It’s tempting to think that business success is due to natural selection — especially when you’re on top.
But, as Natasha Loder of The Economist observed in yesterday’s “Marketplace” program (in honor of Darwin’s 150th birthday), Darwin himself would likely disagree.
“Artificial selection,” not natural selection, is what humans do, Loder argues. “Markets are more like unruly gardens than the wild forest full of nature red in tooth and claw. And we are always trimming, weeding and fertilizing this garden so it grows the way it suits us.”
For instance, our ongoing bailout process. Under natural selection, more companies would fail; we intervene because we need the services banks provide. More notably, the process for doling out the assistance is heavily biased by lobbying. Bigger, higher profile companies get the lion’s share — regardless of whether they were managed better or more poorly.
Does Loder mean that bad companies never get weeded out? No, but the process certainly isn’t as systematic as natural selection — and mistakes and anomalies are inevitable.
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