Evolution for Everyone

Meet the Evolution Institute, the world’s first evolutionary think tank. The mission of the EI is to connect the world of evolutionary science to the world of public policy formulation. Only three years old, we have already made progress on childhood education, risky adolescent behavior, and the mother of all policy issues–the regulation of human social interactions.

Our conference on “The Nature of Regulation” was held only a few weeks ago at the headquarters of the National Evolutionary Synthesis Center (NESCent), NSF’s largest evolution-related center, which partnered with the EI to stage the event. The participants were an intoxicating mix of economists, political scientists, sociologists, anthropologists, historians, psychologists, neurobiologists, ecologists, theoretical biologists, social insect biologists and animal behaviorists. Communication was possible because everyone spoke the common language of evolutionary theory. An even larger “Community of Interest (COI)” provided input from a distance through the EI website, making the conference a comprehensive referendum on the nature of human regulatory systems.

One important theme that emerged was the yawning gap between economic theory and evolutionary theory. Economists are very smart people, but when smart people take off in the wrong direction, they go a very long way. As Eric Beinhocker (one of the participants) recounts in his book The Origin of Wealth, neoclassical economics was originally inspired by physics and led to an enormous body of formal theory based on assumptions that are required for mathematical tractability but that make no sense from an evolutionary perspective.

How great is the gap between economic and evolutionary theory? How well do some of the newest branches of economics, such as behavioral economics, bridge the gap? That will be the subject of my next few posts, based on the conversations that took place at the “Nature of Regulation” conference.

To start, a discussion of paradigms is in order. A paradigm is a configuration of ideas that is internally consistent but incompatible with other configurations. Let’s say that our current configuration of ideas is ABC but that the correct configuration is A’B'C’. Scientific progress is incremental when we can smoothly make the transition from ABC–>A’BC–>A’B'C–>A’B'C’. Problems occur when A’BC makes less sense than ABC because A’ is incompatible with B and C. When this happens scientists will stubbornly resist the transition from ABC to A’B'C’. Intriguingly, paradigms can be regarded as the intellectual equivalent of local stable equilibria in complexity theory and adaptive peaks in evolutionary theory.

If economics and evolution are different paradigms with a yawning gap between them, then it will be very difficult to get from one to another in an incremental fashion. Every time we try to make one assumption in economic theory more realistic from an evolutionary perspective, it will conflict with the other assumptions and will be resisted by those accustomed to the economic paradigm. Scientific progress will require comparing the two paradigms as package deals and accepting or rejecting them on that basis.

Changing paradigms is never easy, but if ever there was a need, it is for our understanding of the nature of regulation.

To be continued.

Comments

  1. #1 Hank Roberts
    December 8, 2009

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    On topic — I hope you can pull in Krugman.

  2. #2 Michael Blume
    December 8, 2009

    A wonderful project and an interesting post! And I do like the picture of the difficulties in paradigm shift. Yes, it’s definitely hard to overcome ingrained and institutionalized paths of thinking…

  3. #3 bob koepp
    December 8, 2009

    I’m a bit chary of the idea that neoclassical economics was originally inspired by physics, even if there are some broad analogies between theories in the two domains. There has certainly been physics envy, which is understandable given the power and the beauty of physical theory. But physics envy isn’t the same as physics emulation; and treating it as if it was the same will more likely than not lead us astray in our search for understanding. Apart from the dissideratum of “mathematical tractibility”, does the “enormous body of formal theory” that we find in economics look much like the kind of theory we find in physics? I’m not convinced.

  4. #4 Julian Garcia
    December 9, 2009

    I have the feeling that economists do not take evolution seriously, albeit they find it generally interesting. Evolution indeed should bring some order to the current disarray of behavioural sciences (economics included). “Ultimately” any regularity found in behaviour must have come by means of an evolutionary process. I think the reason for such a gap is that economists don’t necessarily see how ultimate explanations might help them deal with their proximate problems. Moreover, I think there’s another “evolutionary economics” that deals with innovation and here evolution is more of a metaphor, but in my personal opinion a metaphor that has been abused. This does not help either.

  5. #5 Adam Martin
    December 9, 2009

    You say, “Intriguingly, paradigms can be regarded as the intellectual equivalent of local stable equilibria in complexity theory and adaptive peaks in evolutionary theory.” And I AM intrigued. Can you point to any literature where paradigms are described in terms of complexity theory or adaptive peaks?

  6. #6 BdN
    December 10, 2009

    If you ever have time to include such an analysis, I would like to have your take on some of the economists’ critics towards the application of different economic theories to human behavior and biology. I’m thinking more specifically about game theory, which has been quite fundamental but has been criticized because it cannot apply to real life since the theory is not predictive : models take for granted that people are rational, the set of strategies is predetermined, payoffs are associated only with specific strategies and participants are assumed to have complete information about the situation, which is obviously not the case in real life settings.

    Bernard Guerrien has written a short but interesting book about this, unfortunately only in French as far as I know, quite simply titled La Théorie des jeux. A summary is available at his website. It’s in fact a chapter first published in A Guide to What’s Wrong with Economics edited by Edward Fullbrook : Is There Something to Expect from Game Theory ?

  7. #7 Michael Blume
    December 11, 2009

    @Julian Garcia

    Although I agree completely with your post, I want to add a person.

    I have the feeling that economists do not take evolution seriously, albeit they find it generally interesting.

    There was a great exception: Friedrich August von Hayek, nobel laureate in economics, live-long activist in evolutionary theory and critic of homo oeconomicus and other rationalist delusions. Personally, I am counting his evolutionary “Fatal Conceit” as one of the best (and less understood) books of the 20th century.

  8. #8 David Sloan Wilson
    December 12, 2009

    Thanks for these informative comments and I hope that more are forthcoming, as I present some of the outcomes of the EI’s Nature of Regulation conference in this informal setting.

    To Bob Koepp (3): Economic theory need not emulate physics in a narrow sense for me to make my main point, which is that formal analytical models must make highly restrictive assumptions to remain tractable, preventing them from moving in the direction of reality. The model of geometry and classical physics doesn’t even work for modern physics, as I state in E&E II. Theory plays an essential role, but not in this particular way, as I will address in a future installment.

    To Julian Garcia (4): I think that you hit several nails on the head. All roads lead to evolution, as I will elaborate in a future installment. Equal attention to proximate and ultimate causation is essential, as you say. You’re also right that one version of evolutionary economics, represented by Richard Nelson for example, treats evolution as a substrate-free variation-and-selection process that doesn’t require knowledge of human psychology. I think that there is some merit to this view, but that proximate psychological mechanisms become essential knowledge at some point.

    To Adam Martin (5): I have checked with two of my philosopher friends and colleagues, Elliott Sober and Massimo Pigliucci. Both seem to like the comparison of paradigms with local equilibria and adaptive peaks, but evidently not much has been written along these lines, providing an intellectual opportunity…

    To BdN (6): Thanks for the references. Your comment returns us to the appropriate role of theory in a field of inquiry such as economics and evolution. Making highly specific predictions about real life is one objective, but it requires the sort of models that are used to predict the weather, which are extremely limited by complexity and not at all theorem-like. Game theory models serve another purpose, in both economics and evolution, that helps to explore the parameter space of possibilities in conjunction with empirical research. They’re not theorem-like either, as I will try to articulate in a future installment.

    To Michael Blume (2&6): You’re right that Hayek took evolution and even multilevel selection seriously in his book The Fatal Conceit (1988) and elsewhere. Unsurprisingly, his rendering of group selection and the inferences that he drew from it require updating.

    In E&E II, I make it clear that any large field such as economics and evolution is heterogeneous and that a sizable minority of economists are tying to move their field in the direction of greater realism, including integration with evolutionary theory. Even Milton Friedman relied heavily on evolution to justify the principle of utility maximization. Yet his argument falls apart when you take evolution seriously, as I will show in a future installment.

    These paradigmatic considerations are very important to make progress, where decades of previous effort has failed.

  9. #9 Lyle
    December 12, 2009

    An interesting problem to look at from an evolutionary point of view is the obesity problem. Our bodies are behaving as they should if one lived in an environment where one did not know where the next meal is coming from. This is a problem with mammals and apparently reptiles (We know cats and dogs will get obese if given the chance, as will horses if grain fed, because they are adapted to eat grass). It might help the understanding to look at the problem from that light.

  10. #10 Simon Halliday
    February 1, 2010

    First, thanks for this post – trying to turn (or to help Economics evolve into) an evolutionary science is something that inspires me and more power to you.

    Second, yes Hayek did use evolution as a metaphor and brought an evolutionary epistemology into The Fatal Conceit, but he didn’t help to formalize the problems that many economists hope to deal with, e.g. out of equilibrium dynamics, that can be dealt with using more formal evolutionary ideas, say the replicator dynamics. For this see Sam Bowles’s text Microeconomics: Behavior, Institutions and Evolution where he gives a big nod to the work of Hayek.

    Third, and moreover, when one commenter says, “I think there’s another “evolutionary economics” that deals with innovation and here evolution is more of a metaphor, but in my personal opinion a metaphor that has been abused.” They need to look at the work of Herb Gintis, Samuel Bowles, Rob Boyd, Peter Richerson, and so many others because they do not misuse the metaphor, but do their best to formalize their thinking rigorously (rigor here not necessarily requiring math, but requiring an understanding of selection pressures).

    Fourth, on economics as bastard child of physics, as DSW says it does not harm his general point if currently economics does not resemble current physics, the point revolves around what occurred in the history of economic thought around the late 19th and early 20th centuries. Pareto, Marshall, Walras and others were trying to solve a problem, that is searching for a way to achieve and understand economic equilibrium, the tools of which appeared in contemporary physics and the introducion of ‘marginalism’. But, to get equilibrium Walras required such things as ‘tatonnement’ and what later became known (with Koopmans, Arrow, Debreu and other’s beautiful depictions) as the Walrasian Auctioneer – one of many farcical assumptions. The tools for out of equilibrium dynamics, punctuated equilibrium and other phenomena that we observe in evolutionary theory just weren’t there. And, as many economists and evolutionists can tell you, once you lock in to a specific equilibrium it can take a lot (e.g. a change of environment) before mutations allow the movement towards a different equilibrium. As DSW argues, we can look to evolutionary theory both to improve our understanding of economics as science, and to understand what will occur within economics in response to ‘evolutionary economics’ (say, dynamics of inter-group competition as in group selection models that have been used for modeling cultural evolution).

  11. #11 Bryan L. Boulier
    February 2, 2010

    I suggest that you read Matt Ridley’s book on “The Origins of Virtue”, Penguin, 1996. Ridley has a Ph.D. in zoology and was science editor of “The Economist”. His applications of economic tools such as game theory and comparative advantage are very persuasive examples of the value of economic analysis to understanding evolution. It is also worth pointing out that Adam Smith was the inspiration for Darwin’s evolutionary theory.