Academic journal article Journal of Economic Issues

Turning Economics into an Evolutionary Science: Veblen, the Selection Metaphor, and Analogical Thinking

Academic journal article Journal of Economic Issues

Turning Economics into an Evolutionary Science: Veblen, the Selection Metaphor, and Analogical Thinking

Article excerpt

   But by scientifically colloquial usage we have come to speak of
   pre-Darwinian and post-Darwinian science, and to appreciate that
   there is a significant difference in the point of view between the
   scientific era which preceded and that which followed the epoch to
   which his name belongs. (Veblen 1919, 36)

In his article, "Why is economics not an evolutionary science?" Thorstein Veblen says that "economics is helplessly behind the times, and unable to handle its subject-matter in a way to entitle it to standing as a modern science" (1898b, 403). In addition, he claims that "modern sciences are evolutionary sciences" (1898b, 403). A way to remedy this problem and to turn economics into an evolutionary science is to introduce aspects of Darwin's explanatory model of biological evolution to economic theory. However, there are different possibilities how Darwinian concepts can be harnessed to further develop economic theory. This problem has triggered a conceptual-methodological debate in the economic community.

This paper discusses several explanatory approaches to economic phenomena --the concept of routines, Universal Darwinism, and the continuity hypothesis--that rely on concepts borrowed from biology. To emphasize the differences between these avenues, special attention is given to their dealing with the units and processes of selection in biological and economic evolution. Selectionist models analogous to phylogenetic biological evolution are prominent in many works in the field of evolutionary economics. Moreover, the relation of these approaches to Veblen's own notions and demands with regards to the conversion of economics into an evolutionary science is highlighted. How fruitful is the introduction of explanatory models stemming from biology as analogies to economic theory development? How do evolutionary--Darwinian--thought and economic evolution relate? In answering these questions, this paper offers an interpretation of Veblenian thinking that deviates from existing receptions. (1)

The paper is organized as follows: section two takes a closer look at processes and units of selection in the biological and cultural realms. It addresses the question of whether it is possible to delimit units of selection in cultural evolution and whether there is an analogy to the process of natural selection. Section three presents basic statements and underlying notions of the continuity hypothesis that can serve as an analytical framework for evolutionary processes in economics. The details of Veblen's notions of an evolutionary science are the subject matter of section four and the last section offers some conclusions.

The Role of the Selection Metaphor in Economic Theory

Although some economists claim the use of analogies to biological evolution can serve as a unifying research paradigm in evolutionary economics (Nelson 1995), it is still not clear in what sense Darwinian concepts are relevant for economics (see e.g., Vromen 2001; 2004; Witt 2003, 3-18; Cordes 2005c; 2006). While there is no doubt the human species is a result of natural evolution, how the modern forms of the human economy can be explained in terms of Darwin's model of biological evolution is a controversial issue. Many scholars interested in economic evolution refer to more or less abstract analogies to, or at least a metaphorical use of, Darwinian notions to arrive at an evolutionary concept of economic development. Often, the selection metaphor is considered the distinguishing principle of evolutionary economics (see e.g., Dosi and Nelson 1994; Nelson 1995).

One reason for this is that abstractions from natural evolution are the only existing well-established general notion of evolution. Consequently, neo-Darwinian adaptation principles of genetic variation and natural selection are considered the archetype of an evolutionary theory also in economics (Witt 2003, 7). In contrast to such an approach, Joseph Schumpeter and Edith Penrose, for example, explicitly denied Darwin's explanatory model of biological evolution any relevance for understanding economic development (see Schumpeter 2002; Penrose 1952; Witt and Cordes 2006). …

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