The Mind of the Market: Compassionate Apes, Competitive Humans, and Other Tales from Evolutionary Economics

by Michael Shermer

Bestselling author Michael Shermer explains how evolution shaped the modern economy--and why people are so irrational about money How did we make the leap from ancient hunter-gatherers to modern consumers and traders? Why do people get so emotional and irrational about bottom-line financial and business decisions? Is the capitalist marketplace a sort of Darwinian organism, evolved through natural selection as the fittest way to satisfy our needs? In this eye-opening exploration, author and psychologist Michael Shermer uncovers the evolutionary roots of our economic behavior.

Drawing on the new field of neuroeconomics, Shermer investigates what brain scans reveal about bargaining, snap purchases, and establishing trust in business. He scrutinizes experiments in behavioral economics to understand why people hang on to losing stocks, why negotiations disintegrate into tit-for-tat disputes, and why money does not make us happy. He brings together astonishing findings from psychology, biology, and other sciences to describe how our tribal ancestry makes us suckers for brands, why researchers believe cooperation unleashes biochemicals similar to those released during sex, why free trade promises to build alliances between nations, and how even capuchin monkeys get indignant if they don't get a fair reward for their work.

Genres: Economics, Science, Nonfiction, Psychology, Business, Finance, Evolution

336 pages, Hardcover

First published December 26, 2007

About the author

Michael Brant Shermer (born September 8, 1954 in Glendale, California) is an American science writer, historian of science, founder of The Skeptics Society, and Editor in Chief of its magazine Skeptic, which is largely devoted to investigating and debunking pseudoscientific and supernatural claims. The Skeptics Society currently has over 55,000 members.

Shermer is also the producer and co-host of the 13-hour Fox Family television series Exploring the Unknown. Since April 2004, he has been a monthly columnist for Scientific American magazine with his Skeptic column. Once a fundamentalist Christian, Shermer now describes himself as an agnostic nontheist and an advocate for humanist philosophy.


more info:
http://us.macmillan.com/author/michae...

http://en.wikipedia.org/wiki/Michael_...

Reviews

[Erika RS · Rating 2 out of 5]

I do not regret reading this book, but I did not like it. It did not meet my expectations. I expected a discussion of, well, how our economic lives are shaped by biology and psychology. What I found was a standard (and compared to other books, less engaging) presentation of many common ideas from experimental psychology. Rather than a general discussion of economics and psychology, Shermer focused on a narrow point: human beings are not the rational creatures that economists assume we are. This is an excellent point, but others have made it better (such as Sunstein and Thaler in Nudge).

The book has a couple other limitations. The author mixes experimental psychology and evolutionary psychology. Evolutionary psychology has its place; it is certainly interesting to think about why different psychological states evolved. However, it tends to be highly speculative, at least in popular presentations, and I tend to be wary of arguments which depend on it.

The other limitation is that Shermer is a bit too eager to support his libertarian ideology. He makes statements which imply that the psychological tendencies he discusses support this economic ideology. However, the points he makes are so general that to claim them in favor of a particular ideology weakens the whole book.

For example, Shermer shows that trade has a psychological purpose (establishing trust and bonding) as well as an economic one (providing goods not otherwise available). This is a fascinating point, and I would have liked to see the consequences explored at length. Instead, Shermer jumps straight from there to the conclusion that the best economy is one based on completely unregulated free trade. Such an over generalization undermines Shermer's original insight.

All in all, this book stimulated some thinking, but I would not read it again.

[Bob · Rating 3 out of 5]

I am a fan of Michael Shermer, but feel this was not his best work. A lot of the information in this book is a re-telling of what he's already written, and then attempted to tie into economic theory (see The Science of Good and Evil). I don't feel he made his thesis very strongly; in fact, I was left wondering what his thesis was. Some of his conclusions about free markets were not made as strongly as they could have been, and I never felt the tie-in between personal decision making and the overall "complex emergent" market was made. In other words, he did a great job showing how people behave individually (usually poorly, or at least not how they THINK they are behaving), but what does that mean for the market? How SHOULD markets be regulated or not? With this understanding, how should I behave to take advantage of this understanding? He never goes there. Overall, worth reading, but I think Beinhocker's "The Origin of Wealth" was much stronger.

[Sariene Jones · Rating 3 out of 5]

This is pretty good book, once you get past the first few chapters.

I do wish Shermer would stay off of idealogical discussions. The first few chapters of the book are consumed by a near-rant about how capitalism is the bestest ever. But Shermer falls prey to a common problem in the libertarian wing of the skeptical movement, where ideology is concerned he is as guilty of cherry-picking the arguments as anyone else. It never fails to disappoint me since he is otherwise a champion of identifying and rooting out our psychological biases. Just not when it's HIS worldview at issue.. I'm not anti-capitalist, I just didn't think his argument was useful to the book, or well written. It was more a one sided, poorly argued value judgement than a scientific evaluation, which is what I read Shermer for.

However, once he moves on from there it's not a bad book. He gets into a discussion of the psychology which motivates people's economic decisions, and psychology (not philosophy) is where Shermer shines. I don't think he added anything in this book that I hadn't already read, but it was a decent treatment of the subject anyway. And he even manages to wade into discussions of the theoretical evolutionary basis for the phenomena he describes without getting his boots completely covered in the just-so B.S. that is 90% of modern evo-psych.

[Chris Brownell · Rating 3 out of 5]

His work on cognitive biases is worth understanding, and he has a novel approach to thinking about economics. He does echoe a common theme of death to the theory of Homo Economicus. Through his attacks on the rationality assumption of humans. We make decisions for all sorts of irrational reasons, these seem to be unavoidable but hopefully they can be minimized in practice.

If you read this book there is little need to read his other title: The Believing Brain which contains a good deal of similar information with a moderate twist as to why humans believe, and what are the neuro-chemical mechanisms of belief.

[Josh · Rating 3 out of 5]

This is a somewhat strange book, as it was written by an Ayn Rand libertarian, yet focuses on the findings from behavioral economics that in my mind show the idiocy of libertarian economics. Ayn Rand thought altruism was a swear word and greed the highest moral value, yet behavioral economists confirm what all non-economists already knew--most people are indeed social animals who care about each other, frequently cooperate, and often sacrifice their own welfare to help others. The coverage of behavioral economics is good, but the author's own contributions strike as somewhat schizophrenic.

[Muhammad Shalaby · Rating 4 out of 5]

الكتاب رائع وانا استمعته صوتي مثير للتساؤلات ومنشط للذهن الاقتصادي
يشرح الكثير من العوامل النفسية والمنطقية والعصبية خلف الاقتصاد
منحاز جدا لاقتصاد السوق وان كان هذا ليس عيبا من وجهة نظري
الأمثلة حية وواقعية ومدروسة بالتفصيل
الكتاب الصوتي بصوت المؤلف نفسه ولذلك يحمل نبرة اقتناع واقناع

يعيبه أنه يعتمد كثيرا على نظرية داروين

[Karen · Rating 2 out of 5]

This was the first title for a new book club that I did the first review for. If you are interested in keeping up with the discussion that follows, you can visit the International League of Skeptics, and the book discussion thread.

Long Story Short: This is a book about, variously, the free market, evolutionary psychology, and economic decision-making that has only one chapter devoted to the main premise of the book.

The Book’s Strengths: Shermer has written a book about economics and trade that explores many different aspects of the producer to consumer process. He fills it with interesting anecdotes about how some products make it to market, how government can affect what gets produced, and how people behave with their money. As a non-economist (and not even a market aficionado) I appreciate the accessibility of his examples and explanations. He makes the nuances of economics—to the extent that nuances can be presented in such a short book for general readers on an offshoot topic—very understandable. I particularly appreciate his explanation of “folk economics,” or how thinking on a short-term, personal level about money can be exactly the wrong thing to do. I am guilty of not thinking about money sufficiently, and I am glad now to have some insight why. At the very least, he has made me interpret conversations I have or hear about money with more knowledge of where my ignorance is, which is stage one of fiscal empowerment (I guess).

Shermer has also filled the book with references to economists and psychologists, people who have theorized and analyzed market movements since the Enlightenment Era and people who are studying human behavior within controlled scientific experiments and with modern, technological tools. You understand everything as you read it, which is great, and you come away with some urban myths debunking and some cool soundbytes of data, such as the QWERTY keyboard wars and the invention of the gel-filled bicycle seat. Shermer’s writing style is interesting and well-paced, the prose is clear and optimistic, and it is a good voice to hang out with.

The Book’s Weaknesses: This is a volume that does not hang together well. I am sad about this. It is also a book that is not really about what it purports to be about, which is very disappointing. We don’t really get an analysis—scientific or otherwise—of why “the market” behaves as it does, and the few glimpses we get of why consumers do what they do are not big picture stuff. I don’t want to blame Shermer for things that maybe the marketing department at his publishing company did, and I don’t want to speculate (not with specifics, anyway) on how much of the book was actually written before he contracted with Holt, but it is absolutely not what I thought the book would be about. Let’s start with the publisher’s book description. Yeah, yeah, I know that the author does not creating marketing copy, but looking at it goes a long way towards explaining my mild annoyance at falling victim to a bait and switch:

Michael Shermer…shows how we made the leap from ancient hunter-gatherers to modern consumers and traders and how the capitalist marketplace thrives as a sort of Darwinian organism, evolving through natural selection as the fittest way to satisfy our needs.

It’s flashy and engaging, but it’s not that different from the purpose of the book that Shermer establishes in the prologue:

Markets that traffic in rankings, ratings, and bestseller lists seem to operate on their own volition, almost like a collective organism. In fact, this is only one of many effects we shall see in this book that demonstrate just how much the mind influences the market, and in a broader sense how markets seem to have a mind of their own.

These two paragraphs are broad enough that you could say I was being too picky, that I misinterpreted the whole thing, and the book does meet these established goals, but I remember Michael Shermer’s podcast/interview rounds. I heard him in a couple different venues, and he talked up a different book than I read. This is not a book that explains the kind of large population trends that shift the balance between consumers and producers, and the gains in status and desirability that explain how some perfectly good (nay, superior) products fail against lesser competitors. I expected more on advertising, and communication, and the globalization of culture, and how people behave, and I guess book a lot more like Robert Wright’s Non-Zero in economics form than this one. I honestly don’t know if a book like the one I envisioned could be written, but I had high hopes. (Did I already say that? Believe you me, they were high.)

There was one chapter that met all my expectations. It was a great chapter. Right smack in the middle of the book, Chapter 6: “The Extinction of Homo Economicus” was exactly what I wanted. It gets into the brain scans, and the primates, and the psychology experiments, and the analysis, and the commentary, and the bigger picture things that I really was looking forward to. I know exactly why he was pimping this chapter in the interviews, though—it contained all the good parts. It actually addresses 1) the mind, 2) market interactions, 3) monkeys, and 4) real world examples. Who doesn’t love monkeys? And fancy fMRI machines? And brain science?

The eleven chapters do not follow this template. The first few chapters—a good quarter of the book—are reasonable, persuasive arguments for how the free market will save the world. It’s a Libertarian plug. It’s not even an obnoxious Libertarian plug, but it doesn’t really address the stated purpose of the book, except in the most incidental ways with a couple references here and there obviously tacked on to remind people they are reading a book about psychology and evolution, too. There are chapters about virtue, and happiness, and trust, and other non-market things that only at the last minute tie into the topic of the book. I was patient with the beginning, and was rewarded with Chapter 6, but when the subsequent chapters left the plan again I really started getting antsy. I had a hard time focusing on anything after the first half of Chapter 9: “Trust with Credit Verification.” Then the book wrapped up with more arguments for unencumbered free markets. Like I said, they were good arguments, but that’s not what the book set out to cover. It’s really just one big tangent.

What Should Have Happened: If Michael Shermer really wanted to write a series of short articles addressing the psychology of humans, he should have. The book already has the words “Tales from” in the title, and if people knew in advance they were getting a loosely related collection of tales about evolutionary behavior, they would probably like it. It would have saved him from reaching as far as he did to make an economic point just to prove he’s writing a long text and assembling an anthology. I mean, come on. The About Schmidt and the Ndugu Effect conclusion to Chapter 7: “The Value of Virtue” was a reeaaall stretch. I think, however, that publishing a book about “Evolutionary Economics” sounded new and fresh, whereas a book about evolutionary psychology or sociobiology or whatever you would call these chapters would not stand out.

Short Story Shorter: I would not recommend this book. It is too muddled.

[Liquidlasagna · Rating 1 out of 5]

you may call it utter bullshit, but i call it a manifesto of libertarian neuroeconomics, okay, you're right, it's junk....

probably his finest book

to prove he's a crackpot of the highest order

..........

Amazone

A Clear Lack of Skeptical Thinking

Michael Shermer's new book The Mind of the Market has a jacket blurb of praise from no less than Dinesh D'Souza.

On this topic they seem to share the same religion.

In my view if Dinesh D'Souza is agreeing with you, it's time for a reevaluation.

Shermer, who is most well known as a skeptic who debunks various forms of religious and new age nonsense, should have applied his critical thinking skills to writing this book.

But when it comes to the so called free market and capitalism, DR Shermer leaves these skills at home.

Even more disturbing, DR Shermer dresses up his ideology in the garb of science.

Shermer expresses views which are quite extreme in parts, for example he asserts trust busting is "immoral.

There is little in his book about the subversion of democracy by concentrated wealth, or about the market based health care in the United States which is not only low quality and over twice as expensive as socialized health care systems in other countries but leaves over 50 million Americans without health care insurance at all.

Nor does he spend much time on the near economic Meltdown or our current insolvable job market problem, a direct result of so called free trade, the hunt for the cheapest and most oppressed labor multinational corporations can find.

Nor does he address the issue of exploding inequality which is now exceeding the levels of the gilded age.

It's clear that inconvenient facts are simply ignored by DR Shermer.

Shermer is a skilled writer so the book is no chore to read if you can stand its lack of balance in dealing with such an important subject.

In my opinion, DR Shermer could have written a much better book defending his economic views and a market economy if he would have actually considered the real world average people live in, a world that DR Shermer apparently knows very little about.

---

Shermer's "Blindspot": Certainty in Evolutionary Psychology.

A few years ago, I read Shermer's "Science of Good and Evil," in which he explains how evolutionary psychology can explain human's moral natures.

The issue I had with that book is very much the issue I have with this one, which uses evolutionary psychology to explain human economic behavior (particularly in markets).

The fact is that Shermer bases just about everything in both books on a very tenuous "science" of evolutionary psychology and where Shermer is very skeptical when it comes to many things, he is probably more accepting of evolutionary psychology explanations (which are generally "could be" propositions that Shermer takes as "is" propositions.)

While I don't have any major qualms with evolutionary explanations for behavior, the problem is that evolutionary explanations of behavior are not empirical as are evoluitonary explanaitons of physical structures.

Many times in the book, Shermer says things like, "We know we have x tendency. The reason this strategy evolved IS..." instead of, "This could have evolved in humans because..."

With every page, I had to ask myself why a careful skeptic like Shermer chose to write a book based on a very tenuous and tentative "science" that he unskeptically takes as unquestioned fact?

Beyond this, I must confess that the thesis of the book seems quite jumbled: sometimes, it seems like Shermer is suggesting an analogy between the market and biological evolution.

Other times, it seems that Shermer is making the case that human psychology functions best in a market system.

Other times, whole chapters are devoted to discussing asides like why humans are not quite the rational actors that "rational choice theory" has us believe, without so much as telling us where this ties in to Shermer's story.

The upside is that the book is very interesting. As usual, Shermer is a great popularizer and summarizer, interspersing theory with fascinating anecdoes (both personal stories and recounting others' experiments).

In the end, though, I must caution readers against the book owing

(a) to usually-skeptical Shemer's unquestioning reliance on the very tentative ideas of evolutionary psychology for the bulk of the book; and

(b) to the book's lack of any real clear thesis, instead having a very disjointed and hurried feel.

Kevin Currie-Knight

---

A Look at Scientific Arguments in Favor of Libertarian Governance

I don't recall a book that relies so heavily on scientific studies from so many fields to make a case for free markets with minimal government intervention. If you are not familiar with the latest in brain science and evolutionary biology, The Mind of the Market is a good review.

The main argument falters because clearly Mr. Shermer is doing his best to justify what he already believes.

He draws the conclusion from the evidence that makes the best case for his ideas, rather than trying to sort out the good and the bad and the ugly from one another.

As an example, he hasn't seen a nongovernmental monopoly he doesn't like... and doesn't bother to mention the benefits that customers have gained when such monopolies have ended.

To make his case for monopolies resulting from aggressive competition, he has to argue that only near-term dollars and cents for customers count... while leaving out the harm from the dislocations that occur in non-economic terms and the potential longer-term benefits of having more competitors.

This suggests that predatory pricing to eliminate competitors is a jim-dandy idea even if it leads to artificially higher prices later on after there are no competitors left.

He also feels that biology is destiny.

Apparently, we should not expect to behave better than what our bodies encourage.

But if that were true, then almost everyone who can be addicted would be addicted... and would simply focus on supplying and abusing the addiction. But clearly, most people don't do that.
It's fun to read what he has to say...but don't take it seriously.

Donald Mitchell

...........

Journal of Evolutionary Psychology

The Mind of the Market has three important flaws, rendering it less effective than it
might otherwise be:

1. It contains very little new information or novel substantive insights. In most instances, the topics addressed have been covered by countless other scholars. The great majority of trade books within this niche seek to link the relevant scientific findings to their instantiations in everyday life.

2. Several literature streams that would have otherwise been germane to the book’s central points were completely ignored. I fully realize that it is facile to identify topics that could have been covered in a given book but were overlooked. In most instances the author must make choices that delimit the scope of topics to be addressed. That said, some issues seem so conspicuous in their absence that it becomes difficult not to raise the issue. For example, a natural bridge between economics and evolution can be found in the way the definition of rationality has evolved over the past five decades or so: beginning, for example, with the classic normative form of rationality implied in Homo economicus, proceeding to bounded rationality as expounded by the Nobel laureate Herbert Simon, and finally to ecological rationality as developed by Gerd Gigerenzer, Peter M. Todd, and their colleagues at the Max Planck Institute for Human Development (cf. Gigerenzer, Todd, and the ABC Research Group, 1999). Notwithstanding one cited paper in the notes on p. 289 that has “ecological rationality” within its title, Shermer has otherwise ignored this natural bridge between economics and evolutionary theory.

3. The order in which topics were covered was largely disjointed. At times, it seems as though subjects were tackled in the order in which they popped into the author’s head. Furthermore, some discussions were painfully long, such as the QWERTY “typing” example, as well as Shermer’s fascination with the biking industry. His book would have been well served by some trenchant editing.

a. How the market has a mind of its own—that is, how economies evolved from hunter-gathering to consumer-trading.

When discussing new products, Shermer provides a discussion of continuous versus discontinuous innovations (p. 61), a distinction that has been addressed in the new product development literature for well over three decades. Similarly, the distinction between cultural and biological evolution has been central to the work of Robert Boyd and Peter Richerson also for close to thirty years (cf. Richerson and Boyd, 2005).

b. How minds operate in markets—that is, how the human brain evolved to operate in a hunter-gatherer economy but must function in a consumer-trader economy.

The same problem arises; namely, Shermer covers issues that have already been addressed by innumerable scholars. For example, game theorists have published endless papers on Pareto optimality, evolutionary stable strategies, and the benefits of the tit-for-tat strategy when playing the repeated interactions version of the Prisoner’s Dilemma. As such, Shermer has not contributed any new insights.

To provide a second example, the long discussion of behavioral decision theory (BDT) is tired and redundant.

On this point, Haselton and Nettle (2006) demonstrated the evolutionary roots of a wide range of cognitive biases that arise within the BDT research stream whereas Wang (1996) applied a domain-specific perspective in his exploration of framing effects. Shermer appears to be unaware of their work.

The reality is that several evolutionary behavioral scientists have demonstrated the relevance of evolutionary psychology to cognitive neuroscience in general (cf. Platek, Keenan, and Shackelford, 2007) and in business-related disciplines in particular (see Garcia and Saad, 2008, for a review of such works).

Notwithstanding his tackling of the BDT and fMRI literatures, he has ignored a tremendous amount of relevant research that has been conducted over the past fifteen years specifically at the nexus of consumption and evolutionary theory. Whereas I regret to engage in self-promotion, I have spent more than a decade combining evolutionary psychology and related Darwinian principles with the study of consumption, culminating in my book, The Evolutionary Bases of Consumption (Saad, 2007). Several other evolutionary psychologists have also been working recently along these lines, including Vladas Griskevicius, Jill Sundie, Geoffrey Miller, and Siegfried Dewitte. The economist Robert H. Frank has written several books with tinges of evolutionary-based theorizing. In addition, Geoffrey M. Hodgson and Thorbjørn Knudsen have published numerous papers at the intersection of evolution and economics, several of these in the Journal of Evolutionary Economics. Yet Shermer ignores all of these highly relevant works.

Notwithstanding his tackling of the BDT and fMRI literatures, he has ignored a tremendous amount of relevant research that has been conducted over the past fifteen years specifically at the nexus of consumption and evolutionary theory.

Whereas I regret to engage in self-promotion, I have spent more than a decade combining evolutionary psychology and related Darwinian principles with the study of consumption, culminating in my book, The Evolutionary Bases of Consumption (Saad, 2007).

Several other evolutionary psychologists have also been working recently along these lines, including Vladas Griskevicius, Jill Sundie, Geoffrey Miller, and Siegfried Dewitte. The economist Robert H. Frank has written several books with tinges of evolutionary-based theorizing. In addition, Geoffrey M. Hodgson and Thorbjørn Knudsen have published numerous papers at the intersection of evolution and economics, several of these in the Journal of Evolutionary Economics.

Yet Shermer ignores all of these highly relevant works.

c. How minds and markets are moral—that is, how moral emotions evolved to enable us to cooperate and how this capacity facilitates fair and free trade.

Much of the discussion regarding the third objective, the demonstration that both human minds and markets are moral, is equally old news, some of which Shermer has already covered quite extensively and ably in his earlier writings. Included here are discussions of our evolved morality, meat sharing (and related cooperative behaviors), reciprocal altruism, cheater detection including the Wason selection task, costly signaling, primate politics, tribalism and xenophobia, the evolutionary roots of Theory of Mind, as well as the evolutionary bases of good and evil. Also, notwithstanding the evolutionary twist that Shermer provides, going over the Zimbardo and Milgram experiments is, frankly, old news indeed.

I conclude with a few observations about Shermer’s apparent ideological bent in support of free markets.

I see no problems with an author expressing his worldview, especially when writing to a mass readership.

That said, I would be interested to know Shermer’s position regarding the recent financial crisis, with its corresponding $700 billion bailout.

It would appear that free markets are not guarantors of a reliable banking system (see p. 179)!

Nor was I particularly moved by his endorsement of so-called libertarian paternalism.

In my opinion, it smells of the old “economics of information” approach to social marketing.

The argument goes that if individuals engage in behaviors that yield deleterious consequences, it must be because they did not know any better.

Provide them with the relevant information to make “optimal” choices, and they will desist from irrational behaviors.

Hence, in my opinion, libertarian paternalism remains a rather condescending ideology in that it assumes that individuals should be granted all necessary freedoms, albeit big poppa government should look over its “children” as we are otherwise too stupid to make informed decisions.

This patronizing premise is precisely the reason that most public service announcements are structured around the provision of information.

(e.g., “Unsafe sex leads to sexually transmitted diseases,” “A sedentary life with poor dietary choices results in obesity,” “Exposure to the sun can result in melanoma”)

The reality is that individuals engage in such behaviors knowing full well the consequences of their actions (see Saad, 2007, chapter 6 for Darwinian explanations of dark side consumption).

Returning to Shermer’s support of free markets, it is interesting to note that toward the end of the book, he proclaims (p. 259), “There is nothing natural about a free economy, and there is nothing inevitable about human groups evolving toward a free market.”

This reminds me of the quote attributed to E. O. Wilson wherein he remarked about communism/Marxism: “Great idea. Wrong species.”

Finally, in hailing the benefits of democracies, Shermer states (p. 251), “One of the prime triggers of between-group violence is competition for scarce resources.”

would add: yes, over women, as much intergroup activity in our evolutionary history revolved around either the violent usurping of women from other groups, or the trading of women between groups via the use of interconnected marriages.


Shermer’s book... contains few novel insights and is somewhat incomplete in covering the relevant literature streams at the nexus of economics and the various Darwinian frameworks.

---

Dan Schneider
Cosmoetica

My personal distaste for the book’s politics, and despite its claim to be a book on economics, politics kyboshes too many of the biased claims Shermer makes, for it is a political book, first and foremost...

In this regard, The Mind Of The Market is a weird amalgam of Libertarian canards (Shermer’s political bias and shilling was evident before page 5, although it took page 90, or a third into his 261 page book to admit the manifest) and bleeding heart fallacies, a sort of pseudo-philosophy, not pseudo-science, although one might term it a quasi-scientific book.

And, one need only look at some of the precepts of modern, capital L Libertarianism to recognize it is yet another form of political extremism vs. small l libertarianism’s often sensible and moderate approach to matters.

This chapter- indeed, this entire book- is not just descriptive of the way the world works, but it is also proscriptive of the way the world should work...

Now, let that sink in. Really! This is a de facto abdication of all objectivity.

I would also like to see Shermer empirically test out the drive for purpose that evolution created, but that would require a way to test the subjective purposivenesses of individuals. And I’m thinking of entering next year’s Miss America beauty pageant. Then, the Moral Evolutionary Pyramid? Has he been watching too many Tony Robbins, Marianne Williamson, or Wayne Dyer video cons? And this from the premier debunker of hokum in our time? This reads far more like the divinations of believers in that other Pyramid based theory- Pyramid Power!

At least, almost two thirds of the way into the book, Shermer has the decency to admit what this book’s real purpose is. Unfortunately, it also wholly removes the book from any scientific underpinning, as if his economics-based ideas had not already given the astute reader a clue.

What The Mind Of The Market is, in reality, is a secular humanist manifesto that bizarrely tries to wrangle that idea onto a foundation of economic sophistry. Why?

To start with, Shermer makes two costly dialectic errors right off the bat.

The first is his constant invocation of morality in economic choices.

This is especially troubling coming from a well known atheist, as colloquially speaking, morality is a set of rules derived from a ‘higher authority,’ whereas secular ethics emanate from within an individual.

Thus, trying to connect a term like morality to a secular endeavor like economics raises questions, not the least of which is what bias is Shermer operating from?

This is a tipoff that more emotion and less logic are forthcoming.

The second flaw comes on page 5 of the prologue when Shermer tries to conflate economics into a real world hard ‘science.’

Yet, Shermer reveals his Libertarian bona fides by trying to define economics as ‘a self-organized emergent property of millions of people pursuing their own self-interests...' etc.

[Eva · Rating 3 out of 5]

Some notes, before I quit the book:

The banker's paradox says only the rich can get loans, but the rich aren't the ones who need them. So is friendship the same way, with people abandoned when they're down on their luck? To a degree, but insofar as a friend is reciprocally invested in helping you, he has value to you.

The average Yanomamo village has about 300 unique items, whereas the "village" of Manhattan has 10 billion--33 million times as many. - p2

Average annual income is growing at an accelerating rate: It took 97,500 years to go from $100 to $150 (1000 BCE), 2,750 more to go to $200 (1750), and 250 more to go to $6,600 (2000). - p3

"Path dependency" or "historical lock-in" describes how what the design of something is not necessarily optimal or deliberate, but the necessary product of its peculiar history. Ex: the panda's thumb (actually a wrist bone) and the qwerty keyboard. - p47

Cues that indicate deception "are less likely to be expressed if you actually believe the lie yourself. This is the power of self-deception, which evolved in our ancestors as a means of fooling fellow group members who would otherwise catch our deceptions." - p69

"In one [survey] of 829,000 high school seniors, 60% put themselves in the top 10% in 'ability to get along with others,' while 0% (not one!) rated themselves below average." - p72 (I guess I would have been the 1 in 829,000!)

"Studies have found that women in their forties believe they have a 1 in 10 chance of dying of breast cancer, while their real lifetime odds are more like 1 in 250." - p79 (This is not helping the stereotype about women and math.)

The peak-end rule: "We judge a past event almost entirely on how the experience was at its peak and its end--whether pleasant or painful--instead of a net average." - p109

"As the evolutionary psychologist Steven Pinker likes to say, the number one predictor of crime and violence is maleness." - p122

[E · Rating 5 out of 5]

Evolutionary perspectives on economics

This is a lively, entertaining, useful and uneven work. Author Michael Shermer ranges over an array of disciplines to synthesize current understanding of the intersection of economics and evolution. He defines and debunks homo economicus, or the economic man, a theoretical creation who behaves in a purely rational fashion. Shermer weaves personal experiences with interviews of researchers, summaries of classic texts, and contemporary experiments and observations of such well-known businesses cases as the Enron debacle. Readers with knowledge of behavioral economics or negotiation will find some familiar material in this book. For others, Shermer’s connections among biology, psychology, economics and ethics will be enlightening. He overreaches at times, making sweeping claims for the power of the market, but you don’t have to agree with every conclusion to enjoy the work. getAbstract recommends this to readers who are interested in behavioral economics, self-knowledge or the machinations of markets.

[Ninakix · Rating 4 out of 5]

This book is sometimes odd because it seems to sit in the middle of three different disciplines - economics, psychology, and evolution - but that actually turns out to be a good thing, because it explains how the different disciplines tie together. A lot of the research is covered in other books, but the way he ties it together, explaining how different psychological principles probably emerged from our evolution (evolutionary psychology), but also how that effects our economic systems today - and not just models, but the real actions (irrational) people take. Shermer advances an interesting model and view of the world that's worth reading about.

[Shea Mastison · Rating 4 out of 5]

Michael Shermer is one of the best writers of popular science today. His style is highly accessible; he is knowledgeable about a wide array of sociological, psychological, and biological topics, and he is willing to examine multiples sides of any given issue.

This is an excellent book describing the morality of capitalism based upon the newest discoveries in neuroscience. But it's also a more open look at how free market principles can help us prevent war--as he references: Bastiat's Principle--"When goods do not cross frontiers, armies do."

So, let's stop killing people, and start trading with them instead. Read this book!

[Aaron · Rating 3 out of 5]

Having loved "How We Believe", I had high expectations for this one, but it never came together for me. While there were interesting passages and ideas, it was one of those where I would read ten pages, get sleepy, come back to it in a couple days and not remember the last 10 pages, have to backtrack a couple pages, get through 6 more pages, etc... It was a bit random. And the fact that he gets oddly conservative/libertarian in a couple places threw me for a loop. I'm not saying that's bad as a rule, but he lost me when he actually used the phrase "tax and spend liberals"...

[JP · Rating 3 out of 5]

Michael Shermer's life is as interesting as this explanation about how our minds haven't yet caught up to our modern economic world. We're hard-wired to make purchases quickly, share our big kills, trade with trusted systems, feel a rush at cooperating, avoid losses, and respond tit for tat. One interesting fact - quoting a Rudolf Rummel analysis - of 371 international wars from 1816 to 2005 where at least 1000 people were killed, 205 were between nondemocratic nations, 166 between a nondemocratic and a democratic, and none were between democratic nations.

[Nicholas Moryl · Rating 2 out of 5]

An attempted synthesis of behavioral economics and biology. Works in some places, doesn't work in others. The sections about addiction and neurobiology--how our pleasure centers drive our behavior--are backed by better empirical evidence than the sections where Shermer tries move from micro (individuals) to macro (social).

I strongly agree with the criticisms prevented in this review, so I'll just link to it rather than re-typing its comments: https://www.goodreads.com/review/show...

[John Seno · Rating 3 out of 5]

This book has brilliant insights, linking our evolutionary & biological history with the marketplace went along way in showing how the market is really a collection of unconscious and mostly irrational decisions. Although it might not seem like it on the surface we are hardwired for altruism and the pursuit of self interest at all cost is not in our nature. The whole market is built on trust and this quality is intrinsically found in our hard-wiring. Great Book, amazing insights!

[Đặng Nhật Vũ · Rating 4 out of 5]

*Tóm tắt nội dung:
Cuốn này là sự tổng hợp của kinh tế học truyền thống, khoa học hành vi, kinh tế học tiến hóa, và tâm lý học để giải thích cách con người đưa ra quyết định trong các môi trường kinh tế.
Các quyết định kinh tế của con người không phải lúc nào cũng lý trí và hiệu quả như chúng ta vẫn nghĩ. Tác giả chỉ ra rằng cảm xúc, thành kiến, và các yếu tố tiến hóa định hình cách con người hành xử trong thị trường.
Tác giả kết nối các hành vi kinh tế của con người với quá trình tiến hóa. Shermer cho rằng các đặc điểm như lòng vị tha, hợp tác và tính cạnh tranh đều có gốc rễ từ tổ tiên của chúng ta, những loài linh trưởng sống thành bầy đàn. Những đặc điểm này giúp giải thích tại sao con người vừa có khả năng cạnh tranh, vừa có xu hướng giúp đỡ người khác.
*Điểm hay:
- Cung cấp nhiều kiến thức thú vị về kinh tế học và tâm lý học.
- Những chương đầu xem có vẻ rời rạc về những chủ đề khác nhau, nhưng đến những chương cuối thì sự liên kết bắt đầu xuất hiện. Và đến lời kết thì mọi ngư���i đều thấy được tất cả nội dung đều là dẫn chứng đến luận điểm tổng thể sau cùng.
* Điểm chưa hay:
- Nội dung từng chương viết hơi dài dòng, quá nhiều chữ.
- Kiến thức được đề cập trong sách đa số là không mới, mọi người có thể dễ dàng tìm thấy trong các cuốn khác.
* Đánh giá: 3.5 sao

[Otto Lehto · Rating 3 out of 5]

Like a good meal nearly ruined by a bad ingredient, it is frustrating to see good ideas delivered in a middling package. Shermer's skeptical optimism is firmly rooted in cutting-edge social and natural sciences. Many of his detractors are shocked by his unapologetic defence of free market capitalism, and it does sound occasionally starry-eyed. But he backs up his arguments with good evidence, especially when discussing the economic dimensions of behavioural, neuro- and social psychology.

The problem lies not with the contents, but with the structure of the book. Did the editor sleep on the job? The chapters are loosely connected ruminations on various topics without a strong, overarching narrative. They rehash latest popular science articles, which is fine, but they also recycle his own earlier books. And, by the end, you are left wondering, "That was it?"

Overall, I enjoyed the book, thanks to the fascinating barrage of popular science trivia. Shermer's position is a strong and important one, but this book unfortunately does not do it justice. The Mind of the Market is a competent but forgettable cash grab for the airport lounge market.

[mark propp · Rating 3 out of 5]

for some reason, i had it in my head that this book focused a lot more on how darwin was influenced by adam smith, and the similarities in emergent order that we see in markets & evolution.

i suppose in a roundabout way, it's kinda about that, but not in the way i'd hoped. instead, it's mostly focused on behavioral economics. it's fine, but...y'know, i've read kahneman's book & i've read predictably irrational & the rational optimist and things like that.

so a lot of this was treading over familiar territory for me.

i like shermer, think he's a fighting the good fight. but i do find him to be a slightly dull writer. and ultimately i found the book to be a bit of a slog. it's fine. if you are interested in behavior econ, it's probably a decent read. i'm probably suggest reading kahneman's book instead, though.

[Patrick Clancy · Rating 3 out of 5]

A bit difficult to read...so if your vocabulary is limited or even less than a masters in economics, sociology or psychology you might have trouble. I had to look up quite a few words.
The title of the book is misleading. It’s more about interpersonal and interpersonal interaction within the bounds of economy.
Some chapters are more interesting than others, mainly ones where it’s a practical example of the author’s theory.
Also, it was not til the end that the author clearly explained his economic/political beliefs and the research behind his and other economist theories (which, were quite interesting).

[Dimitur Nikolov · Rating 2 out of 5]

It is sad to see a person that you like so much, a skeptic, a person that should understand science, to misinterpreted the theory of evolution in such a way so it will fit in his personal views on capitalism and free market. No, evolution is not some perfect process, constructed an manipulated by some invisible hand. And No, free market principles and extreme libertarianism wouldn't work for the homo sapiens. Human behavior just doesn't fit in this philosophical believes.

[Kursad Albayraktaroglu · Rating 3 out of 5]

While an interesting and engaging book (mostly thanks to Shermer's talent as a writer); I think the book does not fully deliver on the promise of being a comprehensive study of evolutionary economics. There seemed to be a lot of emphasis on evolution, but not that much on economics.

If you were to read one book on the evolutionary foundations of behavioral finance, you probably should look at Dan Ariely's or Jason Zweig's books. If you find yourself really interested in behavioral finance, this book would be a good addition to your reading list as the second or third book on the subject.

[Jess Thompson · Rating 4 out of 5]

Informative, if not a bit repetitive. I love Shermer's writing and how he lays things out. He makes a good case here for the reasons we humans interact with each other in the ways that we do. Focusing on the underlying reasons for our cooperation and touching on how we can build on those.

[Paul Bard · Rating 2 out of 5]

Libertarian sermon.

Fascinating argument that Smith and Darwin both noticed emergent principles from individual behavior.

Freedom, free trade, democratic capitalism.

Uses Jared Diamond and Thomas Friedman's dubious ideas to support moral argument.

[Abhishek Shrivastava · Rating 1 out of 5]

I had to leave this book after forcefully reading about 60 pages. i kept on waiting that i will be able to grasp and make some logic of what i am reading. however, i was not able to make head and tails of anything mentioned in the book. Nor could comprehend why this book is written.

[KP Duty · Rating 2 out of 5]

I was cruising along until page 31 and his strawman definitions of price gouging, cutthroat competition, and price collusion. Then I realized this wasn't an objective look at economics or otherwise but a defense of libertarian ideals in the court of popular opinion. From there I turned prosecutor for the rest of the book because it seemed the right thing to do.

[Erik · Rating 4 out of 5]

Many a year since enjoying his Why People Believe Weird Things, I am once again picking up on Shermer’s latest thoughts. Yet this time his ideas revolve around what makes up our economic minds and lives – rather than oddball cultish thinking, or contemporary popular myths.

Shermer lets us readers know up front that he is essentially pro-capitalist – but not in the Social Darwinist sense of either “winner takes all” or “dog eat dog.” Rather, he makes it clear that capitalism is the best possible economic system to-date because it rewards innovation, promotes trade (which he views as a barrier against war), and functions best as a grass-roots social phenomena that is transparent and honest (Enron and Worldcom executives be damned). By the end of the first quarter of his book, Shermer proudly outs himself as an unwavering advocate of a democratic capitalism, which he defines as “a system of…social liberalism and fiscal conservatism [in:] a synergistic marriage that leads to the greatest prosperity, the greatest liberty, and the greatest happiness for the greatest number.” (The last of which sounds strikingly utilitarian, if you ask me.)

After his economic theorizing during this first portion of his book, Shermer turns his attention to the psychology of humans as social creatures. Not only does he debunk the myth that we are either innately selfish (whether one misreads Richard Dawkins, or if one truly believes in the mantra that “Greed is good” propounded by Gordon Gecko in Oliver Stone’s Wall Street) or intrinsically evil (as referenced by Phillip Zimbardo’s now-infamous and well-documented Stanford Prison Experiment), but he proudly – and for the most part convincingly -- argues that human societies have evolved to benefit the greater good. Why? Simply because it is in one’s self-interest to help others. That is, the act of giving usually results in receiving back in spades, as Shermer views it. Social creatures we are, for better or worse.

If you were to ask me what I think of Shermer as a researcher into and theorist of human behavior and motivations, I would say that he’s a “glass half full” kind of thinker. Bleak this man is not. For some thought-provoking reading that is neither too heady nor too dependent on statistics, Shermer’s latest book is the perfect bedside reading that will keep you staying up later past your bedtime.

[David · Rating 4 out of 5]

I cannot review this book without mentioning my biases. I love Shermer as a writer and thinker, and I've yet to read something of his I disagree with.

With that out of the way, I must admit that the title and subtitle of the book aren't an accurate representation of the book as a whole. This is more an expansion of an earlier book (which he admits) than the title indicates.

Shermer's premise with this book is that the free market and capitalism are both the most natural and the freest modes of economic exchange. And his evidence springs from neuroscience as an indicator of the evolutionary history of humans. While the title suggests this in a minor way, it implies a broader analysis.

One of the biggest points in this book is the disproving of the antiquated idea of Homo economicus. Along with economists like Thaler, Becker, and Levitt (the economist co-author of Freakonomics), Shermer uses not just psychology and economics, but the aforementioned neuroscience, to illustrate the idea of innate altruistic behavior. He explains a theory of evolutionary basis for altruism, going so far as to posit a new classification, Homo evonomicus (the evolved tendency for pro-trade, pro-market mentality in humans) to supplant the older model. This is by far the highlight of the book (indeed, its central theme), but the data and arguments bury it, leaving the final product less coherent than optimal.

There are two problems I have with this book. First, Shermer has a tendency to repeat himself, even when his ideas aren't so complex as to warrant the continuous clarification. Second, the narrow scope of the ideas can be hard to get through. As I mentioned above, he repeats the less important conclusions and glosses over the big ones, a fault that doesn't weaken the ideas of the book, but impairs the work as a whole. Of the Shermer books I've read, this one is the worst. It's still very good, but most of his other books feature a lot of the same data and studies and broader implications from both.

If you're looking for a book that uses neuroscience to explain why people behave the way they do, and your primary interest isn't economics, this book isn't for you. Even a passing interest in economics, like mine, doesn't make this book exceptional. It's still very good and worth the read, but it's narrower and less interesting than Shermer's books on belief.

[Rod Hilton · Rating 4 out of 5]

The Mind of the Market analyzes the free market of capitalism in a manner like evolutionary biology. It's an interesting book, in which Michael Shermer essentially argues that the market works the way it does because of the desires and behaviors of its component parts: people.

Shermer discusses people as independent agents within the system and the ways in which the traditional model of Homo Economicus are mistaken. The book also touches on a bit of morality theory, explaining how and why people behave in an ethical manner. Essentially, the position of the book is that the behavior of the free market can be explained in terms of the evolution of the humans participating in that market.

The book is interesting, short, and informative. Unfortunately, it deals in a lot of well-worn areas, discussing at length the limitations of the human brain and even rehashing a great deal of material from Shermer's other books, most notably The Science of Good and Evil.

The main problem with the book is the same problem with other Shermer books: it never really gels as a cohesive book. Most of the other Shermer books I've read felt like a collection of somewhat-related essays, stapled together into a book. Each chapter is, by itself, a very good read, but whenever I remind myself of the greater context of the book, I often found myself wondering "where is this going? What does this have to do with anything else?" Often, by the end of the chapter I'd understand the reason for the chapters inclusion, but on a few occasions I never felt like I understood why the chapter was included.

Overall, Shermer is a very engaging writer and this is one of his better books, it just has to be read as a collection of related essays rather than a cohesive book with a central thesis being proven over a series of chapters.

[Aidan Scott · Rating 4 out of 5]

Underrated as fuck! A must read for every Christian/Theist, especially if you also believe in evolution!