Logic of the Caveman and the Classical Liberal
Tribal instincts are useful, but not all the time.
For most of human history, our species lived in tribes or groups of large families. Our brains became quite good at remembering and analyzing the actions of 50-100 people. Subconsciously taking note of the actions of more people would require more brain capacity, and with finite resources, our brains arrived at an optimum that was well suited for analyzing cause and effect in our limited social circles.
Because our brains are optimized for tracking the behavior of 50-100 people, many of our logical conclusions regarding social order resemble the logic of our cavemen ancestors. The logic of the caveman is what we may call common sense, or perhaps even streets smarts. It appeals to intuition and instinct. I do not use the term “caveman logic” to be derogatory, though it admittedly sounds like like a descriptor of something unintelligible. Rather, it is the uncomplicated thought processes that enabled the survival of our ancestors in the past and continue to ensure success in our daily interactions. Caveman logic derives primarily from what we sense happening in our limited interactions with the other humans around us.
As our species developed civilizations where millions of people interact, trade, and learn from each other, our brain capacity did not expand in order to track the movements and behavior of these millions of people to discern cause and effect. It wasn’t until the Enlightenment period that philosophers began to observe and understand the complex, non-intuitive, and self-organizing nature of large societies.
Rather than explain social phenomena with the instinctive caveman logic, these studies sought explanations with a new way of thinking, a “liberal logic.” The classical liberal movement recognized the spontaneous order that arose in complex societies which observed the rule of law. When left free and held accountable for their actions, humans are capable of finding ways to produce, trade, and organize without the influence of a central authority.
Whereas the caveman logic relies primarily on what is seen and intended, the liberal logic recognizes that in complex social systems there is much that is unseen and consequences that are unintended. Caveman logic requires determining effects from immediate causes, whereas liberal logic recognizes that effects stem from various causes, and that there are no solutions, only trade-offs.
I don’t think it is right to assume that liberal logic is somehow better than caveman logic. For instance, some free market enthusiasts deduce that since greed can motivate a businessman to create more wealth which not only enriches himself but also countless others, then greed must be good. Greed may not be a vice when it comes to the complex interactions of a market economy, but it is a great way to destroy relationships within a person’s limited social circle.
When it comes to working on a team, discerning the behavior of your friend, or trying to find the best deal, caveman logic is the way to go. Those are the situations where your intuition and street smarts can come in handy. But when it comes to analyzing the effects of price controls, minimum wage laws, or Keynesian monetary policy, the liberal logic ought to prevail.
For further reading, check out this article by Don Boudreaux: Smithian and Anti-Smithian Economists