the official site of Michael Shermer

Evolutionary economics explains why irrational
financial choices were once rational

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…)

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…)

During his book tour Michael Shermer visited the offices of Reason magazine, who have recently added Reason.TV to their media package, a project helped launched by Drew Carey, who turns out to be a big fan of Skeptic magazine and all things skeptical. In this interview Reason magazine editor Nick Gillespie interviews Shermer on his new book, The Mind of the Market.

The new science of neuroeconomics offers
new insights into old political problems

The 19th-century French economist Frederic Bastiat expressed a principle applicable in the 21st century: “Where goods do not cross frontiers, armies will.”

In my new book, The Mind of the Market, I describe in detail how in the modern world of nation states, economic sanctions are among the first steps taken by one nation against another when political diplomacy fails, as when the United States enforced them on Japan after its invasion of China in the 1930s, and these became a prelude (among other factors) to Japan’s retaliatory bombing of Pearl Harbor in 1941 and our involvement in the greatest war in history. More recently, economic sanctions were imposed by the U.S. and Japan on India following its 1998 nuclear tests, and more recently by the U.S. on Cuba, Iran, and North Korea. (continue reading…)

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About the book

How did we evolve from ancient hunter-gatherers to modern consumer-traders? Why are people so emotional and irrational when it comes to money and business decisions? Bestselling author Michael Shermer believes that evolution and evolutionary psychology provides an answer to both of these questions through the new science of evolutionary economics. (continue reading…)