Are some countries more genetically inclined towards capitalism than others?

Claiming that there is a link between genetics and the economic system of a country will no doubt strike you as a preposterous hypothesis*.

I admit I’m skeptical about the following argument. But even if it’s wrong, at least it’s interesting. Here goes:

1) People who are more likely to support business and a capitalist system – entrepreneurs, inventors, investors and company CEOs – are deluded. They think the chances of their business, invention and investment being successful are much higher than they actually statistically are. They are overconfident and overoptimistic. They are willing to take more risks than is rationally justified. It’s probably a good thing some people are like this, otherwise the pace of technological creation and innovation would likely be much slower. But overoptimism also contributed to the housing bubble that contributed to the current economic crisis.

The thing is, most people are overly optimistic and overestimate their own abilities. One famous example is an American study where 90% of drivers believed their driving skills were ‘above average’. (See here and here for more examples, and buy Daniel Kahneman’s excellent book which covers a whole range of topics on human (ir)rationality and behavioural economics). But people who are more overoptimistic are more likely to become entrepreneurs.

2) Variation in how optimistic someone is, is significantly influenced by genetics; one study of Australian twins puts the genetic contribution at 36%. So environmental factors have an influence of around 64%.

3) Immigrants, given that they are taking a risk to move from one country to another, must be reasonably optimistic that they can make a success for themselves in a new country. They’re taking a risk by giving up everything that they know for a new culture (and possibly new language). This risk-taking certainly seems indicative of a mind-set similar to those of entrepreneurs, and there is strong evidence (see here and here) that many immigrants are indeed the entrepreneurial (genetic?) type, at least in America.

4) This implies that there is a genetic inclination towards capitalistic behaviour accumulating in certain countries. Perhaps countries such as America, which were founded by immigrants relatively recently, and continue to welcome them, have capitalism in their blood.

There are of course problems with this. It’s possible to find polls that purport to show that Americans are generally more optimistic than Europeans, but this is more easily explained by environmental rather than genetic factors (it might simply be that Americans feel cultural pressure to tell people, including pollsters, that they believe their life is improving, even if they secretly don’t believe this). Until there are more studies that look at genetic differences, this argument will have to remain a mere hypothesis.

If evidence for the link between genetics and inclination towards a particular economic system strengthens, and if it becomes possible for parents to select which genes they want their child to have, then one day we may find parents imposing their economic beliefs on their children not just by controlling the environment they grow up in, but also by controlling their genetics.

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* Did Steve tell you that, perchance?

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