This paper contributes to the (re-)conceptualisation of responsible innovation by proposing an evolutionary economic approach that focuses on the role of consumers in the innovation process. After a discussion of the philosophical foundations and ethical implications of this approach, which bears an explanatory potential that has not been adequately considered in previous discussions of responsible innovation, we present a first step towards capturing the important but often neglected role of consumers in innovation processes (including responsible innovation): We propose an (...) agent-based model that incorporates a multidimensional space of characteristics in which new products or services are represented by more than the mere aspect of price and quality. Instead, innovations are denoted by a large set of characteristics, including also negative or harmful ones. The model is used to illustrate that consumers’ heterogeneity and bounded rationality – even if considered in a simple manner – indeed play a crucial role in the creation and diffusion of responsible innovation which can and should be used for further work in this field and for possible extensions of the model. (shrink)

Foster (economics, University of Queensland, Australia) and H lzl (economics, Vienna University of Economics and Business Administration, Austria) develop an empirically based foundation for evolutionary economics built on complex systems theory. Arguing that modern evolutionary economics is at a crossroads on both the theoretical and applied level.

Economic geographers increasingly consider the significance of history in shaping the contemporary socio-economic landscape and believe that experiences and competencies, acquired over time by individuals and entities in particular localities, to a large degree determine present configurations as well as future regional trajectories. Attempts to trace, understand, and investigate the pathways from past to present have given rise to the thriving and exciting sub-field of Evolutionary Economic Geography. EEG highlights the important factors that initiate, inhibit, or consolidate the contextual (...) settings and relationships in which regions and their respective agents, which comprise and shape economic activity and social reproduction, change over time. It has at its core the production and destruction of novelty in space, and the links between innovation and regional economic fortunes. The creation of knowledge, its movement and recombination within different regional ensembles of economic agents and institutions plays a critical role in the evolution of the space-economy. EEG provides a framework to disentangle the complexity of technological change and regional economic development based on a variety of theoretical and methodological approaches. In only a short time, EEG has established itself as a promising and rapidly evolving research framework with its focus on the driving forces of regional development across various scales and its attempt to translate findings into public policy. This book advances the theoretical foundations of EEG, and demonstrates how EEG utilises and operationalises conceptual frameworks, both established and new. Contributions also point to future research avenues and extensions of EEG, attempting to build stronger ties between theory, empirical evidence, and relevance to policy. This book was originally published as a special issue of _Regional Studies. _. (shrink)

This Element examines the historical emergence of evolutionary economics, its development into a strong research theme after 1980, and how it has hosted a diverse set of approaches. Its focus on complexity, economic dynamics and bounded rationality is underlined. Its core ideas are compared with those of mainstream economics. But while evolutionary economics has inspired research in a number of areas in business studies and social science, these have become specialized and fragmented. Evolutionary (...) class='Hi'>economics lacks a sufficiently-developed core theory that might promote greater conversation across these fields. A possible unifying framework is generalized Darwinism. Stronger links could also be made with other areas of evolutionary research, such as with evolutionary anthropology and evolutionary psychology. As evolutionary economics has migrated from departments of economics to business schools, institutes of innovation studies and elsewhere, it also needs to address the problem of its lack of a single disciplinary location within academia. (shrink)

This short paper is about the generalized evolutionary approach to the economics of science. Stephen Toulmin and David Hull are pioneers of the former rather than Karl Popper whose falsification thesis was sociologically naive. Useful directions for the future would go beyond the generalities of variation, transmission and selection towards making more explicit use of Darwin’s “two great principles.” The first is “the unity of types” i.e. common descent by employing phylogenetic methods to answer historical questions. The second (...) is “the conditions of existence” i.e. natural selection by making use of general principles of evolutionary ecology and socioecology to answer questions about why something evolved. (shrink)

This paper develops an account of evolutionary progress for use in the field of evolutionary economics. Previous work is surveyed and a new account set out, based on the idea of evolvability as it has been used recently in evolutionary developmental biology. The biological underpinnings of this idea are explained using examples of a series of phenomena that influence the evolvability of biological systems. It is further argued that selection pressures and developmental processes are sufficiently similar (...) to make this biological concept useful in economics. The new account is defended against a number of common objections to the notion of progress in evolving systems, including the claim that all stipulated measures of evolutionary progress are essentially arbitrary. It is argued that progress, understood as an increase in evolvability over time, is both philosophically well-justified and provides useful predictive and explanatory resources to those seeking to understand and manipulate evolving economic systems. (shrink)

This volume contains eleven papers – some theoretical, others empirical – given at the 1986 founding meeting of the International Joseph A. Schumpeter Society in Augsburg. By raising questions and offering additional statistical evidence, they further stimulate interest and discussion about the kinds of intuitive ideas that Schumpeter introduced in his seminal period before World War I. Whatever may be the academic mainline trend in economics, two policy-oriented 'disequilibrium' schools have flourished and still thrive: one stresses the need for (...) social redistribution as a counterweight to a negative propensity to unemployment; the other emphasizes the explicit roles of the dynamic entrepreneur, innovation and stressful competition in stimulating economic growth. And while it is possible that the heyday of the demand-side 'age of Keynes' is passing, it also may be true that the time of the supply-side 'age of Schumpeter' is now emerging. (shrink)

This is the first of two articles in which I reflect on “generalized Darwinism” as currently discussed in evolutionary economics. I approach evolutionary economics by the roundabouts of evolutionary epistemology and the philosophy of biology, and contrast evolutionary economists’ cautious generalizations of Darwinism with “imperialistic” proposals to unify the behavioral sciences. I then discuss the continued resistance to biological ideas in the social sciences, focusing on the issues of naturalism and teleology. In the companion (...) article (Callebaut, Biol Theory 6. doi: 10.1007/s13752-013-0087-1, 2011, this issue) I assess generalized Darwinism, concentrating on the roles of theory and model building, generative replication, and the relation between selection and self-organization; and I point to advances in biology that promise to be more fruitful as sources of inspiration for evolutionary economics than the project to generalize Darwinism in its current, “hardened Modern Synthesis” form. (shrink)

Despite growing interest in evolutionary economics since the 1980s, a unified theoretical approach has so far been lacking. Methodological and ontological discussions within evolutionary economics have attempted to understand and help rectify this failure, but have revealed in turn further differences of perspective. One aim of this article is to show how different approaches relate to different levels of abstraction. A second purpose is to show that generalized Darwinism is some way from the most abstract level, (...) and illustrates how it may be used to move towards more specific theoretical applications. Nevertheless, there is a long way to go before these become more evident. (shrink)

3. From. evolutionary. psychology. to. evolutionary. economics. 3.1 Shaken foundations Marshall's move from psychology to economics can be described as a slow shift rather than a sudden switch: Psychology seemed to hold out good ...

Welfare biology is the study of living things and their environment with respect to their welfare. Despite difficulties of ascertaining and measuring welfare and relevancy to normative issues, welfare biology is a positive science. Evolutionary economics and population dynamics are used to help answer basic questions in welfare biology : Which species are affective sentients capable of welfare? Do they enjoy positive or negative welfare? Can their welfare be dramatically increased? Under plausible axioms, all conscious species are plastic (...) and all plastic species are conscious. More complex niches favour the evolution of more rational species. Evolutionary economics also supports the common-sense view that individual sentients failing to survive to mate suffer negative welfare. A kind of God-made fairness between species is also unexpectedly found. The contrast between growth maximization, average welfare, and total welfare maximization is discussed. It is shown that welfare could be increased without even sacrificing numbers. Since the long-term reduction in animal suffering depends on scientific advances, strict restrictions on animal experimentation may be counter-productive to animal welfare. (shrink)

Biologists and economists use models to study complex systems. This similarity between these disciplines has led to an interesting development: the borrowing of various components of model-based theorizing between the two domains. A major recent example of this strategy is economists’ utilization of the resources of evolutionary biology in order to construct models of economic systems. This general strategy has come to be called evolutionary economics and has been a source of much debate among economists. Although philosophers (...) have developed literatures on the nature of models and modeling, the unique issues surrounding this kind of interdisciplinary model building have yet to be independently investigated. In this paper, we utilize evolutionary economics as a case study in the investigation of more general issues concerning interdisciplinary modeling. We begin by critiquing the distinctions currently used within the evolutionary economics literature and propose an alternative carving of the conceptual terrain. We then argue that the three types of evolutionary economics we distinguish capture distinctions that will be important whenever resources of model-based theorizing are borrowed across distinct scientific domains. Our analysis of these model-building strategies identifies several of the unique methodological and philosophical issues that confront interdisciplinary modeling. (shrink)

Nelson and Winter’s An Evolutionary Theory of Economic Change (1982) was the foundational work of what has become the thriving sub-discipline of evolutionary economics. In attempting to develop an alternative to neoclassical economics, the authors looked to borrow basic ideas from biology, in particular a concept of economic “natural selection.” However, the evolutionary models they construct in their seminal work are in many respects quite different from the models of evolutionary biology. There is no (...) reproduction in any usual sense, “mutation” is directed as opposed to blind, and there is no meaningful distinction between phenotype and genotype. Despite these substantial departures from the conceptions of evolutionary biology, I argue that the “evolutionary” economics of Nelson and Winter is indeed a legitimate extension of Darwinian evolutionary principles to a novel domain, and that the traditional conception of evolution by natural selection must be revised. The novel features of evolutionary economics models reflect the distinctive theoretical requirements faced by economists. I further contend that reproduction, heredity, blind variation, and the genotype/phenotype distinction are all inessential to evolutionary theory, and that their role in evolutionary biology is a domain-specific feature of biological theory. (shrink)

My brand of evolutionary economics recognizes, highlights, that modern economies are always in the process of changing, never fully at rest, with much of the energy coming from innovation. This perspective obviously draws a lot from Schumpeter. Continuing innovation, and the creative destruction that innovation engenders, is driving the system. There are winners and losers in the process, but generally the changes can be regarded as progress. The processes through which economic activity and performance evolve has a lot (...) in common with evolution in biology. In particular, at any time the economy is marked by considerable variety, there are selection forces winnowing on that variety, but also continuing emergence of new ways of doing things and often economic actors. But there also are important differences from biological evolution. In particular, both innovation and selection are to a considerable degree purposive activities, often undertaken on the basis of relatively strong knowledge. (shrink)

In the following pages I shall sketch some thoughts on Veblen’s implicit and explicit references to pragmatism and functional psychology, arguing that, besides Peirce and James, the functionalist theories and psychological experiments of the research group led by Dewey and Mead at the University of Chicago set the scene for Veblen’s intellectual revolution. More precisely, whilst Veblen did not mention it explicitly, it is possible to find in his writings of the years 1896-1900 references to Dewey’s notion of the “organic (...) circuit” and to Dewey’s and Mead’s theory of emotion.* This paper has three parts and three aims. In the first part, I outline Veblen’s criticism of economic science and his proposal for a new evolutionary economics, paying particular attention to Veblen’s implicit reference to Peirce’s logic. In the second part, I single out Veblen’s reference to Dewey’s and Mead’s works on functional psychology. In the third part, I will compare Mead’s hypothesis of the genesis of social interests in emotions with the evolutionary economic theory sketched by Veblen.* Tilman (1996: Ch 3) argued over pragmatic influences upon Veblen’s ideas concerning the human mind. James and Dewey’s functional psychology offered a psychological basis for his social theory. In my opinion, however, Veblen has been influenced by the Chicago School of functionalism more than by James’ functionalism, in particular by Dewey’s and Mead’s ideas. Moreover, even if Tilman (1998) points out Dewey’s intellectual debt to Veblen’s idea, his references consist normally in a period later than that considered here. (shrink)

Mark Blaug and I agree that if there is a realist interpretation of economic behavior to be discerned in Friedman, it is to be found not in Friedman's belief that the profit motive overrides other possible motives, but in his belief that a selection mechanism is working in competitive markets. Our joint sympathy for evolutionary economics is largely based on a conviction that the conception of competition as a dynamic evolutionary process is rather plausible. We disagree, however, (...) on two issues: first, how important the evolutionary conception was for Friedman's overall argument; and, second, whether we can learn something about the real world from rigorous formal analytical models. In this article, I explain and argue for my position on these two issues, and use Nelson and Winter's theory of evolutionary economics to support an illustrate my argument. (shrink)

David Hamilton is a leader in the American institutionalist school of heterodox economics that emerged after WWII. This volume includes 25 articles written by Hamilton over a period of nearly half a century. In these articles he examines the philosophical foundations and practical problems of economics. The result of this is a unique institutionalist view of how economies evolve and how economics itself has evolved with them. Hamilton applies insight gained from his study of culture to send (...) the message that human actions situated in culture determine our economic situation. David Hamilton has advanced heterodox economics by replacing intellectual concepts from orthodox economics that hinder us with concepts that help us. In particular, Hamilton has helped replace equilibrium with evolution, make-believe with reality, ideological distortion of government with practical use of government, the economy as a product of natural law with the economy as a product of human law and, last, he has helped us replace the entrepreneur as a hero with the entrepreneur as a real person. These articles provide an alternative to the self-adjusting market. They provide an explanation of how the interaction of cultural patterns and technology determine the evolutionary path of the economic development of a nation. This is not a simple materialist depiction of economic history as some Marxists have advocated, instead Hamilton treats technology and culture as endogenous forces, embedded and inseparable from each other and therefore, economic development. This volume will be of most interest and value to professional economists and graduate students who are looking for an in-depth explanation of the origins and significance of institutional economics. (shrink)

This book is the first systematic treatment of the philosophy of science underlying evolutionary economics. It does not advocate an evolutionary approach towards economics, but rather assesses the epistemic value of appealing to evolutionary biology in economics more generally. The author divides work in evolutionary economics into three distinct, albeit related, forms: a structural form, an evidential form, and a heuristic form. He then analyzes five examples of work in evolutionary (...) class='Hi'>economics falling under these three forms. For the structural form, he examines the parallelism between natural selection and economic decision making, and the parallelism between natural selection and market competition. For the evidential form, he looks at the relationship between animal and human economic decision making, and the evolutionary explanation of diversity in human economic decision making. Finally, for the heuristic form, he focuses on the plausibility of equilibrium modeling in evolutionary ecology and economics. In this way, he shows that linking evolutionary biology and economics can make for a powerful methodological tool that can enable progress in our understanding of various economics questions. Structure, Evidence, and Heuristic will be of interest to scholars and advanced students working in philosophy of science, philosophy of social science, evolutionary biology, and economics. (shrink)

Behavioral economics focuses mainly on how limitations of the human cognitive apparatus, risk attitudes, and human sociality affect decision making. The former two lead to deviations from rationality standards, the latter to deviations from rational self-interest. Some of these research interests are also shared by evolutionary psychology which, however, explains the observed deviations by features of the human genetic endowment conjectured to have evolved under fierce selection pressure in early human phylogeny. Important as the decision-making theoretical perspective of (...) the two disciplines is, it will be claimed to be too narrow to fully account for what an evolutionary approach has to say about economic behavior. This is particularly true regarding the questions of what choices are made and what causes them, i.e., the motivational aspects of behavior. In the language of economics this points to the agents’ preferences. This article discusses how preferences relate to the human genetic endowment, how they can change over time, and what conclusions have to be drawn from extending the analysis to the motivational side. (shrink)

The domain of “folk-economics” consists in explicit beliefs about the economy held by laypeople, untrained in economics, about such topics as, for example, the causes of the wealth of nations, the benefits or drawbacks of markets and international trade, the effects of regulation, the origins of inequality, the connection between work and wages, the economic consequences of immigration, or the possible causes of unemployment. These beliefs are crucial in forming people's political beliefs and in shaping their reception of (...) different policies. Yet, they often conflict with elementary principles of economic theory and are often described as the consequences of ignorance, irrationality, or specific biases. As we will argue, these past perspectives fail to predict the particular contents of popular folk-economic beliefs and, as a result, there is no systematic study of the cognitive factors involved in their emergence and cultural success. Here we propose that the cultural success of particular beliefs about the economy is predictable if we consider the influence of specialized, largely automatic inference systems that evolved as adaptations to ancestral human small-scale sociality. These systems, for which there is independent evidence, include free-rider detection, fairness-based partner choice, ownership intuitions, coalitional psychology, and more. Information about modern mass-market conditions activates these specific inference systems, resulting in particular intuitions, for example, that impersonal transactions are dangerous or that international trade is a zero-sum game. These intuitions in turn make specific policy proposals more likely than others to become intuitively compelling, and, as a consequence, exert a crucial influence on political choices. (shrink)

It is widely recognised that mainstream economics has failed to translate micro consistently into macro economics and to provide endogenous explanations for the continual changes in the economic system. Since the early 1980s, a growing number of economists have been trying to provide answers to these two key questions by applying an evolutionary approach. This new departure has yielded a rich literature with enormous variety, but the unifying principles connecting the various ideas and views presented are, as (...) yet, not apparent. This 2005 volume brings together fifteen original articles from scholars - each of whom has made a significant contribution to the field - in their common effort to reconstruct economics as an evolutionary science. Using meso economics as an analytical entity to bridge micro and macro economics as well as static and dynamic realms, a unified economic theory emerges. (shrink)

In this article, I critically respond to Herbert Gintis's criticisms of the behavioral-economic foundations of Ken Binmore 's game-theoretic theory of justice. Gintis, I argue, fails to take full account of the normative requirements Binmore sets for his account, and also ignores what I call the ‘scale-relativity’ considerations built into Binmore 's approach to modeling human evolution. Paul Seabright's criticism of Binmore, I note, repeats these oversights. In the course of answering Gintis's and Seabright's objections, I clarify and extend Binmore (...) 's theory in a number of respects, integrating it with Kim Sterelny's and Don Ross's recent work on the evolution of people as cultural entities. The account also yields a novel basis for choosing between socialism and what Binmore calls ‘whiggery’ as normative political programs. Key Words: theory of justice • bargaining theory • evolutionary game theory • human evolution • Ken Binmore • Herbert Gintis • Kim Sterelny. (shrink)

This article discusses the challenges raised by the inclusion of evolutionary elements in the theories of Carl Menger, Joseph Schumpeter, and Friedrich Hayek. Each adopted an idiosyncratic position in terms of method of inquiry, focus, and general message. The breadth of the topics and phenomena they cover testifies to the great variety of interpretations and potential uses of evolutionary concepts in economics. Menger, who made no reference to Darwin’s theory, advanced an “organic” view of the emergence of (...) social institutions. Schumpeter elaborated an original theory of industrial development based on the recurrent emergence and dissemination of innovations. Hayek adopted the biological notion of group selection and made it the central element in his theory of cultural evolution and the rise of the free market. The chapter concludes with a preliminary evaluation of the possible role that evolutionary theorizing might play in the future development of Austrian economics. (shrink)

This article argues that the (epi)genetic, cultural, symbolic, and environmental transmission channels are insufficient to explain the structure of modern human societies. Economic exchange of knowledge embodied in goods and services constitutes an additional transmission channel that makes more efficient use of limited human cognitive capacity. Economic exchange results in a gradual shift in societies from task-based division of labor to cognitive specialization. This shifts scarce cognitive resources away from production and into learning. It accelerates learning and reinforces the drive (...) towards specialization. Cognitive specialization may constitute another “major transition” towards a higher level of aggregation in human societies, with properties that differ from symbolic transmission. Collective control of individual market-based exchange is ensured by means of economic institutions that put a constraint on individual behavior. (shrink)

“Over a hundred years ago Thorstein Veblen expressed the view that the ontological or ‘metaphysical’ presuppositions of economics needed to be more realistic, a view that was a necessary part of his support for evolutionary thinking. When he was writing, though, evolutionary theorising in economics had been introduced in a rather incoherent manner resulting in an ontological mishmash - of a sort that led Veblen to coin the label neoclassical for those involved. As it happened (...) class='Hi'>evolutionary thinking never really took off in a coherent way in economics, and social ontological reasoning itself became somewhat marginalised. As I write, however, there are once more groups of scholars including economists developing systematic projects in social ontology. Now, however, the branch of non-social science attracting the most attention is quantum mechanics. An issue of interest that is explored here is whether the growing concern of economists with quantum insights will finally allow the specific ontological conception supported by Veblen to become established, facilitating, amongst other things, a turn to a coherent form of evolutionary thinking, or whether, as argued by some, it is more likely to lead to support for the ontological mix-up sustained by those Veblen labelled neoclassical.”. (shrink)

The failure of neoclassical economic theories to explain the nature and significance of the phenomenon of technological change is critically looked at in this article. Although there are numerous excellent works in the literature on technologicial change that criticize the inadequacy of neoclassical economists’ approach to this phenomenon, my objective, however, is to open a new discourse on technological change by emphasizing the epistemological significance of technology. It is argued that the concept of technology as essentially a process of knowledge (...) created for doing things and solving problems, and technological change as essentially a process of knowledge change occurring within the contexts of the political economic and social constructivist frameworks that inform the dynamics of this essentially qualitative process can address this failure. Empirically based analytical methodologies may be able to measure the impact of technological change, an evolutionary epistemology of technological change may be better equipped to understand and explain this phenomenon. (shrink)

The failure of neoclassical economic theories to explain the nature and significance of the phenomenon of technological change is critically looked at in this article. Although there are numerous excellent works in the literature on technological change that criticize the inadequacy of neoclassical economists’ approach to this phenomenon, my objective, however, is to open a new discourse on technological change by emphasizing the epistemological significance of technology. It is argued that the concept of technology as essentially a process of knowledge (...) created for doing things and solving problems, and technological change as essentially a process of knowledge change occurring within the contexts of the political economic and social constructivist frameworks that inform the dynamics of this essentially qualitative process can address this failure. Empirically based analytical methodologies may be able to measure the impact of technological change, an evolutionary epistemology of technological change may be better equipped to understand and explain this phenomenon. (shrink)

Coall & Hertwig (C&H) give an ambitious review about the broad range of grandparenting literature from the perspective of different disciplines. They aim to show, how evolutionary theory, sociology, and economics can mutually enrich each other. However, the differences between the evolutionary and the socio-economic perspective should be more clearly pointed out, because they usually deal with different research questions. Grandparents' well-being could be divided into its underlying components.

Henrich et al. reject the “selfishness axiom” within a narrowly-defined economic model, and are premature in claiming that they have demonstrated cross-cultural variability in “selfishness” as defined in broader evolutionary theory. We also question whether a key experimental condition, anonymity, can be maintained in the small, cohesive, social groupings employed in the study.

Henrich et al. reject the within a narrowly-defined economic model, and are premature in claiming that they have demonstrated cross-cultural variability in as defined in broader evolutionary theory. We also question whether a key experimental condition, anonymity, can be maintained in the small, cohesive, social groupings employed in the study.

Shortcomings in the target article preclude adequate tests of developmental/attachment and strategic pluralism theories. Methodological problems include comparing college student attitudes with societal level indicators that may not reflect life conditions of college students. We show, through two principal components analyses, that multiple tests of the theories reduce to only two findings that cannot be interpreted as solid support for evolutionary hypotheses.