To explain the puzzle, I propose the theory of group selection. Selection takes place in the spread of subsistence cultures and technologies. Subsistence technologies are those methods of production that raise subsistence productivity more than they raise surplus productivity. A subsistence technology lowers the ratio of surplus to subsistence. As a result, it causes the equilibrium living standards to decline and drives the people who adopt it to migrate abroad for a higher living standard. In contrast, a surplus technology raises the living standards and attracts immigration. The natives who learn the surplus technology are reluctant to go to the “gentiles" to spread the “gospel". Therefore, migration is biased from the subsistence-rich regions to the surplus-rich regions. It spreads subsistence technologies faster than surplus technologies.
Ironically, subsistence technologies get spread faster by making people worse off. The paradox arises because individuals do not take into account the effect of their behavior on group welfare. An 18th-century Irish peasant would not refrain from cultivating potato - a crop imported from America - by foreseeing the misery of a denser population. Even if he refrained, he could not stop the other peasants from tilling potato and bearing more children. Everyone seeks a better life; each pursues her own agenda; but collectively, they evoke “the tragedy of the commons". If there had been no such biased migration, then living standards would have grown steadily as long as surplus productivity grows faster than subsistence productivity. However, migration offsets the local advantage of surplus growth by the global advantage of subsistence spread. Left alone, every place would have prospered; but globally, they are held in check by the interlock of selection-migration selects technologies by their surplus-subsistence characteristics. Selection picks the poverty-stricken and makes their lifestyle prevail. The same logic extends from technology to culture. Culture is the social norm that sorts out winners and losers. Winners gain status, respect and the favor of the other sex. To be such a winner, people show off in galleries and theaters, on catwalks and boxing rings. These surplus cultures divert resources from supporting a larger population to promoting one's relative status in society. In other words, if we define the growth rate of population as the group fitness, surplus promotes individual fitness at the expense of group fitness.The demand for surplus is the individuals' Nash equilibrium strategy, commonly held and genetically programmed, that survives natural selection and makes us who we are. No art or music would be possible but for the demand for surplus; and none would demand surplus but for the conflict of interest between individual and group. By the measure of fitness, surplus consumption is a prisoner dilemma; yet by the measure of utility, it is a blessed curse.Surplus culture makes people better off. It requires one to spend more on surplus and less on subsistence. As a result, population is lower than if the surplus culture is absent. In the long run, the average subsistence will hardly be affected but the average surplus will become larger. Overall, surplus is “socially free": when people desire more, they receive more in the end; and they do not have to pay for it by sacrificing average subsistence. The people who pay for the surplus are those who would have been born. However, surplus culture has a limit.Hedonism is checked by migration and invasion. It makes a people vulnerable to greedy neighbors: the high surplus attracts the invaders; and the low subsistence means fewer people to defend it. This is why the “arms race" of conspicuous consumption does not spiral out of control. Locally, the race might escalate; globally, it is suppressed by group selection. I call the process group selection because culture is a group characteristic. Culture affects the fate of the group; and by doing so, it decides its own fate. By suppressing surplus culture, group selection traces out a path of balanced growth. Along the path, mankind were trapped for tens of thousands of years in the constancy of living standards…Pursuing the individual fitness hurts the group fitness. The height of redwoods, the tails of peacocks, the colors of male guppy and the surplus of human society all are governed by the same principle of evolutionary biology: conflict is universal between group and individual, hence surplus is prevalent in nature. Surplus tends to escalate under the force of individual competition, but group selection harshly suppresses it.