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The Mind of the Market
(Shermer on Explorations KPFK FM)

February 2008

Michael Shermer discusses his new book The Mind of the Market: Compassionate Apes, Competitive Humans, and other Tales from Evolutionary Economics on Explorations KPFK FM.

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The Mind of the Market

February 2008
Evolutionary economics explains why irrational
financial choices were once rational
magazine cover

Since 99 percent our evolutionary history was spent as hunter-gatherers living in small bands of a few dozen to a few hundred people, we evolved a psychology not always well equipped to reason our way around the modern world. What may seem like irrational behavior today may have actually been rational a hundred thousand years ago. Without an evolutionary perspective, the assumptions of Homo economicus — that “Economic Man” is rational, self-maximizing, and efficient in making choices — make no sense. Take economic profit versus psychological fairness as an example. (continue reading…)

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Faith Healing

February 2008
A torrid tale of quackbusting in 1920s America
sheds light on modern medical scares
book cover

A review of Pope Brock’s Charlatan. America’s Most Dangerous Huckster, the Man Who Pursued Him, and the Age of Flimflam.

Human cognition has a problem — anecdotal thinking comes naturally whereas scientific thinking does not. The recent medical controversy over whether vaccinations cause autism illustrates this barrier. On the one side are scientists who have been unable to find any causal link between the symptoms of autism and the vaccine’s ingredients. On the other are parents who noticed that shortly after having their children vaccinated autistic symptoms appeared. (continue reading…)

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Why People Don’t Trust Free Markets

January 2008
The new science of evolutionary economics offers an explanation for capitalism skepticism

In his magnum opus on the power of free markets, Human Action, the Austrian economist Ludwig von Mises noted: “The truth is that capitalism has not only multiplied population figures but at the same time improved the people’s standard of living in an unprecedented way. Neither economic thinking nor historical experience suggest that any other social system could be as beneficial to the masses as capitalism. The results speak for themselves. The market economy needs no apologists and propagandists. It can apply to itself the words of Sir Christopher Wren’s epitaph in St. Paul’s: Si monumentum requires, circumspice.” If you seek his monument, look around. (continue reading…)

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Authors @ Google presents Michael Shermer

January 2008

Michael Shermer discusses his book The Mind of the Market as part of the Authors @ Google series.

How did we evolve from ancient hunter-gatherers to modern consumer-traders? Why are people so irrational when it comes to money and business? Dr. Michael Shermer argues that evolution provides an answer to both of these questions through the new science of evolutionary economics. Drawing on research from neuroeconomics, Shermer explores what brain scans reveal about bargaining, snap purchases, and how trust is established in business. Utilizing experiments in behavioral economics, Shermer shows why people hang on to losing stocks and failing companies, (continue reading…)

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