Evolutionary economics and the competition between scientific paradigms (original) (raw)
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Economics as an Evolutionary Science
The Journal of Socio-Economics, 2004
Economists have long followed developments in the 'hard' sciences with an eye toward applying those developments to their own discipline. Hypothesis testing of positive statements, the use of mathematics as the formal language of economic theory, and the use of experiments are all examples of methods economists have borrowed from other disciplines. Economics as an Evolutionary Science is another attempt to improve the field of economics by borrowing the methodology of the natural sciences. Gandolfi, Gandolfi and Barash (GGB) try to incorporate what E.O. Wilson calls consilience (Wilson, 1998) into economics. Wilson argues that the natural sciences have advanced further than the social sciences because all the areas of the natural sciences overlap in a logically and empirically consistent manner. For example, chemists do not posit theories that violate the agreed upon laws of physics; instead chemists build upon those laws when extending their own field. This cross-relatedness and consistency has not been tried in the social sciences, argues Wilson, to the detriment of those who study it. GGB take up the gauntlet thrown down by Wilson, and attempt to link theory from the relatively hard science of biology to economics. In a bold and thought-provoking work, the authors try to make evolution the basis of economic analysis. Many economists have recognized the similarities between economic and evolutionary theory; in addition to making plain those similarities, this book moves further, and attempts to integrate evolution more fully into economics. The authors follow some lines of thought from both evolutionary theory and economic theory to their logical conclusions. Building on Stigler and Becker's (1977) idea that all consumers have the same utility function, the
The characterization of neoclassical economics as a "taxonomic science" and the understanding of the evolutionary possibilities of economic theorizing are central aspects of Thorstein Veblen's institutional thought. This paper seeks to provide elements for a contemporary resumption of such Veblenian elaborations. Thus, we aim to re-establish the dialogue between economics and biology, focusing on the historical and methodological spheres of the conversation. The first part of the paper demonstrates that evolutionary biology's analysis of the pre-Darwinian past relies on the same principles that Veblen used to build his criticism of neoclassical economics -namely, the principles of typology. The paper also shows how this approach had a negative impact on the theoretical elaborations of pre-Darwinian biology, and how it contributed to the problematic foundations of neoclassical economics. The paper further focuses on the key methodological principles of Charles Darwin's works, highlighting their importance beyond the field of biology, and pointing out that a Darwinian approach constitutes an ontological perspective, premised on what Geoffrey Hodgson and Thorbjørn Knudsen denote as "generalized Darwinism." Finally, the paper discusses certain concepts in the general theoretical debate of Darwinian ontology to stress the revolutionary role of Charles Darwin as a founder of this perspective and to explore the relationship between the ontological perspective and biological analogy.
Evolutionary Economics: Theory and Evidence
Furth Prize Competition, 1989
The ecosystems of we are part of have been produced by evolutionary forces. These forces, which we have termed natural selection and genetic mutation operate on the genotypes of individuals and are expressed in their specie-characteristic phenotype's ability to adapt to environmental circumstances. The primary environmental characteristics are climate, terrain and food resources. The availability of food is a result of geoclimatic conditions and is then further subject to competition, both intra and interspecie. Success is deemed to have occurred if indivduals propagate another generation, and the macroscopic results are growth and decay of relative populations of the various species. Population growth is indicative of greater "fitness" for the environment of members of that species. The operating principles are localized for the individual, ie., local optimization of food acquisition, offspring and conservation of genetic endowment drive the end results subject to macro processes of geological and climatic changes over which the individuals have no control. Now economic systems bear superficial resemblance to biological ecosystems in that there is competition for scarce resources, growth/decay of employment by economic enterprises and growth/decline in per capita wealth of a social system. Thus, it has been suggested that the paradigm of biological evolution can provide insights into the dynamics of economic systems. Classical economists postulated the principle of maximization of individual benefit subject to climatic and natural resource endowments as the driving force of economic activity, a principle comparable to the biological model of natural selection. Taking this a bit further, genetic endowment would be analogous to technological capability as expressed by the cultural endowment of a society. Cultures mutate over time to adapt to new circumstances. Thus economics is the evolutionary equivalent of food acquisition and consumption in the non-human biosphere. Since, for many millenia, until the Neolithic revolution, human efforts were primarily directed at hunting and gathering, primitive economics is just that, the search, location, capture, distribution and consumption of food. The Neolithic revolution allowed the human species to replace the search, location and capture steps with production through the cultivation of selected plants and the domestication of animals for food, labor and materials. Distribution and consumption steps were still necessary. The communication, command and technology infrastucture needed for capturing or producing food is fundamentally the same for primitive and modern societies; they are the foundations for political and economic relationships. Modern societies are characterized by greater complexity, larger populations and larger production/distribution systems, but the issues are the same. The purpose of this paper is to provide a summarized, exact mathematical model for the dynamics of evolutionary economic systems. That model can be applied to the evidence that is plentiful. It represents a digest of work that has been developed over the last twelve years and incorporated into a number of papers presented at various conferences [Karasik, 1983. 1984, 1985, 1986]. We will also show how the social dynamics intertwine with the economic ones and define the processes of cultural growth and decay, once more bringing the human element into center stage. The basic starting point for this model are two fundamental principles. Starting from the out-growth of economics from biology (and thereby physics), we find that certain relationships are invariant. Invariant principles are known as conservation laws. Conservation of energy is the most famous of these laws. This law operates in the biological realm as well in the guise of the
Redefining Evolutionary Economics
Evolutionary and Institutional Economics Review, 2006
The aim of this paper is to redefine evolutionary economics in view of its negative and positive identities. The negative identity is formed as a counterargument to neoclassical economics with the hypotheses of optimizing agents and equilibrium, and this functions as a 'vision' that leads to the positive identity. According to the vision, the market is not a universally designed or constructed system, but an autopoietic system or a spontaneous order. In order to specify the positive identity, we examine the ontological/epistemological double meanings of evolutionary economics that entail a recursive relation between economy and economics. Evolutionary economics is redefined as the economics of a largescale, complex and uncertain economy that exists as a loosely connected system with a micro-macro loop structure, facilitated by such social institutions as rules or conventions, multi-layered buffers and routines. It also means the 'analogical-evolutionary pluralist' approach within economics as well as meta-economics in terms of the relationship between economics and history of economics or other disciplines of science. Keywords: the negative and positive identity, bidirectional causal relation, analogicalevolutionary pluralism, meta-economics, large-scale and complex system, multi-layered adjustment, buffer, micro-macro loop.