EVOLUTIONARY ECONOMICS

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EVOLUTIONARY ECONOMICS ENVIRONMENTAL SOCIOLOGY
Can biological evolutionary principles be adapted
or modified to explain the origins and
proliferation of new organizational and market
forms?

• Is social evolution more a metaphor or an
  explanatory theory?
• Darwinian inheritance or Lackmarckian acquired
  traits?
• What social analogies to core biological
  concepts genes species (orgl form), population,
  inheritance, generation?

What alternatives to neoclassical economics
principles might socially construct a sustainable
economy on a planet with finite nonrenewable
resources and a fragile ecosystem?
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Monkeys Uncle
Social evolution is rooted in the biological
theory of evolution
 Alfred Wallace and Charles Darwin explained
continuously emerging novel biological forms or
attributes through population interactions with
environments. Evolutionary theory accounts for
the historical genealogies of proliferating,
divergent species.
Randomness of evolutionary paths - no progress
toward an end-goal (teleology) the blind
watchmaker man is not the Crown of
Creation Instead, developments are recurrent,
cumulative, probabilistic patterns with
unpredictable paths (yet open to post facto
understanding)
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Core Bio-Evolution Concepts
Population Organisms that share a common gene
pool (Speciesdf actually or potentially
interbreeding organisms) Variation Modifications
of forms are produced by chance via mutations,
genetic coding errors of individual
organisms Natural Selection Reproduction
survival of organisms whose heritable traits are
better suited to existing environmental
conditions Retention Persistence within a
population of the selected variation(s) over
successive generations Descent with
modification (Darwin) parents transfer their
genetically altered selected traits to their
offspring Inheritance involves transfer of
modified genetic codes, by not of individually
acquired attributes (a.ka. Lamarckian evolution)
What are orgl evolution equivalents to
biological concepts?
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Species Adapt to Fit Niches
Speciation new populations of reproducing
organisms capture scarce niche resources
(struggle for existence within between
species) Ecological Niche environmental habit
where a species lives and its functions within
that biotic community (e.g., predator,
prey) Niche competition Species struggle to
adapt to conditions within local environments
but, only one species can occupy a given niche
Darwin observed finches beaks modified to fit
Galapagos Islands plants

• Phenotype (outward physical traits) retained
  because of adaptive advantages enjoyed by
  individuals with superior survival and
  reproduction
• Alpha gorillas acquire more mates than others
• Faster cheetahs survive to reproduce their genes
• Genotype (internal inheritable info the DNA
  code) retained when a phenotype survives
  encounters within its niche environment

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Smooth or Jerky?
Niles Eldredge and Stephen Jay Gould (1972)
proposed a punctuated equilibrium theory of
evolutionary rates. Evolutionary changes occur
in relatively short bursts (millennia),
interspersed with long periods of comparative
stasis (millions of years).
They attacked phyletic gradualism, the dominant
idea of continually changing organisms, small
degrees of adaptation to fit the environment.
Fossil records show few intermediate forms,
implying that many species change very little
after their initial appearance. Many new species
can emerge quickly after mass extinctions, such
as the Yucatan asteroid collision that killed off
most of the dinosaurs, opening diverse ecological
niches for mammal species to populate.
Just horsin around
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Sociocultural Evolution
After Darwins Origin of Species (1859), social
scientists tried to apply biological principles
to explain sociocultural evolution
Social Darwinism ideology asserted that the
fittest races cultures inevitably dominate,
thus justifying 19th c. Euro-American imperialism
Herbert Spencers Larmarckian evolution posited a
slow, steady progress toward equilibrium as
individuals changed their habits, eventually
achieving perfect adaptation. He popularized the
notorious phrase survival of the fittest.

• Theorists depicted increasingly advanced
  societies cultures, typically because of
  technological innovations
• Morgan Tylor savagery, barbarism,
  civilization
• Marx ancient, feudal, capitalist,
  socialist-communist
• Lenski hunter-gatherer, horticultural,
  agrarian, industrial

Continuity with sociobiology evolutionary
psychology (Wilson Dawkins) Do selfish genes
determine all human action, culture, morality?
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Variation-Selection-Retention
Social evolutionary theory must identify
variation-selection-retention mechanisms creating
and spreading new forms

• Environmental conditions are sources of
  variation, constraining emergence of new orgl
  market forms selection for survival
• Technology is a major driving force creating
  macroeconomic growth (capital intensity, real
  wages) and the emergence of new markets for
  selling technological products services
• Innovations create new niches for firms to enter
  exploit Businesses are technology carriers by
  applying science (patents)

• Give examples of selection mechanisms to choose
  among variations
• Market profit is primary main selection
  mechanism for competitive firms economic markets
  weed out the inefficient firms
• Professional judgments political processes
  shape the selection of other orgl forms
  (nonprofit, public, voluntary, SMO)

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Organizational Genetics
Orgl genetics emphasizes transmissible
communicable characteristic traits selected by
environmental conditions
Bill McKelvey Howard Aldrich (1982 1983)
proposed a schema to classify organizational
forms by their dominant comps (competence
elements). Populations are polythetic clusters
of organizations with similar dominant comps that
are transferable among orgl members.
Comps basic knowledge and skills, carried in
individual minds, transmitted via communication
personnel exchanges with other organizations Techn
ologies, procedural guidelines, patents, job
descriptions, premiums, determined prescriptions
Evolutionary change involves new (re)combinations
of dominant comps, selected at the organizational
population level Are comps orgl analogs to
biological genes? Does compool genotype?
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Routines as Genes
Richard Nelson Sidney Winter (1982) developed
an evolutionary economics theory using computer
simulations of industry growth.
Evolution produces monopoly firms are selected
because differing profit rates yield varied
growth. But, entry of new firms into industry
restrains monopoly, as can innovation-imitation
processes that increase productivity variation
among firms. Orgl routines a major source of
genetic variation.

• Routines formal and tacit rules or capabilities
  internal to an organization that affect its
  activities productivity
• Standard operating routines governing existing
  resource stocks
• Investment routines responding to changing
  profits, growth
• Search routines for innovative technologies (RD)

Is routine is equivalent to gene, but org
analogous to species phenotype?
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Environmental Economics
Environmental economists concerned about
ecosystem protection conservation often clash
with neoclassical economics principles.
Green economists argue that, in the very long
run, resources are not limitless. Man-made
capital cannot substitute for natural capital to
provide raw materials, energy resources, food
biodiversity, sinks for air water pollution,
climate regulation. New principles must be
developed to create a sustainable economy within
our finite biosphere.

1. Limit resource use rates to levels of waste that
   the ecosystem can absorb
2. Exploit renewable resources to rates not
   exceeding ecosystems regeneration
3. Deplete nonrenewable resources at rates that
   dont exceed the development of renewable
   substitutes

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Self-Interest Runs Amok
Garrett Hardins (1968) Tragedy of the Commons
is a classic example of the inability of man-made
capital to substitute for natural capital.
Any resource commons such as public pasture or
an ocean fishery is prone to suboptimal
collective outcomes resulting from individuals
rational utility-maximizing choices. A bigger
boat means more wealth for a fisherman but too
many boats, chasing too few fish, eventually
decimate the fishing ground.
A Tragedy of the Commons situation occurs when
two or more reinforcing loops depend on the
availability of some limited common resource.
Initially, using the resource reinforces positive
gains in each loop. But, total activity
ultimately exceeds the resource capacity,
negatively affecting individual gains in each
loop.
What incentives and/or sanctions might avoid a
commons tragedy or restore its resource levels?
Taxes, credits, fines
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Environmental Sociology
Environmental sociology, an academic spin-off
from the environmental movement, theorizes
investigates sustainable development issues.
Important threads also run from the sociology of
natural resources, rural sociology, political
economy, and human ecology perspectives.
Geography and anthropology may also contribute
toward creation of a truly multi-disciplinary
approach to understanding how to improve global
well-being during the coming era of limited
economic growth.
Whatever their origins as material conditions,
most environmental problems are socially
constructed as the perceptions beliefs of
scientists, economists, media, activists, and
other interest groups. Resolving conflicts of
environment and economy ultimately requires the
negotiation of politically feasible solutions.
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References
Darwin, Charles. 1859. The Origin of Species by
Means of Natural Selection, or The Preservation
of Favoured Races in the Struggle for Life.
London John Murray. Eldredge, Niles and Stephen
Jay Gould. 1971. Speciation and Punctuated
Equilibria An Alternative to Phyletic
Gradualism. Pp. 82-115 in Models in
Paleobiology, edited by T.J.M. Schopf. San
Francisco Freeman Cooper. Hardin, Garrett.
1968. The Tragedy of the Commons. Science
1621243-1248. McKelvey, Bill. 1982.
Organizational Systematics Taxonomy, Evolution,
Classification. Berkeley, CA University of
California Press. McKelvey, Bill and Howard E.
Aldrich. 1983. Populations, Natural Selection,
and Applied Organizational Science.
Administrative Science Quarterly 28101-128.
Nelson, Richard and Sidney Winter.1982. An
Evolutionary Theory of Economic Change.
Cambridge, MA Harvard University
Press. Wallace, Alfred Russel. 1858. On the
Tendency of Varieties to Depart Indefinitely from
the Original Type. Linnean Society of London
Proceedings 353-62.