Advanced Political Economy：Evolutionary Economics.pptVIP

Advanced Political Economy: Evolutionary Economics From Lamarck to Darwin Back? Evolution: Metaphor or reality? Mainstream economics based on analogies: Mechanics: equilibrium of mechanical system 19th century heat dynamics Essential questions How does the system reach equilibrium? What are the properties of equilibrium? Is the economy mechanical? Clearly not Is it ever in equilibrium? Always changing Changes both quantitative and qualitative in nature Are equilibrium questions the right ones to ask? Evolution: Metaphor or reality? Well-accepted concept of continuous change in biology But in economics? Irrelevant, a more appropriate metaphor, or the reality of the economy? Evolutionary perspective asks: How and why do things keep changing? What are the feedbacks between different organisms in an ecology? Are these better questions to ask than equilibrium ones? Will they result in Just embellishments to mainstream economics, or A completely different set of concepts? Evolution: Metaphor or reality? Adaptive change essence of biological evolution: Individual organisms alter in different ways More suitably adapted organisms do better Selection over time weeds out less well adapted… Can same be said for the economy? Perhaps… Individual firms/agents alter in different ways More suitably adapted firms/agents do better Selection over time weeds out less well adapted… Possibly some similarity, but some steps (e.g., weeding out process) not obvious. So analogy may be useful But use of analogy should not be constrained by inadequate understanding of evolutionary theory… Evolution: Metaphor or reality? Understanding of metaphor influences application “Pop” evolution is “survival of the fittest” Favours “law of the jungle” in social situations Let the weak lose, the strong win Actual evolution far more complex than this Symbiotic relationships often important (weak help other weak to be strong) E.g., Bees flowers Cars rubber (tyres) Feedback between evolution and environment