Tuesday, February 2, 2010
Evolutionary Economics May Not Be Useful After All
The idea that Darwinian theory isn't a good predictor for individual agents was a nice ah-ha moment for me. I'm trying to resolve that with my intuition that macroeconomics doesn't necessarily need to make individual prescriptions for action. This is going to require its own dedicated post.
Additionally, Rosenberg points out that the "environment" in economics is constantly changing, while the environment in evolution is essentially constant. This problem might be resolved by looking at relative time horizons, describing economic time as instantaneous, but since I'm taking an Austrian class at the moment I'm not sure I am well-prepared to do this.
Finally, his point near the conclusion that information affects economic agents and evolving creatures very differently feels like a dagger. "The information that the environment provides about relative adaptedness is costless and universally available." This is inescapably unlike anything I have heard from an economist and will need to be closely considered.
So, my initial reading of Rosenberg has led me to three points that suggest combining economics and evolution is a dumb idea. There are certainly more but on first reading those are the ones that stuck out to me, and I'll have my hands full simply trying to address them. I wasn't going to bother but Rosenberg extensively quoted Armen Alchian's paper "Uncertainty, Evolution, and Economic Theory," so I decided I better read that over as well. Alchian sees what I saw after finishing Dawkins: "The economic counterparts of genetic heredity, mutations, and natural selection are imitation, innovation, and positive profits."
So perhaps addressing Rosenberg will be an upcoming series for me. If you've got any recommended readings that might help, please leave them in the comments. (I'll be starting into Nelson and Winter, An Evolutionary Theory of Economic Change, as soon as it gets returned to the library).
Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty