Darwinian Foundations for Evolutionary Economics
Stoelhorst, J. W., Journal of Economic Issues
The Revival of Veblen's Promise
Thorstein Veblen's (1898) Why is Economics Not an Evolutionary Science has been described as a manifesto for evolutionary economics that holds a promise that is yet to be fulfilled (Rutherford 1998). In this paper, Veblen presented the methodological outline of a Darwinian research program that would turn economics into a modern science. The starting point of this program was the recognition that to become a proper science economic theory should steer clear of teleology and be firmly committed to causal explanation (Hodgson 2003; 2004; Rutherford 1998). Veblen envisioned an evolutionary economics that would study the process of economic development, or "the sequence of change in the methods of . . . dealing with the material means of life" (1898, 387). This process was to be studied in terms of the individual actions that are "the motor forces of the process of economic development," (1898, 388) and in terms of the "causal sequence" (1898, 396) that explains the "cumulative growth of habits of thought" (1898, 394).
That the promise of Veblen's research program remains unfulfilled may be attributed to the confluence of a number of historical developments (cf. Hodgson 2004), but is also the result of Veblen's failure to consolidate his vision of a Darwinian economics in an analytical framework that his contemporaries and successors could build on and extend (Hodgson 2003; 2004; Rutherford 1998). As a result, post-Veblenian theory development in institutional and evolutionary economics has typically proceeded without much explicit consideration for the Darwinian foundations that Veblen advocated (Hodgson 2003; 2004). Rutherford (1998, 467) has pointed out that despite Veblen's insistence on causal explanation, his own discussions of "exactly how evolutionary processes work were frequently lacking." The central task in the project to revive Veblenian institutional economics is therefore to develop a framework that allows detailed causal explanations of economic development (cf. Hodgson 2004; 2005; 2007b). It is with this task that the current paper is concerned.
The proper role of Darwinism in efforts to rekindle Veblen's research program is the subject of a recent conceptual-methodological debate in this journal and elsewhere. This debate takes place at two levels. First, there is a general methodological debate about the ways in which Darwinism can inform theory development in institutional and evolutionary economics (Cordes 2006; 2007a; 2007b; Hodgson 2002; 2007a; Hodgson and Knudsen 2006; Nelson 2006; Poirot 2007; Stoelhorst and Hensgens 2006; Vromen 2004; Witt 2004). Second, there is a debate about how Veblen himself saw the role of Darwinism in realizing his vision of an evolutionary economics (Cordes 2005; Hodgson 1992; Ranson 2005; Rutherford 1998). This paper is concerned with the first debate, which is discussed in more detail below. The second debate, whether Veblen himself envisioned the use of Darwinism in quite the way advocated here, is an interesting question from the point of view of the history of ideas but not very relevant for attempts to ground Veblen's original research program in a more explicit and rigorous analytical framework. In fact, this paper's premise is that the development of the explanatory framework that Veblen left wanting depends on a broader set of Darwinian concepts than Veblen was willing or, given the state of theory in his time, able to adopt.
The Methodological Debate on Darwinism
There are three positions in the debate about the proper role of Darwinism in developing evolutionary economics. First, there are those who see the Darwinian variation, selection, and retention schema as a useful heuristic (e.g., Nelson 1995; 2006; Vromen 2004). Others advocate an explicit ontological commitment to Darwinism. This latter group divides into two opposing views. On one hand, there are those who advocate generalized Darwinism as the analytical framework for evolutionary economics on the grounds that it captures the ontological communality among all evolutionary processes (Aldrich et al. …