all the other great civilizations of the ancient world was made possible by the leisure time obtained through successful human self-predation.
The paradoxical rise of civilization in the face of continual warfare has been due to the strong positive feedback between war and the advance of technology through technical innovation. The development of technology through technical innovation is often an expensive and time consuming effort. In ordinary life, any investment in ability ( including innovation, education and capital investment) to enhance future prosperity reduces the resources available for consumption to support today's prosperity. Mankind's time value of money which economists tell us is about 3% + inflation limits investment to those projects that exceed this payout. However the narrow margin of victory in war together with the severe penalties for defeat provide strong incentives for developing advanced technology. Therefore throughout human history the prodigious cost of armaments and the frightful cost of their use in wars to support mankind's self-predation have resulted in a much more rapid advance in technology than would otherwise have occurred. After the war, the technology developed for war can be applied commercially to improve the standard of living with relatively little additional cost. The development of metallurgy in the ancient world (i.e from swords to plowshares) and the development of the airplane in modern times are two such examples. Clearly this technology could have been developed at far less cost without war, but without the threat (or incentive of war), the resources would have been spent on current consumption with no benefit to future prosperity.
The principle disadvantages of self-predation in human society have been the high cost to current prosperity required to enforce self-predation and the high cost to future prosperity resulting from the demotivating effects of self-predation on the victims. Human societies have developed a wide variety of mechanisms to reduce these negative effects and thereby improve the cost/benefit ratio of human self- predation. The cost of warfare was mitigated by the development of stable empires which allowed conquered peoples to live in peace in return for payment of tribute in the form of wealth or slaves. The empire also provided security in the form of military protection from other empires. While the subsequent development of colonies was a more benign form of imperialism, the basic purpose was still to achieve prosperity for the "mother" country through predation. Within societies, the development of hereditary class structures or religious castes institutionalized theft in an attempt to reduce both the cost of stealing current wealth and the demotivating effect of this theft on the production of future wealth.
The intellectual foundation for liberty as a superior prosperity enhancing strategy for mankind rests on both the decline of the advantages of human self- predation and the significant increase in its cost. Prosperity is best enhanced by maximizing the productive capabilities of the entire population. In a subsistence culture, predation permitted a few hopefully more able individuals to devote at least some of their time to improving the ability of the civilization through education and then innovation. Their predation did not deprive others of this opportunity because there wasn't enough wealth to raise the entire population above a subsistence level. Unfortunately as civilization advanced an increasing share of the proceeds of self-predation were spent on pretentious consumption. The decadence of the latter Roman Empire is an historical example. This phenomenon of excess wealth acting to reduce innovative output among the wealthy few is important. Of far greater significance, the concentration of excess wealth and power in the hands of a few individuals, deprived the majority of the opportunity to become educated and to contribute to the innovative process. These two effects, the decreased productivity of the idle rich and the unrealized talent of the rest of the society strongly favor a system which allows each individual the freedom to maximize his ability for the prosperity of the society.
The increasingly non-productive use of wealth by the ruling classes in society was mirrored by a dramatic increase in the cost of predation. Advances in military technology increased the cost of war to such an extent that military contests among near equals were no longer a net benefit to the victor. As living standards continued to increase, the benefits of predation were further reduced by the increasing impact of victim demotivation. The failure of Communism around the world is a powerful example of the failure of predation due to demotivation of the workers. When the size of the pie shrinks because the bakers are not motivated to work, cutting a larger slice still leaves the predators with a small piece.
Human liberty is an engine for prosperity in the modern world, because freedom motivates each individual to be productive for today's prosperity and to enhance his ability for tomorrow's prosperity. The standard of living is high enough today that predation no longer benefits society and the costs of predation have become unacceptable. However liberty faces two significant challenges in the modern world. First the price of liberty is eternal vigilance because mankind will always be tempted to steal whenever the cost/benefit ratio is attractive. The prevalence of both legalized and illegal theft in modern American society is a formidable threat to our future prosperity. Second the strong present mindedness of our species directs too little resources to future investment. The old saying that "necessity is the mother of invention" should be expanded to "necessity is a powerful incentive for all forms of ability improvement". The threat of predation during the Cold War has been a very effective incentive for education, investment and of course for technical innovation. Mankind needs to replace the threat of military confrontation with peaceful competition to maintain a balance between current consumption for today's prosperity and investment in ability for future prosperity.