Evolutionary economics
Think tank: Institute of Economic Affairs
Author(s): Dr Erik Lidström
May 29, 2026
This report from UK think tank the Institute of Economic Affairs concludes that prosperity emerges from spontaneous market coordination, not conscious direction.
In a new paper, academic Dr Erik Lidström examines the evolutionary mismatch between human hunter-gatherer psychology and the demands of modern capitalist economies. Our brains evolved over two million years for small tribes of around 500 people.
The extended order of modern capitalism—anonymous, spontaneous, governed by price signals involving millions of strangers—is, in evolutionary terms, a very recent and alien environment. Our minds handle direct, face-to-face interactions well, but not the second and third-order effects of interventions in complex, interconnected systems.
Within this context, ever-increasing government overreach clashes with the self-organising systems that best accommodate the limitations of our primordial brains.
This paper concludes that prosperity emerges from spontaneous market coordination, not conscious direction—a counterintuitive truth that modern policymaking struggles to accept.
