There were no economics in the Garden of Eden for there was no scarcity. Economics arises when we confront scarcity and must choose among competing values. Hence, economics involves trading off one scarce thing, time for example, for another.

Should I spend Sunday morning at church or walking in the woods appreciating nature? Should I allocate my tithe to the Salvation Army, Habitat for Humanity, or my church? We must choose among competing values, usually giving some portion to each. These are economic decisions. Bill Gates must decide which good cause most deserves his charity. Even he confronts scarcity of time, attention, and money.

Economics is the study of choice. And alas, few are naturally good at it. There is a reason for this; humans evolved to confront the problems of survival in small bands and groups, the subjects of traditional anthropology.

Humans are blessed with quite large brains but our rapid expansion of cognitive capacity occurred roughly 5,000 generations ago, around 100,000 BC. The structure of our brains was substantially determined when we were hunters and gathers. As a result, our brains are wired to meet challenges of ancient forebears. Those who failed didn’t leave progeny.

People are quite good at many things, recognizing faces and shapes, having depth perception, being alert to predators. Now however, we face complexities for which no brain modules have evolved. And this takes us to folk economics and current problems of choice.

In 2003, Paul Rubin of Emory University published “Folk Economics,” a paper addressing the difficulty of incorporating economic logic into our thinking. Here’s the key: folk economics is focused on wealth allocation, not production.

In this world prices allocate wealth but do not generate incentives to be more productive or increase efficiency. The folk economics pie is fixed in size; the question is who gets how big a slice. Here, jobs are limited. If someone gets one, another loses hers.

Few politicians understand why modern economics yields different policy prescriptions than folk economics. Even those who do, former senator Phil Gramm for example, face strong incentives to defer to folk prescriptions. Hence, politicians support protectionism and tariffs even when the results are harmful to the most vulnerable. We saw this when President Obama supported a 35 percent tariff on Chinese tires, those preferred by voters with modest means.

People actually are quite good at detecting cheating in exchange, but most are blind to the gains from trade. This means they seldom ask the key question, “And then what?” when considering reforms. This has quite serious ethical implications when political constraints are placed upon willing exchanges.

Political allocation always causes ethical as well as efficiency problems. It generates cheating and serious misallocations of valuable resources. This may matter little in a nation as wealthy as ours where most people have substantial buffers and considerable resiliency. In the Third World, however, tragedy often follows when politics determine the winners. All this is obvious to an economist but counterintuitive to normal people.

Peoples’ belief in folk economics arises from the presumption of scarcity. This explains the differing perception of economists and others. After the Garden of Eden, the great majority of people faced pervasive, fundamental scarcity of life’s material essentials. From the birth of Christ until the Enlightenment, about 1800, there was little improvement in nutrition, housing, health, or longevity. Death rates were so high that it wasn’t until the 1800s that European cities could even replace their population though natural increase.

1776 was a very good year for human progress. Adam Smith explained how to escape from poverty and American institutions soon fostered liberty and productivity. As a result, during the past 200 years we’ve achieved plenty.

The process of progress remains unknown in folk economics and presents intractable problems for those with good intentions but naïve understanding. For those who believe poverty is an ethical problem, economic understanding offers answers.