Capitalism's Hidden Algorithm: The Neuroscience of Uncertainty & Profit

By Sarah Baldeo

In the intricate dance of capitalism, knowledge isn't just power—it's currency. But this currency isn't evenly distributed. Capitalism thrives not on equal access to information but on its asymmetry. Why? Because where there's uncertainty, there's opportunity. And where there's opportunity, there's profit.

The Neuroscience of Uncertainty

Our brains are wired to seek certainty. Uncertainty triggers the amygdala, the brain's fear center, leading to stress and anxiety. Studies have shown that people often prefer a known negative outcome over an uncertain one, highlighting our discomfort with ambiguity.

Yet, it's this very discomfort that capitalism exploits. Those who can navigate uncertainty—armed with exclusive knowledge—stand to gain the most. And those who can train their brains to not only tolerate uncertainty but THRIVE in it - well, they have the GREATEST advantage.

Tariffs: A Case Study in Manufactured Uncertainty

Consider tariffs. When a government announces potential tariffs, markets react—not necessarily to the tariffs themselves, but to the uncertainty they introduce. Investors with insider knowledge or sophisticated models can capitalize on these fluctuations, while the general public bears the brunt of price increases and market instability.

Value Creation or GDP Cosmetics?

"Value creation" is a term often used to justify profit-making activities. But what does it truly mean? In many cases, it's about increasing GDP—a metric that doesn't account for wealth distribution or societal well-being. The creation of value, then, becomes a sanitized way of describing activities that may benefit a select few while leaving others behind.

The Role of the Brain in Economic Behavior

Neuroscience reveals that our decision-making processes are influenced by emotional and cognitive biases. The ventromedial prefrontal cortex, for instance, plays a role in evaluating risk and reward. Damage to this area can lead to poor decision-making, underscoring how our brains are integral to economic behavior.

Understanding these neural mechanisms can shed light on why certain individuals or groups are better equipped to navigate the uncertainties of capitalism.

So what does it all mean?

Capitalism doesn't just tolerate uncertainty—it feeds on it. The unequal distribution of knowledge ensures that some can exploit the system's inherent ambiguities for profit. As we strive for a more equitable society, recognizing and addressing these disparities in information access becomes crucial.

Sarah Baldeo is an AI Neuroscientist and regular media contributor on CTV News in Canada and NBC News in the USA. You can learn more about her work at www.sarahbaldeo.com.