The Problem at the Heart of Capitalism
Markets that Exploit Human Nature
I think something is wrong with our world and I have not seen this thought expressed anywhere else in quite that way yet, that's why I sat down to write this blog post. It will be a deep dive, covering lots of different topics, like social media, economics, neuroanatomy, education, AI research and addiction. By the end, you hopefully will understand what I mean when I say that there exists a problem at the "heart" of Capitalism. And the problem is a big one, causing a lot of unnecessary human suffering. So let us at least stop to think about it.
First, what do I mean when I say "Capitalism"? The word can be widely used and people mean different things. In my mind when I think of capitalism, I think of free trade, between individuals, corporations and countries. I picture an economy where prices rise and fall according to supply and demand and where companies compete with each other freely, "laissez-faire" style, without roadblocks put up by the government or other institutions. Everybody can compete for customers. Everybody can try to buy and sell things and try to make a living from this competition. In such a system, usually, the best products win. What best entails here exactly is a good point for debate and not entirely clear.
Let's just define "best" products as those that sell the most, which is usually caused by a unique blend of price, marketing, actual quality, what problem they solve and how they solve it, how hard they are to manufacture, the margins gained by the producers and so on. However, the best products, by definition rule in the market, because they are better adapted to getting sold.
Isn't Capitalism supposed to be good?
As the story goes, in such a capitalist world, companies are competing to create the "best" products and those companies will create technological progress and prosperity for the society they operate in along the way.
I think this part, which goes back to thinkers like Adam Smith or John Maynard Keynes and a lot of others, is not the problem. I even think fundamentally this picture of Capitalism is right. Capitalism and free trade are the driving forces behind why our world is in the place it is right now, with prosperity for many of the people in the world and climbing standards of living across all measures across the whole globe. This is something that most people don't even believe in, yet is f true. For a good account of why and how this is true, I can only recommend you go and read The Better Angels of our Nature by Steven Pinker.
Yet, while we largely live in such a world, a world governed by free trade, and competing corporations, it's not the heaven that you would hope it would be. Smith's invisible hand (an idea introduced by him in his famous work On the Wealth of Nations works wonders, but somewhere along the way it also does quite a few horrible things. What are those things?
There are some disturbing trends visible in our world right now:
Our attention spans are shrinking. I feel like it's getting increasingly harder for me to do solid focused work. And intellectually demanding feats too often seem impossible to pull off, instead, I chill and watch YouTube. Even reading a good book for a few hours is not something I regularly do anymore as much as I used to and sometimes it even feels like work to me, like something hard and painful to do, something that I don't enjoy anymore, something that I don't want to do. Why?
Addictions especially to new formats of media, like porn, TikTok, YouTube, Netflix or games, are a huge problem for almost everybody, at least in my generation. Including me. Why?
There is an obesity pandemic. Ok, I am not a part of that yet, because I am young, do a lot of sports and try to focus on a healthy diet a lot. But still, it feels like an uphill battle. I still often struggle with wanting to go and eat shitty food like fantasizing about a whole bar of Milka Chocolate... Even though I know they are bad for me, I sometimes want to eat them in bulk. Even just writing this made my mouth water and for a second some part of my brain thought about a way to get some of that delicious Milka with Toffee Hazel Nut. Why?
And whenever I read the news, I can not help but feel anxious, feel threatened by the world around me, how broken it is, how large the big problems loom and also about how stupid "the others" are. It feels like everything is a black and white picture, those are the good guys, those are the bad guys, and they are only 100% good or 100% bad. There is no nuance to the news anymore and whenever I read either of the sides, I feel enraged at how the other side can think that?!
What a diverse set of things huh? Anxiety, polarization, obesity, shrinking attention spans, addictions...
As we will see though, all of these problems and the fact that all of them are on the rise, big time, have a common factor, a common origin and it's what I call: The Problem at the Heart of Capitalism.
Before we get to that let me paint a picture of my struggles with those trends:
To me the one I am personally most affected by is addiction. I feel like I suffer from addictions of various kinds a lot. And I know enough of my friends who struggle in just the same way.
I am addicted to computer games, pornography and YouTube to a certain extent.
Which is scary if I stop to think about how much time I spend on these things on a week-to-week (or year-to-year... or lifetime?) basis. Sometimes I just feel like I have no choice but to do them, despite not enjoying them all that much anymore. Sometimes I feel like a bird tricked by a cuckoo. More on that later.
Sometimes I can even sit there in front of my computer, detached, and observing myself in my mind, thinking: "Why the heck are you doing this right now? Didn't you want to do something much more important?"
And all too often I catch myself, even coming up with excuses to answer that question lingering in my mind. Excuses like: "Nah... I am tired today", or "I am not that well, my energy is low, so it's fine to watch YouTube... but just today!" or "I already did a lot of work today, so it's okay to do this now..."
Those are excuses to keep a destructive behavior in my life, excuses concocted by an addicted brain, where the addicted part hijacks the thinking part to come up with creative ways to explain that behavior and rationalize it so that it doesn't feel as bad (more on how that works exactly also later).
I lie to myself so that I can "enjoy" the pleasures of addiction again or for longer, suffering all the while, because it's not what I want to do. Anybody who has suffered from something like this will resonate with a quote from the Bhagavad Gita:
The self is a friend for him who masters himself by the Self; but for him who is not self-mastered, the self is the cruelest foe.
My Self is a foe to me.
That's what it means to struggle with addiction. I still consider myself lucky, because I can still think of myself as a "functional" addict.
Somehow my life hasn't collapsed around the things I am addicted to yet, and I work, have healthy relationships and maintain a semblance of order. And I am aware enough of the problem, to do something about it.
To fight off cravings, to reduce the amount of time lost that way, to build healthier habits and eventually heal. But to get there it's an arduous road and I am far from the end of it. Because the anchors that trigger cravings are still there, not overgrown yet. Still there, carved into my brain.
My claim is, that all of these problems, especially addiction (and their prevalence today) come from the interaction between Capitalism and our human brains. Now, ok, Capitalism itself is just an emergent phenomenon of people (brains) interacting with each other in the world, but what I mean is that Capitalism changes the ways we behave and also the underlying reasons why we behave in any particular way at all. Because capitalism builds artifacts (products) and Capitalism is very good at finding ways to build products that exploit our brains.
To understand what that means though, let's have a look at addiction more in-depth, to learn a bit about how the human brain works. Actually, not just human brains, but brains in general. Because it turns out that the neural circuitry responsible for addictions is quite conserved, hence rats can still become addicted to Cocaine or "porn" just as humans do.
We want to find out and understand what addiction is on a neurological level. First of all, while some people consider it a disease not everybody would agree. As we'll see, in a way, addiction is just learning gone wrong and too far. What do I mean by that? Let me explain.
Evolutionary Rules of Thumb
In a way, humans are machines designed with a few simple "rules" in place. Rules that determine what stimuli give us pleasure. These rules govern when we feel good or bad in response to doing things.
Those rules include feeling good when eating, tending to children, exploring new areas, having sex or spending time with friends. And they include feeling bad or in "pain" when we expend energy, think hard, do not get enough food, or exercise.
Something interesting to note is that those rules are somewhat malleable to our experience.
Therefore culture can play a role in modulating, shaping and changing those rules to a certain extent. Culture can influence how, when and why we feel happy or sad or angry. Education, therefore, plays a huge role in adding rules on top and combining the built-in rules in novel ways. Culture layers meta-rules created out of and built on top of the default rules so to speak. Those "rules" could look something like: "Hey, money is good, because it can buy us food and gives us status. So when we earn money we should feel good."
However, in the end, all of those rules, including the meta ones, can be broken down to some association with a type of behavior that has been evolutionarily useful. How exactly this works and how culture and experience influence the things we want and desire or fear and abhor is a much more complicated topic (maybe for another post).
Our brains are prediction machines, neural networks firing in response to stimuli from the world (let's call stimuli from the world simply input).
They not only respond directly and immediately but also adapt and change their structure. Brains rewire in response to inputs. So the same input presented to our brains twice doesn't necessarily produce the same output, because the first time it arrived it might have changed the brain a little bit. This is the basis of all learning.
We are always trying to capture spatial and temporal patterns. Those patterns are useful because we as human reproduction machines can then exploit those patterns to find ways to sustain and reproduce ourselves.
Patterns we find in the world are always evaluated by the rules of thumb mentioned above.
Judging by these patterns, brains then try to find regularities in the world. Regularities that we can learn and that fundamentally help us to survive better.
When we find those regularities, our brains motivate us to exploit them. It's as simple as "I did a) in a context of b) and then I felt good, hence let's do more of a) the next time we are in context b)". Or I felt bad, and therefore I should not do a) in context b) or even avoid context b) entirely.
This is what psychologists refer to as conditioning. Put a rat in a box and teach it to associate food with the ringing of a bell followed by it pressing a lever. The rat will soon go and press the lever every time a bell rings because it has learned that it can get food that way. Humans work the same. The main difference is that our levers and bells are much more complicated and that we are also much smarter than rats (or so we think). This means we can design our levers and bells.
This type of stimulus-based learning is also the basic pattern underlying all addictions.
The Stimulus-Behavior-Reward Loop
Certain stimuli produce certain behavior. Behavior is linked to stimuli and we learn to associate the stimulus with the behavior. The main neurotransmitter involved in all of this is Dopamine.
We release Dopamine in anticipation of a reward. We anticipate a reward because that's what we learned from past stimuli that were similar.
Stimuli -> Behavior -> Reward.
All is mediated by Dopamine. Over and over.
The release of Dopamine further strengthens the connection between stimulus and behavior, because our brains get increasingly more confident that this is the right thing to do when presented with that particular stimulus. Just look at all the rewards we got in the past, the brain seems to say.
This leads to an anticipatory release of Dopamine. And this anticipatory release is at the heart of all addictions. It's what we feel as cravings and it is what also hijacks our motor neurons to make us perform the actions necessary to get our "fix".
First, not all stimuli are equal to each other in their strengthening effects. They depend on the reward. Its strength and frequency as well as the rewards chance of happening. And this is bad. In the end, all that the human brain wants us to do is survive and reproduce. To that end, we have the rules of thumb we talked about earlier. Now the problem is that modern stimuli/reward pairs are designed to be amazingly good at releasing Dopamine within your brain. To explain that point better, I want to detail an example from the bird world first.
Seagulls have a red dot on their beaks. Did you ever ask yourself - why? The reason is surprisingly simple. Baby seagulls use the red dot as a rule of thumb to "know" where the mouth of their mother is. And that worked fine in evolutionary history until some clever behavioral biology researchers came up with the idea of painting big red circles and stripes and all kinds of shapes on cardboard and presenting those to the chicks. And the chicks tried to be fed from pieces of cardboard, even more so than they would try to get food from their parents. Because the bigger, better red dots, were in effect hijacking the rules of thumb, built into the seagull chicks' brains, by saying: "Look, what a wonderfully big and shiny red dot I have, I must have a lot of food for you".
These over-the-top stimuli are also known as "super" or "super-normal" stimuli.
It turns out, that not just researchers know about these kinds of stimuli. Evolution found out about them long ago and has exploited them ever since.
Another example from the bird world illustrates this beautifully: The cuckoo bird. Here, evolution figured out the stimulus that makes birds feed their young. Specifically, birds look out for the saturated colors of the open mouths of their chicks. Cuckoos have immensely colorful mouths, forcing the brains of the poor birds to feed them over their very own children. The birds are so helpless for it, that they continue to feed a cuckoo "child" even if that "child" is already much bigger than themselves and the only one left in the nest. Sometimes, birds just flying by will stop to give food to the cuckoo.
To me this is insane and it should give you a good feeling of how strong these stimulus/reward loops can be. It's like the birds are hypnotized by the overly strong stimulus and just have to follow it with some behavior. It's the very same story with humans and addiction.
For a longer discussion on these topics and examples, especially from the biological side, I can recommend all of these books tremendously: Behave by Robert Sapolsky, The Selfish Gene by Richard Dawkins and The Red Queen by Matt Ridley
Designing Super-Normal Stimuli
The crazy idea now is that not only evolution can find and exploit such super-stimuli but we can do so too. And that it is something that we have been doing for millennia! But unlike nature, we can not just find them. We can go one step further and design them.
We can start with a naturally occurring stimulus, then find out what exactly makes it "work" at producing the behavior, and then crank up only that property.
This way we turn that stimulus into a grotesque immensely effective version of its original. Does this remind you of anything? Industrial food, pornography, computer games, TikTok, YouTube thumbnails? The process of designing super-stimuli is something that needs a certain amount of intelligence and design (or a lot of trial and error in the case of evolution). But we have an ample amount of intelligence and evolution at work in economic markets.
There is another bridge I want to build between a connected idea. Not only do we have the power to change stimuli we encounter and super-charge them into crazy versions of themselves. We have an incentive to do so.
AI Safety Research
To explain what I mean, I want to introduce a concept that comes from AI safety research. In AI safety there are many many problems - for a list and discussion you can read Max Tegmark's Life 3.0 or Nick Bostrom's Superintelligence.
The concept I want to focus on is reward hacking. Mainly the problem is the following: If we create a more intelligent AI, how do we motivate it to do our bidding? Currently, people use a reward function - a mathematical equation, relating how "good" or "bad" the AI is performing its goal. However using such a function can lead to unexpected, weird and in the case of superintelligent AI very much undesired outcomes. The problem is, that this reward function is just a proxy, a metric, a rule of thumb, for what we really want the AI to do. It is a number that can be measured, but a number that can also be gamed. Reward functions fall under the umbrella of Goodhart's Law:
When a measure becomes a target, it ceases to be a good measure.
Cool, so AI, can perfectly maximize its reward function, without actually achieving the goal. Like a kid cramming for a test, but not really learning anything... In most goal/problem/reward function combinations, the best way to maximize reward is usually not to pursue the goal directly at all. Instead, it is better to find a way to trigger the reward directly with much less work. This idea of "bypassing" the work necessary, of exploiting the rule of thumb, of exploiting the reward function. That is the idea known as reward hacking. The fear in AI research is that superintelligence is by definition very very good at reward hacking.
Now, what has that to do with us and "The Problem at the Heart of Capitalism"?
Reward Hacking and Our Brains
In a way, we are intelligent machines. Just like superintelligent AI, we are good at the process of reward hacking. And just like AI was designed, we were designed by the process of evolution. Evolution built reward functions into our brains. They work via dopamine and other neurotransmitters that are released innately, based on certain stimuli. When we have sex we feel good. When we eat we feel good. When we explore we feel good. When we rest we feel good. Etc. Now all of these are proxied by numbers. Some measurable quality of experience that our nerve cells can register and input into our brain.
It's not just the fact that we eat food that makes us feel good, but the fact that neurons from our eyes fire, reporting on the color of the food, that neurons from our nose fire, reporting on the smell, that receptors on the tongue fire, reporting on the sugar content, the saltiness, the fat content, and that even in our guts, receptors fire, reporting on the absorption rate of sugar into the blood and a myriad of other things.
Within our brains, there is now a bunch of rules of thumb, that evaluate all of that input and sum it up into, yeah, that was a reaaally good meal you just had there. And this feeling is as we have seen earlier, accompanied and followed by a strengthening of the connection between stimulus and behavior.
So basically we are an AI, designed by evolution with reward functions hard-wired into the neurobiological circuitry of our brains, and the means (intelligence) to hack those reward functions.
And guess what we have been doing.
Back to Capitalism
Capitalism is about companies and individuals competing with each other for clients. Everybody wants to sell their products and those who have the products that sell best, rise to the top. Overall, this system works amazingly well, because the competition within it, produces a lot of trial and error style evolution and therefore a steady stream of innovation and progress.
But the problem is that through this very process of innovation, people find ways to make products not only better but also more addictive. If the only thing that is being optimized is how much we buy or use a product, then addictiveness is a very good property for a product.
Capitalism, therefore, pushes products to become more addictive over time. And that is because we like to reward-hack ourselves. If we can have a product that has a superstimulus, we will gladly prefer that over one that doesn't have it. Because we are just like the bird foster parents and the cuckoo, if confronted with the right stimuli, we don't face much of a choice.
And heavily optimized things such as YouTube thumbnails or newspaper article headlines, most fast food, or computer games, target exactly that weakness of ours. They are products, perfected to get our attention, to get us to buy, click, and consume them. And the future is going to become only more addictive than it already is. Until it will become virtually impossible to resist the urge to buy certain things.
So to sum it all up:
Market forces make products evolve and evolving products become more addictive over time. Addictive behavior is bad for humans in the long run, because the evolutionary rules of thumb, are only rules of thumbs. They are proxies for what is good for us. So overoptimizing for them, is overoptimizing for the wrong metric. And that's the problem at the heart of capitalism in a nutshell. We are getting better at making ourselves addicted to things and are harming our physical and psychological health as well as our environment in the process.
A question that lingers on my mind: Is there a way to fix it? Can you organize a market such that the most addictive product is not the one that sells the most?