Innovation, Morality, Externalities, and Evolution

A stylized but useful continuum exists between “good” innovation and “bad” innovation. At one end, the innovation will help society - cure a painful ailment, make communication or travel easier and cheaper, bring pleasure, etc. (Of course, with all good things come bad ones - maybe making communication cheaper puts people out of jobs. But, while maintaining employment is, all else equal, a good thing, it clearly cannot be a dispositive consideration in this context). At the other end, the innovation is not designed to help society - it is, rather, designed to help some subgroup who are indifferent to helping others (or who may even delight in harming others!). A motivating example is an innovation that “games” something - it takes advantage of law (or ‘quasi-law’ made by influential parties such as rating agencies), or maybe just of people’s natures - a better con, for instance. What makes an innovation “bad,” belonging towards that end of the continuum, is the lack of intended social benefit by the innovators - I thus want to exclude here innovations whose effect can be wonderful or disastrous depending on who is making the assessment, and for what purpose the innovation is used, such as weapons. The middle ground is of course vast. Where is the innovator’s motive in this account? For "good" innovations, we may not care - if a brilliant scientist wants fame, fortune and a Nobel Prize and is indifferent to the millions of people who may be cured by his discovery of a cure for some disease, does it matter? But for other innovations whose effects are less obviously "good," motive may matter. It may affect how much scrutiny we give the innovation ex post, and how much we encourage the process and person or persons, ex ante. I suggest here using an evolutionary lens to illuminate the problem of bad innovation, a problem on vivid display in the continuing financial crisis. My focus is on the negative externalities bad innovations produce. My paradigmatic examples are of financial “innovation” that proves harmful to society, such as mechanisms to conceal a company’s debt, or to “arbitrage” regulatory requirements in ways that defeat what the regulation appropriately is trying to achieve. My thoughts are quite preliminary: I hope principally to spark some thinking and discussion on this possibility. My intuition is that differences in the in-group/out-group structure and relationship in the EAA and in present-day society may be part of the story. In the EAA, group membership was determined by proximity and kinship, not by choice. There was a straightforward ingroup; the outgroup was straightforward as well. By contrast, we now have more choice regarding what ingroup(s) we belong to. Importantly, “choice” is not for this purpose a knowing, conscious and continually-made status; it is, however, to be contrasted with the lack of choice involved in group membership with fellow family members or neighbors. Group members now may need to regularly delineate their groups from others; one way to be particularly tightly-knit is to bond together in a belief system which would be disfavored by the greater society if not reviled. Another intuition is that while in both the EAA and now, a society would have needed “leaders” and “followers,” the features that make people be accepted as leaders may be different in ways that matter. Might a leader in the EAA have to do something that demonstrably benefited the greater society to warrant followers? These two intuitions are very early starting points. Critically (in both senses of the word), the first in particular explains much too much - the gaming behavior I describe is not uncommon, and is quite important, but is not nearly as pervasive as it would have to be if the condition I described were anywhere near sufficient. So, much is to be figured out. My main aim here is to raise the question: can the incentive to do "bad" innovation, and the lack of constraints against such innovation, be illuminated using an evolutionary lens? Might such a lens yield possibilities for limiting bad innovation?