Lion’s four-part system for understanding how the world works
1. HBD (human biodiversity)
There are three legs to HBD;
a. Differences between races. This explains why some races underperform or overperform others in a diverse society, as well as explaining differences between nations.
This would be the least important part of HBD were it not for the fact that current moral thinking makes a huge deal out of racism. Racism is considered to be extremely evil, and different group and individual outcomes caused by HBD are instead blamed on racism.
b. Differences between men and women. Sex discrimination is also defined as evil by today’s moral arbiters, and as with racism, group and individual outcomes caused by HBD are blamed on sexism.
Additionally, because relations between men and women are such an important part of how society is organized, HBD-caused differences between men and women help to understand this part of society.
c. Biological/evolutionary basis for behavior. Our instinctive human behavior evolved to help us have as many grandchildren as possible in a pre-industrial or even pre-agricultural society. As such, they often cause illogical thinking and produce suboptimal results in a modern technological society with a post-scarcity economy.
2. Value transference. Most economists stuck in an eighteenth century mindset (when Adam Smith published The Wealth of Nations) believe that most money is earned because value is created. But in a post-scarcity economy, the majority of work is value transference work, work that doesn’t create any value but just transfers the value created by others.
As I’ve stated many times before, if you want to understand how and why businesses make a profit, don’t read an economics textbook, read Michael Porter’s book Competitive Strategy (or one of the many derivative books).
The irony of business “competition” is that businesses are competing to get themselves into a position where they have a monopoly and they no longer have to compete.
Value transference is tied to winner-take-all economics, because the natural state of things is for a small number of people and companies to be big winners based on transferring the value created by others to themselves.
3. Relative wants. It’s said that humans have unlimited wants, which is mostly true for the vast majority of people.
There’s an evolutionary basis for this. In pre-industrial times, there were often famines in which those with the least resources died, thus evolution favored the genes of those who desired and accumulated more stuff, which could then be used to barter for food in times of famine.
This is also related to our desire for status. In times of famine, the people with the highest status (the king, the people just below the king in the hierarchy, etc) were never the ones who starved to death.
Today, in the United States, no one starves to death (in fact, poor people have the opposite problem of being too fat) because the United States is a post-scarcity economy. Thus our biologically programmed desire to accumulate stuff and have higher status is a suboptimal leftover from earlier times.
Most economists fail to see or understand relative spending and relative wants.
For example, everyone (OK, not everyone, but a lot of people, especially people with a lot of resources) want a summer home in the Hamptons, but because there is less real estate in the Hamptons than there are people who want to summer there, not everyone can afford to buy a house there. And no amount of economic growth or lower taxes will ever change that. If everyone’s net income increased by 10% because of economic growth or lower taxes, then the price of houses in the Hamptons would increase proportionately, and those who couldn’t afford a house there before still would not be able to afford one.
The local governments in the Hamptons could vastly increase the number of houses by changing zoning laws, but then there would be an influx of middle-class people and it would no longer be exclusive or highly desired by the rich and they’d find some other place (for example, Martha’s Vineyard) where they want to summer but can’t afford to.
4. Religion and groupthink. Many people wrongly equate religion with belief in supernatural beings. Better definitions of religion leave out the supernatural part. Here’s a suggested definition: “A cultural system of beliefs, behaviors, practices, ethics and societal organization that relate humanity to an order of existence.” In pre-scientific times, religious thinking tended towards belief in and worship of supernatural beings, but use of the word “supernatural” is our way of looking down on others. Believers in religion don’t see their beliefs as “supernatural,” they just see the true way that things are (from their perspective).
Religion is obviously a behavior that is programmed into us by evolutionary biology. So just because a large percentage of people in developed nations reject the traditional religions like Christianity (because they just seem too stupid in light of our modern scientific understanding of the world) doesn’t mean they have ceased religious thinking. The religious thinking is just diverted into other beliefs that currently are not classified as “religion” because they don’t involve worship of supernatural beings.
Belief in global warming is an example of a post-supernatural religious belief.
Groupthink is the tendency for people to believe whatever other people believe. It’s why people believe in religion (everyone else believes in it so it must be true!), but explains a lot more than religion. Groupthink is only obvious to outsiders. Insiders, who believe the groupthink, don’t realize it’s groupthink.
There are some rare individuals, like myself, who think a lot more logically than the average person and are highly resistant to groupthink. Although even I once succumbed to believing in libertarian economics, which is definitely a form of religious thinking.