Alfred Marshall famously insisted that economics is more like biology than physics. Societies are organic ecologies that evolve and produce organized but unplanned complexity (Hayek 1979). Although no public policy reliably produces economic growth across all ecosystems, a key element unites diverse institutions and policies that do seem to work: they all are reasonably compatible with human instinct. Institutions that build on the basic instinct for self-betterment (as in markets) have a much easier time in achieving success than institutions that oppose it (as in communism). Instincts, like gravity, are a force of nature. Adam Smith theorized, for example, that the natural propensity to “truck, barter, and exchange” initially arose not from the impulse for financial reward, but from the social urge to share beliefs and to persuade others. Exchange spurs growth because it is compatible with deep human intuitions. Sisyphus was the Greek king condemned to push a heavy rock up a hill but never to succeed. Such is the fate of modern-day Cubans, laboring under statist policies that limit their expression of the human experience through exchange.
Copyright © 2011, Independent Institute. This article first appeared in Independent Review: A Journal of Political Economy 15:3 (2011), 351-365.
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Wight, Jonathan. "Public Policy, Human Instincts, and Economic Growth." Independent Review: A Journal of Political Economy 15, no. 3 (2011): 351-65.