In a recent exchange of compliments, US President Barack Obama accused GOP budget commissioner Paul Ryan and likely presidential nominee Mitt Romney of being “Social Darwinists”. The budget cuts called for by the Republicans enraged the President, who believes government must take an active role in education, R&D, and infrastructure. Never mind that government 'investments' almost always fail due to bad incentives and inadequate information, and prevent sustainable patterns of specialization and trade from emerging. Anyone opposing this civilisational aspiration for humanity to be led and controlled by the government is apparently a Social Darwinist.

That term is always pejorative. Why? Because Social Darwinism implies survival of the fittest; an application of Darwin’s natural selection law into a society. In the animal kingdom, the strong survive and succeed, while the weak fail and are left to die. The stigma of Social Darwinism is that it implies that the poor shouldn’t be aided in a system where wealth is a sign of success.

But this definition needs clarification. Survival of the fittest does not, in economics, mean that those who fail should die. It simply means that a free society should be a constant trial and error process, in which people gradually work out better ways to do things. No one reaches success immediately; we all undergo a trial and error process, whether through looking for jobs, applying for schools or looking for a place to live. Our experience gained through a series of trials and errors ensures a process of constant cognitive learning. Good ideas survive, bad ones die – this is the essence of progress.

In a competitive marketplace, such behaviour is more than welcome. Firms that treat their customers poorly will be considered weak and will go under, while those who offer an extra service and value to the customer will be considered strong and will be able to prosper. Trial and error means that good companies which offer added value will succeed and expand while bad ones will wither and fail. Surely this is a good thing, socially darwinist or not?

In the animal kingdom, natural selection ensures that only the strongest of the species survive. A competitive marketplace applies the same logic to firms. But this doesn’t mean that people who are left behind due to natural disadvantages should be left to die. I don’t think anyone within really thinks this way, and I don’t think this is implied in the definition of Social Darwinism. When it comes to human beings everyone should get an equal opportunity to prove him or herself based on merit. When it comes to companies the same rule should be applied. Call it Social Darwinism or call it competitive meritocracy; unlike its ideological opposite – socialism – at least it hasn’t killed anyone.

P.S. You can find more of my thoughts about the Ryan budget here, on my personal website.