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Evolutionary economics is a relatively new economic methodology that is modeled on biology. It stresses complex interdependencies, competition, growth, and resource constraints. Face-to-face trading interactions among on the New York Stock Exchange trading floor Economics, as a social science, studies human choice behavior and how it effects the production, distribution, and consumption of scarce resources. ...
Biology (from Greek βίος λόγος, see below) is the branch of science dealing with the study of life. ...
Competition is the act of striving against another force for the purpose of achieving dominance or attaining a reward or goal, or out of a biological imperative such as survival. ...
As Philip Mirowski has demonstrated in his book 'More Heat than Light', the first 200 years of economic theory was modeled primarily on physics — economic terminology like "labour force", "equilibrium", "elasticity", and "velocity of money", are no accident. The principles of this construction, inspired by Newtonian mechanics, implied that the world is guided by elegant deterministic laws, based on few principles such as the principle of least action. Philip Mirowski is a historical and philosopher of economic thought at the University of Notre Dame. ...
The first few hydrogen atom electron orbitals shown as cross-sections with color-coded probability density. ...
In economics the labor force is the group of people who have a potential for being employed. ...
Look up equilibrium in Wiktionary, the free dictionary. ...
Elasticity has meanings in two different fields: In physics and mechanical engineering, the theory of elasticity describes how a solid object moves and deforms in response to external stress. ...
Velocity of money In economics, the velocity of money refers to a key term in the quantity theory of money, which centers on the equation of exchange: M*V = P*Q where M is the total amount of money in circulation in an economy at any one time (say, on...
Sir Isaac Newton at 46 in Godfrey Knellers 1689 portrait Sir Isaac Newton, FRS (4 January 1643 – 31 March 1727) [OS: 25 December 1642 – 20 March 1727][1] was an English physicist, mathematician, astronomer, alchemist, and natural philosopher, widely regarded as one of the key figures in the history...
The principle of least action was first formulated by Pierre-Louis Moreau de Maupertuis, who said that Nature is thrifty in all its actions. See action (physics). ...
Conventional economic reasoning begins with the definition of scarcity, then assumes the existence of a "rational agent" bent solely on the attainment of one goal — the maximization of her/his welfare as defined by that agent. All relevant information is assumed to be held in common ("perfect information"), and the scheme of valuation ("preferences" or "tastes") used by the decision-maker is also assumed to be constant and native to the agent ("nonenvy" or "independent preferences"). Given the foregoing stipulations, the determination of the "rational choice" for any agent becomes a straightforward exercise in the differential calculus. In economics, scarcity is defined as not having sufficient resources to produce enough to fulfill unlimited subjective wants. ...
A rational agent takes actions which, given its knowledge of its environment, maximizes its chances of success. ...
Perfect information is a term used in economics and game theory to describe a state of complete knowledge about the actions of other players that is instantaneously updated as new information arises. ...
Preference (or taste) is a concept, used in the social sciences, particularly economics. ...
Rational choice theory is a way of looking at deliberations between a number of potential courses of action, in which rationality of one form or another is used either to decide which course of action would be the best to take, or to predict which course of action actually will...
Differential calculus is the theory of and computations with differentials; see also derivative and calculus. ...
Evolutionary economics derives from a more modern tradition of inquiry, which does not take the characteristics of either the objects of choice or of the decision-maker as fixed. It challenges the Newtonian worldview in economics in the similar manner, as it was challenged by Darwinian evolutionary theory in biology and by studies of self-organization in physics. A phylogenetic tree of all extant organisms, based on 16S rRNA gene sequence data, showing the evolutionary history of the three domains of life, bacteria, archaea and eukaryotes. ...
Sir Isaac Newton at 46 in Godfrey Knellers 1689 portrait Sir Isaac Newton, FRS (4 January 1643 – 31 March 1727) [OS: 25 December 1642 – 20 March 1727][1] was an English physicist, mathematician, astronomer, alchemist, and natural philosopher, widely regarded as one of the key figures in the history...
Charles Darwin Darwinism is a term for the underlying theory in those ideas of Charles Darwin concerning evolution and natural selection. ...
Biology (from Greek βίος λόγος, see below) is the branch of science dealing with the study of life. ...
Self-organization refers to a process in which the internal organization of a system, normally an open system, increases automatically without being guided or managed by an outside source. ...
The first few hydrogen atom electron orbitals shown as cross-sections with color-coded probability density. ...
Predecessors of evolutionary economics Karl Marx began in the mid-19th century with his schema of stages of historical development, by introducing the notion that "human nature" was not constant and was not determinative of the nature of the social system; on the contrary, he made it a principle that human behavior was a function of the social and economic system in which it occurred. Karl Heinrich Marx (May 5, 1818, Trier, Germany – March 14, 1883, London, England) was an immensely influential philosopher from Germany, a political economist, and a socialist revolutionary. ...
Alternative meaning: Nineteenth Century (periodical) (18th century — 19th century — 20th century — more centuries) As a means of recording the passage of time, the 19th century was that century which lasted from 1801-1900 in the sense of the Gregorian calendar. ...
Human nature is the fundamental nature and substance of humans, as well as the range of human behavior that is believed to be invariant over long periods of time and across very different cultural contexts. ...
Social structure (also referred to as a social system) is a system in which people forming the society are organized by a patterns of prelationships. ...
Human behavio(u)r is the collection of activities performed by human beings and influenced by culture, attitudes, emotions, values, ethics, authority, rapport, hypnosis, persuasion, and/or coercion. ...
Economy redirects here. ...
At approximately the same time, Darwin developed a general framework for comprehending any process whereby small, random variations could be accumulated over time and under the urgings of economic forces into large-scale changes that resulted in the emergence of wholly novel forms ("speciation"). Charles Robert Darwin FRS (12 February 1809 – 19 April 1882) was an English naturalist who achieved lasting fame by producing considerable evidence that species originated through evolutionary change, at the same time proposing the scientific theory that natural selection is the mechanism by which such change occurs. ...
A random variable can be thought of as the numeric result of operating a non-deterministic mechanism or performing a non-deterministic experiment to generate a random result. ...
Charles Darwins first sketch of an evolutionary tree from his First Notebook on Transmutation of Species (1837) Speciation is the theory of the evolutionary process by which new biological species are believed by some to arise. ...
This was followed shortly after by the work of the American pragmatic philosophers (James, Peirce, Dewey) and the founding of two new disciplines, psychology and anthropology, both of which were oriented toward cataloging and developing explanatory frameworks for the variety of behavior patterns (both individual and collective) that were becoming increasingly obvious to all systematic observers. The state of the world converged with the state of the evidence to make almost inevitable the development of a more modern framework for the analysis of substantive economic issues. For other people named William James see William James (disambiguation) William James (January 11, 1842 – August 26, 1910) was a pioneering American psychologist and philosopher. ...
Charles Sanders Peirce (pronounced purse), (September 10, 1839 – April 19, 1914) was an American polymath, born in Cambridge, Massachusetts. ...
John Dewey (October 20, 1859 – June 1, 1952) was an American philosopher, psychologist, and educational reformer, whose thought has been greatly influential in the United States and around the world. ...
Psychology is an academic and applied field involving the study of the human mind, brain, and behavior. ...
Anthropology (from the Greek word , human or person) consists of the study of humanity (see genus Homo). ...
Thorstein Veblen began his career in the midst of this period of intellectual ferment, and as a young scholar came into direct contact with some of the leading figures of the various movements that were to shape the style and substance of the newly-minted social sciences into the next century and beyond. Veblen saw the need for taking account of cultural variation in his approach; no universal "human nature" could possibly be invoked to explain the variety of norms and behaviors that the new science of anthropology showed to be the rule, rather than the exception. His singular analytical contribution was what came to be known as the "ceremonial / instrumental dichotomy"; Veblen saw that every culture is materially-based and dependent on tools and skills to support the "life process", while at the same time, every culture appeared to have a stratified structure of status ("invidious distinctions") that ran entirely contrary to the imperatives of the "instrumental" (read: "technological") aspects of group life. The "ceremonial" was related to the past, and conformed to and supported the tribal legends; "instrumental" was oriented toward the technological imperative to judge value by the ability to control future consequences. The "Veblenian dichotomy" was a specialized variant of the "instrumental theory of value" due to John Dewey, with whom Veblen was to make contact briefly at the University of Chicago. Norwegian-American economist and sociologist Thorstein Veblen Thorstein Bunde Veblen (July 30, 1857 – August 3, 1929) was a Norwegian-American economist and sociologist. ...
The social sciences are groups of academic disciplines that study the human aspects of the world. ...
The University of Chicago is a private university located principally in the Hyde Park neighborhood of Chicago. ...
The most important works by Veblen include, but are not restricted to, his most famous works (Theory of the Leisure Class; Theory of Business Enterprise), but his monograph Imperial Germany and the Industrial Revolution and the essay entitled Why is Economics not an Evolutionary Science have both been influential in shaping the research agenda for following generations of social scientists. TOLC and TOBE together constitute an alternative construction on the neoclassical marginalist theories of consumption and production, respectively. Both are clearly founded on the application of the "Veblenian dichotomy" to cultural patterns of behavior, and are therefore implicitly but unavoidably bound to a critical stance; Veblen's theories cannot be well understood unless one grasps that the dichotomy is at its core a valuational principle. The ceremonial patterns of activity are not bound to just any past, but rather to the one that generated a specific set of advantages and prejudices that underly the current structure of rewards and power. Instrumental judgments create benefits according to an entirely separate criterion, and therefore are inherently subversive. This line of analysis was more fully and explicitly developed by Clarence E. Ayres of the University of Texas at Austin from the 1920s. Terms like SOSE (Studies of Society & the Environment) not only refer to social sciences but also studies of the environment. ...
Clarence Edwin Ayres was the principal thinker in the Texas school of Institutional Economics, during the middle of the 20th century. ...
The University of Texas at Austin, often called UT or Texas, is the flagship institution of the University of Texas System. ...
The 1920s was a decade sometimes referred to as the Jazz Age or the Roaring Twenties, usually applied to America. ...
Joseph Schumpeter, who lived in the first half of 20th century, was the author of the book The Theory of Economic Development. In this book he proposed an idea radical for its time: The evolutionary perspective. He based his theory on the assumption of usual macroeconomic equilibrium, which is something like "the normal mode of economic affairs". This equilibrium is being perpetually destroyed by entrepreneurs who try to introduce innovations. A successful introduction of an innovation disturbs the normal flow of economic life, because it forces some of the already existing technologies and means of production to lose their positions within the economy. Joseph Schumpeter Joseph Alois Schumpeter (February 8, 1883 – January 8, 1950) was an economist from Austria and an influential political scientist. ...
(19th century - 20th century - 21st century - more centuries) Decades: 1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s As a means of recording the passage of time, the 20th century was that century which lasted from 1901–2000 in the sense of the Gregorian calendar (1900–1999...
Macroeconomics is the economics sub-field of study that considers aggregate behavior, and the study of the sum of individual economic decisions. ...
In economics, economic equilibrium often refers to an equilibrium in a market that clears: this is the case where a market for a product has attained the price where the amount supplied of a certain product equals the quantity demanded. ...
To meet Wikipedias quality standards, this article or section may require cleanup. ...
Kenneth Boulding was one of the advocates of the evolutionary methods in social science, as is evident from Kenneth Boulding's Evolutionary Perspective. Kenneth Arrow, Ronald Coase and Douglass North are some of the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel winners who are known by their sympathy to the field. Kenneth Ewart Boulding (January 18, 1910 - March 18, 1993) was born in Liverpool, England, graduated from Oxford University, granted United States citizenship in 1948. ...
Kenneth E. Bouldings evolutionary approach to economics, put forward most completely in his Ecodynamics (1978) and Evolutionary Economics (1981) had roots in his 1934 work on population theory and the age structure of capital as well as his Reconstruction (1950) with chapter titles like An Ecological Introduction and The...
Kenneth Arrow Kenneth Joseph Arrow (born August 23, 1921) is an American economist, winner of the Bank of Sweden Prize in Economic Sciences in 1972. ...
Ronald Coase (born December 29, 1910) is a British economist. ...
Douglass Cecil North (born November 5, 1920) is co-recipient of the 1993 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. ...
The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel (in Swedish Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is a prize awarded each year for outstanding intellectual contributions in the field of economics. ...
Present state of discussion One of the major contributions to the emerging field of evolutionary economics has been the publication of 'An Evolutionary Theory of Economic Change' by Richard Nelson and Sidney Winter. These authors have focused mostly on the issue of changes in technology and routines, suggesting a framework for their analysis. If the change occurs constantly in the economy, then some kind of evolutionary process must be in act, and there has been a proposal that this process is Darwinian in nature. Then, mechanisms that provide selection, generate variation and establish self-replication, must be identified. It has been suggested that Techie be merged into this article or section. ...
A routine can be any activity that recurs. ...
Charles Darwin Darwinism is a term for the underlying theory in those ideas of Charles Darwin concerning evolution and natural selection. ...
Selection is hierachically classified into natural and artificial selection. ...
The gene pool of a species or a population is the complete set of unique alleles that would be found by inspecting the genetic material of every living member of that species or population. ...
Self-replication is the process by which some things make copies of themselves. ...
It has been proposed that markets act as the major selection vehicles. As firms compete, unsuccessful rivals fail to capture an appropriate market share, go bankrupt and have to exit. The variety of competing firms is both in their products and practices, that are matched against markets. Both products and practices are determined by routines that firms uses: standardized patterns of actions implemented constantly. By imitating these routines, firms propagate them and thus establish inheritance of successful practices. A market is, as defined in economics, a social arrangement that allows buyers and sellers to discover information and carry out a voluntary exchange. ...
Firm can have several meanings: Firm - a loose legal term for a company. ...
Market share, in strategic management and marketing, is the percentage or proportion of the total available market or market segment that is being serviced by a company. ...
Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their creditors. ...
The Darwinian-based evolutionary approach has been criticized through indication that there is no mechanism in evolving economic entities that could correspond complex interactions of organisms’ genetic and phenotypic sphere. Unlike in biology, no separation exists between what could be analogue to genotypic level and phenotypic level, and there is no sufficient inertia in the ‘unit of inheritance’ for social behavior as is with ‘germ plasm’ of genes. Also, variation and selection occur in a less constrained form allowing greater degree of freedom compared to that of biological evolving entities.
Ulrich Witt has proposed that an appropriate tool set for socio-economic evolution analysis is provided by the range of self-organization and complexity theories, that deal with phenomena of emergence and increasing complexity. Ulrich Witt is the Director of Evolutionary Economics Group and Professor for Economics, Department of Economics, University of Jena, Germany. ...
Self-organization refers to a process in which the internal organization of a system, normally an open system, increases automatically without being guided or managed by an outside source. ...
Complexity theory can refer to more than one thing: Computational complexity theory: a field in theoretical computer science and mathematics dealing with the resources required during computation to solve a given problem Systems theory (or systemics or general systems theory): an interdisciplinary field including engineering, biology and philosophy that incorporates...
A termite cathedral mound produced by a termite colony: a classic example of emergence in nature. ...
Axiomatization of evolutionary economics A number of authors have aimed to outline common features of evolutionary schools in economics. In particular, such attempts were made by Kurt Dopfer and Carsten Herrmann-Pillath. According to their proposals, empirical axiomatics could be built on three propositions: Kurt Dopfer is the Professor at the Department of Economics, University of St. ...
Empirical is an adjective often used in conjunction with science, both the natural and social sciences, which means an observation or experiment based upon experience that is capable of being verified or disproved. ...
In mathematics, axiomatization is the process of defining the basic axiomatic systems from which mathematical theories can be derived. ...
- (1) real phenomena are actualizations of ideas,
- (2) actualizations are matter-energy manifestations in space and time,
- (3) real phenomena evolve.
Ideas are articulated in language and thus transported into the social domain. Generic ideas, in particular, can bring about cognitive and behavioral processes, and in this respect they are practical and associated with the notion of ‘productive knowledge’. It is generic ideas that evolve and form causal powers underlying the change. Evolutionary economics is essentially about changes in generic knowledge, and involves transition between actualized generic ideas. Actual phenomena, being manifestations of ideas, are seen as ‘carriers of knowledge’. Knowledge is information of which a person, organization or other entity is aware. ...
Three analytical concepts corresponding to ontological axiomatics are thus:
- (1) carriers of knowledge,
- (2) generic ideas as components of a process, and
- (3) evolutionary-formative causality.
The latter implies that no law that could apply universally in space and time, could be formulated. Instead, a ‘variable law’ (in terms of Charles Peirce) could be speculated about, that is a generic idea that shapes the social dynamics but changes over time. Knowledge is information of which a person, organization or other entity is aware. ...
Charles Sanders Peirce (pronounced purse), (September 10, 1839 – April 19, 1914) was an American polymath, born in Cambridge, Massachusetts. ...
The logic of the invariant of evolutionary process in social science is seen as the following sequence, described as an ‘ evolutionary regime’:
- In the first phase, generic ideas originate.
- In the second phase, macroscopic (population-level) adoptions governed by various mechanisms (selection, path dependence, learning effects etc.) occur.
- In the third phase, stabilization based on high-frequency adoption, happens.
Thus, evolutionary process is essentially irreversible, and it is seen as a transition from one state of generic idea dominance to another. Evolution represents a genealogy of regimes, that come into existence through adoption by populations of economic agents. This can be achieved either through Darwinian evolution (as considered by Nelson and Winter), or through emergence of ‘critical masses’ as suggested by Witt. Macroscopic is commonly used to describe physical objects that are measurable and observable by the naked eye. ...
Selection is hierachically classified into natural and artificial selection. ...
Path-dependence exists when the outcome of a process depends on its past history, on the entire sequence of decisions made by agents and resulting outcomes, and not just on contemporary conditions. ...
Learning-by-doing is the concept of economic theory. ...
Movie Poster for Irréversible Irréversible (2002, France) is a film written, directed, edited, and photographed by Gaspar Noé. It is considered to be one of the most controversial and disturbing films ever made, due to its explicit on-camera depiction of rape and a vengeful murder. ...
Ulrich Witt is the Director of Evolutionary Economics Group and Professor for Economics, Department of Economics, University of Jena, Germany. ...
Thus, evolutionary economics is concerned with the transformation of generic ideas, or social and technical knowledge, that determine states of socio-economic system, and dominating economic phenomena (products, technologies, institutional arrangements) within these. Every possible state, form and determining idea is a passing one, but its emergence is no occasion, it is guided by the logic of evolutionary laws.
See also Creative destruction, introduced by the economist Joseph Schumpeter, describes the process of industrial transformation that accompanies radical innovation. ...
Charles Darwin Darwinism is a term for the underlying theory in those ideas of Charles Darwin concerning evolution and natural selection. ...
The ecological model of competition is a reassessment of the nature of competition in the economy. ...
Face-to-face trading interactions among on the New York Stock Exchange trading floor Economics, as a social science, studies human choice behavior and how it effects the production, distribution, and consumption of scarce resources. ...
Institutional economics is a school of heterodox economics, with a focus going beyond economics usual concentration on markets to the exclusion of all else. ...
Natural selection is the process by which individual organisms with favorable traits are more likely to survive and reproduce. ...
Physical economics is a school of thought and area of research in economics that aims to study the economy along the lines of natural sciences (in particular, physics) with the use of mathematical modeling. ...
To meet Wikipedias quality standards, this article or section may require cleanup. ...
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