Growth, Reproduction, Generations and The Recession

February 12, 2009 in Economics, Essays, Evolution, Fuck The Recession

I was going to call this post “How Darwin could help us out of this recession” in honour of his 200th Birthday today. Apologies in advance for the length, but I hope it’s worth it.

The last book I finished reading was Richard DawkinsThe Extended Phenotype. It was fantastic. Although it has given my mind enough fodder for several blog posts, I’ll start with the very end of the very last chapter, which I finished the week that the big three car companies in the US went to congress looking for a bailout.

Reproduction vs Growth

What is the difference between reproduction and growth? It may seem obvious at first, but apparently it caused biologists a spot of bother back in the 70s.

When an organism grows, it mostly does this by replicating cells over and over. My hand, for example, grew in size from when I was a child. It did so when cells in my hand multiplied to form more skin, muscle etc. for a bigger hand. All of these cells contain the same DNA (my DNA) because they’re all me! In an evolutionary sense, all of the cells with my DNA – which are all the cells in my body – are working together to make hands and eyes and organs and tissues to get me through life and to reproduction, to pass my genes on.

Reproduction is obviously different. It involves two organisms coming together, to produce a third organism which is an exact copy of neither. Right? Wrong! But then what about a-sexual reproduction? When a bacteria cell divides in two, both are copies of the parent, is this really reproduction or is it just growth like the cells in my hand? And that was the stickler.

So What?

The discussion is fascinating and well worth a read, but not overly important for this post. The crux of the difference is that growth involves dead end replication – if there’s a strange mutation in the cells in my hand and the DNA suddenly begins to code for a new finger to grow, this will affect my hand only. If my hand gets chopped off, my future sons or daughters will not be born hand-less; If I get a tan they’re still be born a pasty Irish white! Reproduction is replication of DNA that will live on, forming a new organism which will potentially reproduce again.

A long time ago in a primordial soup far far away….

The importance lies not in understanding “what” is the difference, but “why?” If you cast your imagination back a few billion years to a primitive earth, where the first single celled organisms were appearing in the primordial sea. It’s obvious why some of them ganged together and found a competitive advantage as a multi-cellular organism. But what’s not obvious is why did reproduction evolve? Here are two examples from the book that best illustrate this point:

Imagine a primitive plant consisting of a flat, pad-like thallus, floating on the surface of the sea, absorbing nutrients through its lower surface and sunlight through its upper surface. Instead of “reproducing” (i.e. sending off single-celled propagules to grow elsewhere), it simply grows at its margins, spreading into an ever larger circular green carpet, like a monstrous lily pad several miles across and still growing. Maybe older parts of the thallus eventually die, so that it consists of an expanding ring rather than a filled circle like a true lily pad. Perhaps also, from time to time, chunks of the thallus split off, like icefloes shearing away from the pack ice, and separate chunks drift to different parts of the ocean.

Now consider a similar kind of plant which differs in one crucial respect. It stops growing when it attains a diameter of 1 foot, and reproduces instead. It manufactures single-celled propagules, either sexually or asexually, and sheds them into the air where they may be carried a long way on the wind. When one of these propagules lands on the water surface it becomes a new thallus, which grows until it is 1 foot wide, then reproduces again. I shall call the two species G (for growth) and R (for reproduction) respectively.

These two outcomes were possible, but the second one (R) is what we recognise as the modern plant. For this to evolve by natural selection it has to have had some advantage over pure growth (G). In what way is reproduction a more successful competitive strategy than pure growth? I’ll let Prof. Dawkins explain it better than I ever could:

…the significance of the difference between growth and reproduction is that reproduction permits a new beginning, a new developmental cycle and a new organism which may be an improvement, in terms of the fundamental organization of complex structure, over its predecessor. Of course it may not be an improvement, in which case its genetic basis will be eliminated by natural selection. But growth without reproduction does not even allow the possibility of radical change at the organ level, either in the direction of improvement or the reverse. It allows only superficial tinkering. You may divert a developing Bentley into a fully grown Rolls Royce, simply by tinkering with the assembly process at the late point where the radiator is added. But if you want to change a Ford into a Rolls Royce you must start at the drawing board, before the car starts “growing” on the assembly line at all. The point about recurrent reproduction life cycles, and hence, by implication, the point about organisms, is that they allow repeated returns to the drawing board during evolutionary time.

On Detroit

I read that for the first time last month, and I think I enjoy it even more every time I read it. Biology is such a powerful teacher. Evolution by natural selection is by far the most powerful scientific theory that I’ve had the fortune to learn. Natural selection has no intelligence behind it – the most successful organism (or gene or evolutionary strategy) will reproduce and live on, lesser alternatives will not. When nature has a way of doing something we should take note, as it’s more than likely the best possible way that it can be done.

So on the occasions that free market economics fails us (as it’s been accustomed to doing of late!) we should look to Biology for guidance. How can we apply the learnings that reproduction is better than growth, that the continuous life cycle beats never ending expansion, that rebirth trumps a resistance to ending?

Once more I’ll quote someone who can say it much better than me. This is an excerpt from a Seth Godin post titled What to do About Detroit:

Not only should Congress encourage/facilitate the organized bankruptcy of the Big Three [car manufacturers], but it should also make it easy for them to be replaced by 500 new car companies.

Or perhaps a thousand.

That’s how many car companies there were 90 years ago.

That’s right, when all the innovation hit the car industry, there were thousands of car companies, with hundreds running at any one time. From Wikipedia:

Throughout this era, development of automotive technology was rapid, due in part to a huge number (hundreds) of small manufacturers all competing to gain the world’s attention. Key developments included electric ignition (by Robert Bosch, 1903), independent suspension, and four-wheel brakes (by the Arrol-Johnston Company of Scotland in 1909).[16] Leaf springs were widely used for suspension, though many other systems were still in use, with angle steel taking over from armored wood as the frame material of choice. Transmissions and throttle controls were widely adopted, allowing a variety of cruising speeds, though vehicles generally still had discrete speed settings rather than the infinitely variable system familiar in cars of later eras.

Between 1907 and 1912, the high-wheel motor buggy (resembling the horse buggy of before 1900) was in its heyday, with over seventy-five makers including Holsman (Chicago), IHC (Chicago), and Sears (which sold via catalog); the high-wheeler would be killed by the Model T.

What we don’t need are giant companies with limited choice, confused priorities, private jets and a bully’s attitude.

I’d spend a billion dollars to make the creation of a car company turnkey. Make it easy to get all the safety and regulatory approvals… as easy to start a car company as it is to start a web company. Use the bankruptcy to wipe out the hated, legacy marketing portion of the industry: the dealers.

We’d end up with a rational number of “car stores” in every city that sold lots of brands. We’d have super cheap cars and super efficient cars and super weird cars. There’d be an orgy of innovation, and from that, a whole new energy and approach would evolve. Betcha.

I know this post has been mostly me patching together the thoughts of two men much smarter than me, but I think there’s value to be gained from linking the two.

I don’t think this is just a lesson to be applied to certain industries, but in fact could be applied to modern economics as a whole. Capitalism is still quite young and questions like “for how long should a company live?” need to be be considered. The demise of a company like Waterford Wedgewood is obviously not good for the company itself, but the existence of a company life cycle is beneficial for the economy as a whole. This life cycle, with the expectation that companies will some day reach the end of the line, is not something that should be fought by our governments with bailouts or protectionism. It should be expected, managed, normalised and encouraged so that a sector, an industry, an economy and a country can be reborn stronger than before.