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A parting thought on evo-econ and the economics canon

In Uncategorized on February 11, 2010 by Randy

For all of you who are not steeped in economics, I’d like to reinforce a point. Grosso modo, the practice of economics is a monolith: the canon is neoclassical economics for microeconomics and some variety of Keynesian economics for macroeconomics. Micro is the study of individual (consumer) choice, firm-level choice, and how they meet in a market. This is the stuff of the era when economics arose from moral philosophy. As it is practiced now, the behaviors of consumers and firms are modeled in highly formalized mathematical language. Axioms/laws form a foundation for driving stylized behaviors of homogeneous agents, often construed to be representative of the population. There are strong axioms of rationality, perfect knowledge (and, often, foresight), and idealized choice behavior. Macroeconomics is the study of whole economies with even stronger idealization invoked. My characterization is that one never considers the aggregation of individual choices; only system-level rules matter. Homogeneity of consumers and firms is reinforced by subsuming them into the aggregate: there is consumption, investment, saving, wealth, and government at the system level, without regard to the distributions of these constructs across populations.

We have been examining evolutionary economics and some allied concepts which fall into the category of heterodoxy. Individual differences matter. Dynamics matter. Path dependence matters. The equilibration of supply and demand, THE market price, and global rationality are fictions.

I don’t want us to ask and answer questions about “what do economists believe and do in their science” with respect to the monolith. There is NO connection to the biological sciences through metaphor or analogy from the monolith. Alas, that places us into a messy position of having incommensurable approaches in the heterodoxy: alternative conceptions of dynamics (Darwinian, darwinian, Universal darwinian, Penrosian, Schumpeterian, neo-Schumpeterian, acculturalization, etc), alternative focal units of observation ( individuals, routines, firms, organizational forms, institutions, technologies, etc), and uncodified terms/constructs.

There have been attempts to bring complexity theory to bear on firm growth/evolution, market organization, technology adoption, and other dynamic processes. Self-organization is often invoked… and poorly understood. Autopoiesis is often used as a synonym to self-organization. There is a rich literature, IMHO, that relate biological evolution to complexity theory. But I haven’t seen a first cut at analyzing the subject though the lens of Phil Sci.

Lots to do…

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