Transcending the limits of biology

Micha's excellent post on what a market requires lays out one of the beauties of the market system as a system- that not only does it not require a great deal of thought to operate (from any one individual), but that (in the words of Hayek) “Civilization advances by extending the number of important operations which we can perform without thinking about them.” Dovetailing nicely with this observation is work from biologists studying the human brain and its impact on socialization. Robin Dunbar studied primates and found a correlation between brain cortex size and the size of social groups. The larger the cortex, the larger the social group supported, and as one suspects Humans have both the largest cortexes and the largest social groups of any primate. And for humans, the maximum number that seems to be supported by our brain size is around 150. This number suspiciously pops up throughout history and studies of human cultures:

For example, [Dunbar] looked at 21 different hunger-gatherer societies around the world and found that the average number of people in each village was 148.4.

The same pattern holds true for military organization. Over the years, through trial and error, military planners have arrived at a rule of thumb for the size of a functional fighting unit - 200 men. They have realized that it is quite difficult to make any larger a group than this to function as a unit without complicated hierarchies and rules and regulations and formal measures to insure loyalty and unity within the group. With a group of 150 or so, formalities are not necessary. Behavior can be controlled on the basis of personal loyalties and direct man-to-man contacts. With larger groups, this seems impossible.

Further is the religious group known as the Hutterites, who for hundreds of years, through trial and error, have realized that the maximum size for a colony should be, low and behold, 150 people. They've been following this rule for centuries. Every time a colony approaches this number, the colony is divided into two separate colonies. They have found that once a group becomes larger than that, "people become strangers to one another." At 150, the Hutterites believe, something happens that somehow changes the community seemingly overnight. At 150 the colony with spontaneously begin dividing into smaller "clans." When this happens a new colony is formed.

Razib from Gene Expression chimes in with the observation that Ghengis Khan had a bodyguard of 150 men, and that the most important military units in both the Mongol and Roman armies were those of 100 men.

Rounding it out, back in November Gene Callahan made an excellent post addressing when exactly economic calculation was necessary, which concludes:

The history of the early stages of several civilizations suggests to me that a society comes to need economic calculation when the economic activity within it begins to exceed the ability of any one person to retain all of the important details of what is occurring within his head.

So the market is an innovation to help extend the power of human organization beyond the biological limits of individual computation & social knowledge, and it works despite limited knowledge (or intelligence) among its members, as the basic function of giving information on relative scarcity & as a guide for allocation of productive resources to what others are demanding. But ultimately the market is the mediating/extending mechanism for a multitude of acting beings with their own goals and scales of needs/ends to which they choose means.

Share this