From Darwin to Wall Street: A Rebuttal

This article is a rebuttal to Drew Estes’s “From Darwin to Wall Street: Harnessing Evolutionary Theory for Smarter Investments.” In his post, Estes argues that economics should borrow ideas from evolutionary biology rather than physics. Like Estes, I challenge the philosophical core upon which finance is based. But I make an argument for building investment processes on a theistic worldview.

Estes asserts: “A product, whether a good or a service, is a firm’s DNA, and products comprise many sub-units, or “premes.” The preme is the gene of commerce. They are the “units of heredity” differentiating product-lines. Accordingly, premes are the primary “replicators” of commerce, and firms, like organisms, are merely their “survival machines.” [1]

Conclusions drawn from Estes’s article are eminently reasonable within the naturalist worldview. If existence led to essence, then insights from evolutionary theory within investments may prove useful. But what if essence led to existence?[2] The problem within finance is its philosophical core; that is, the worldview upon which our analytical frameworks are based.

Naturalism, the philosophical foundation of evolutionary theory, is in direct conflict with theist-based worldviews. If you start from a different philosophical foundation you will end with a substantially different investment process. For more details, see Financial Fruit Based on Philosophical Roots: A Christian Perspective. [3] Here, a brief sketch is made between the investment implications of two different philosophical foundations — naturalism and theism.

Estes laments, “No other science is so thoroughly ignored by its practitioners. … Economics should instead borrow ideas from evolutionary biology.” This departure from science may more reasonably be the result of wholesale adoption of evolutionary theory. Alvin Plantinga notes, “Scholarship and science are not neutral, but are deeply involved in the struggle between Christian theism, perennial naturalism, and creative anti-realism.”[4] C. S. Lewis notes, “Men became scientific because they expected law in nature, and they expected law in nature because they believed in a lawgiver.”[5]

There are rational justifications for building investment processes on a theistic worldview. The emergence of numerous funds focused on biblically responsible investing (BRI) would be unwarranted within naturalism. If Christian theism is true, then BRI-based funds are not only warranted but are likely to be beneficial.

Naturalism, Theism, and Finance

Plantinga argues, “there is superficial conflict but deep concord between science and theistic religion, but concord and deep conflict between science and naturalism.”[6] Thus, there are reasons that investment processes built on components of naturalism, such as evolutionary biology, will not perform well. For example, naturalism denies the concept of biblical sin, a key aspect of Christian theism.

Naturalism is defined as “the philosophical belief that everything arises from natural properties and causes, and supernatural or spiritual explanations are excluded or discounted.”[7] From a naturalist worldview, some form of evolutionary theory is logical.

Theistic-based worldviews depict humans as more than simply sensate animals.[8] Financial decisions are not reduced to simply advancing my own narcissistic goals regardless of who may be hurt. Ideals exist that are foundational to investment-related decisions.

Scientific activities usually focus on that which is repeatable but is not applicable in finance. According to Michael Ruse, science “deals only with the natural, the repeatable, that which is governed by law.”[9] This definition is too limiting as it rules out finance. According to John C. Lennox, science is a “method of inference to the best explanation.”[10]

Investment management is a challenging field of study as it suffers from performativity among other things. Performativity implies beliefs about financial prices that change financial prices. Further, understanding what it means to be human is critical. The reality of human depravity, including our own, aids in developing appropriate financial guardrails.

Two Economic Frameworks

Theistic worldviews have essence preceding existence: “In the beginning, God created the heavens and the earth.”[11] Naturalist worldviews have existence preceding essence. “I am an infinitesimal speck of carbon-based dust born in a time and place not of my choosing here for an incredible brief amount of time before my atoms are scattered back into the cosmos.”[12]

Modern economic analysis has moved away from a normative approach (what ought to be) to a positive approach (what is).[13] Modern economic analysis is positivist in flavor and fits well within naturalism. Theism-based economic analysis is normative in flavor and in direct contradiction to naturalism.

Since economic thought first became formalized over two centuries ago, there have been essentially two different views about wealth. One view, first defined by Adam Smith and Jean-Baptiste Say, is that wealth is primarily metaphysical — the result of ideas, imagination, innovation, and individual creativity — and is therefore, relatively speaking, unlimited, susceptible to great growth and development.

The other view about wealth, espoused by Thomas Malthus and Karl Marx, contends that wealth is essentially and primarily physical, and therefore ultimately finite. The modern presentation of this view argues that since usable energy is steadily diminishing into entropy, all wealth is really cost to be shared more equitably.”[14] Note modern economic theory is founded upon the doctrine of scarcity. The biblically-based approach is founded upon the doctrine of abundance coupled with a stewardship mandate.

Products or People

When applying evolutionary theory to commerce, it is understandable that the center of analysis rests on physical items. Estes asserts, “Products, in other words, are like DNA. They are complex structures of subunits called premes, and premes, like genes within DNA, battle for inclusion in products. A preme is any attribute impacting a product’s value proposition. It can be as minor as employees saying, ‘My pleasure,’ at Chick-fil-A or as major as iOS for Apple products.”[15]

When applying a theistic worldview to commerce, it is expected that the center of analysis rests on the metaphysical, primarily people. For example, Chick-fil-A’s corporate purpose is as follows: “To glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come in contact with Chick-fil-A.”[16]

Similarly, from Apple’s website: “Apple conducts business ethically, honestly, and in full compliance with the law. We believe that how we conduct ourselves is as critical to Apple’s success as making the best products in the world.” Apple CEO Tim Cook asserts, “We do the right thing, even when it’s not easy.”[17] Corporate executives from diverse worldviews share their focus on essence, not existence.

It is eminently more reasonable that people are at the heart of replicating products. Estes claims, “(Ideas float) about like pollen ready to fertilize a receptive entrepreneur’s mind.” Ideas are inherently metaphysical, and pollen is physical. Naturalism cannot admit the existence of ideas beyond some brain activity. Ideas are inherent in theistic worldviews and the reasonableness of a person’s idea rests in the correspondence between what is taking place in the mind and actual reality.

There are now at least 90 BRI-based financial instruments.[18] As C. S. Lewis notes, “In reality, moral rules are directions for running the human machine. Every moral rule is there to prevent a breakdown, or a strain, or a friction, in the running of that machine.”[19] The mere existence of at least 90 BRI-based funds suggests investors desire to invest in funds consistent with their intangible values. From a Christian perspective, the heart of the investment management challenge is the human heart.

[1]See Drew Estes, From Darwin to Wall Street: Harnessing Evolutionary Theory for Smarter Investments, available at https://blogs.cfainstitute.org/investor/ (22 August 2024).

[2] Moreland and Craig note, “A thing’s essence is an individual nature that serves to define what that thing is. Now if an essence is to exist, there must be conjoined with that essence an act of being.” (Bold in original.) See J. P. Moreland and William Lane Craig, Philosophical Foundations for a Christian Worldview, 2^nd edition, (Downers Grove, IL: InterVarsity Press, 2017), p. 477. For example, I am a soul (essence), and I have a body (existence).

[3]Forthcoming book by this author. See  https://robertebrooks.org/project/christian-apologetics-and-finance/.

[4]Alvin Plantinga, “On Christian Scholarship,” no date, http://www.veritas-ucsb.org/library/plantinga/ocs.html.

[5]Attributed to C. S. Lewis, quoted in John C. Lennox, God’s Undertaker: Has Science Buried God? (Oxford: England: Lion Hudson plc, 2007), p. 21.

[6]Alvin Plantinga, Where the Conflict Really Lies: Science, Religion, & Naturalism, 2011, p. ix.

[7]See, https://www.naturalnavigator.com/news/2012/07/meaning-of-the-word-naturalism/.

[8]My perspective is from the Christian worldview.

[9]Michael Ruse, Darwinism defended: A guide to the evolution controversies. (Reading, MA: Addison-Wesley, 1982), p. 322.

[10]John C. Lennox, God’s Undertaker: Has Science Buried God? (Oxford, England: Lion Hudson, plc, 2009), p. 32.

[11]See Genesis 1:1, Bible, English Standard Version.

[12]Emma Pattee, “Covid-19 makes us think about our mortality. Our brains aren’t designed for that.” The Washington Post, October 7, 2020, accessed online. Pattee is quoting Sheldon Solomon.

[13]See Milton Friedman, “The Methodology of Positive Economics,” in Essays In Positive Economics (Chicago: Univ. of Chicago Press, 1966. See also Tigers and Ghosts: Distinguishing Between Financial Risk and Uncertainty available at https://robertebrooks.org/project/opinion-editorials/.

[14]Warren T. Brookes, The Economy in Mind (NY: Universe Books, 1982), p. 12.

[15]See Estes (2024), previously cited.

[16]See https://www.chick-fil-a.com/about/company.

[17]See https://www.apple.com/compliance/.

[18]See https://www.faithdriveninvestor.org/mutual-funds.

[19]C. S. Lewis, Mere Christianity, Book III, Chapter 1, p. 59.