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Economics Is Everywhere
How all of life is shaped by the fundamental equation of cost versus benefit
When economics is taught in academia it generally focuses on the narrow topic of exchange. Theories of value are discussed, general ideas such as comparative advantage are presented, and students ponder over asset-pricing models and balance-of-trade considerations. Which is lovely, but it’s like treating the mechanisms of evolution as though they only applied to the genes of fruit flies. When we step back from the conventional way of thinking about economics we discover that it sheds light on why things are as they are across all of nature.
All organisms from the simplest single-celled bacterium to the bipedal ape we misnamed homo sapiens have to solve one fundamental problem above all others: how much of one’s extremely constrained energy supply does one put into a particular adaptation? Just as in an ideal world we’d all have multiple mansions and countless private jets and an endless array of expensive status-advertizing items like supercars, yachts, and trophy partners so too in an ideal world creatures could invest in a wide range of traits that have minimal utility. After all, one can only live in a single mansion at any point in time and only sip champagne in one private jet in any given moment. Moreover the running costs of vast mansions and a fleet of private jets rapidly outstrips their supposed asset value, never mind their value as signifiers of status. If you can’t impress a potential mate with one Bugatti Chiron it’s doubtful that having three will make much difference. Likewise, what would be the value to an elephant of decorative wings versus the real-world costs of maintaining them free from parasites, physical damage, and so forth?
In the real world, we’re constrained by hard limits. Billionaires are less constrained than wage-slaves but they do not enjoy limitless possibilities. When it comes to non-human life, the constraints are even more firm. For every calorie expended there must be some significant value delivered. This is the basic economic equation of all life. If a bacterium expends more energy engulfing a particle of food than it derives from ingesting that particle, extinction looms. This iron rule operates wherever molecules gather together in complex patterns in order to…
