Economics and Evolution: Bringing Life Back into Economics.

This is Hodgson's second book on this subject. The previous one, Economics and Institutions [1] can be looked upon as a companion text. The two works have a similar goal: "to map out the field and to raise the important questions, rather than to provide definitive answers [p. vii]." The author explains why he embarked on this task, "I have never been enamored of the neoclassical concept of equilibrium. It is the search for an alternative mode of theorizing to the mechanical, and particular acquaintance with the 'evolutionary' economics of institutionalists such as Thorstein Veblen, that led to this project to explore the past and future relationship between economics and biology [p. vii]."

This book is about the application of evolutionary ideas from biology to economics. It is also a bold, and in my opinion, successful attempt to present an analytical history of evolutionary theorizing in economics. What is evolutionary economics as presented by the author and understood by others writing in this recently blossoming field of economics? Besides the JEL survey in the March 1995 issue [4], note the newly established, Journal of Evolutionary Economics. The following passage from Alfred Marshall's Principles of Economics [3] quoted by Richard Nelson in the survey mentioned above is pertinent to understanding the genesis of evolutionary theorizing in economics:

The Mecca of the economist lies in economic biology . . . But biological conceptions are more complex than those of mechanics; a volume on Foundations must therefore give a relatively large place to mechanical analogies, and frequent use is made of the term equilibrium which suggests something of a static analogy [4. xiv].

The concept of economic evolution propagated by proponents of evolutionary economics is much closer to that of evolution of social culture than to that of evolution of genes or its much overused counterpart in social sciences, the concept of survival of the fittest. In fact Geoff Hodgson, like many other contemporary writers in this area, rejects the notion of "optimality" in the evolutionary process. On the other hand, evolution here does not also simply imply "development" or "qualitative improvement," meanings used by Schumpeter ("in dealing with capitalism we are dealing with an evolutionary process"). Contemporary writers in this area share a common suspicion of the neoclassical theory and derive inspiration from the writings of past and present authors such as Friedrich Hayek, Alfred Marshall, Carl Menget, Thorstein Veblen, Georgescu-Roegen, Richard Nelson and George Shackle. In fact the book is dedicated to the last three men. They reject the mechanistic and utilitarian underpinnings of the neoclassical paradigm, and especially its emphasis is mathematical formalism and the concept of equilibrium. They believe that the biological conceptions of evolution are closer to the heart of how economic variables change than are metaphors from Newtonian Physics popular in current orthodoxy.

Since it is impossible for me to touch on all the many themes in the book, I will choose one or two. Although there is much that I have learned from this book and recommend to fellow economists as food for thought, there are issues on which I disagree. The idea that economics is essentially an evolutionary science and, therefore, has much to learn from metaphors and conceptions in biology struck me as open to the same criticism as that made by Philip Mirowski among others of neoclassical economics, namely, that its roots are flawed as they were the product of a deliberate attempt in the past to slavishly copy the metaphors and symbolism of physics. Economics is a social science in the broadest term and its roots lie in many other sciences, natural and social. Why is it then that economists of different shades, the supporters and the critics of the present orthodoxy, seem to be enamored by the metaphors, analogies and symbolism of the natural sciences - Physics, biology or mathematics? Is it because of an inferiority complex that practitioners of the "soft" sciences have with respect to the "hard" sciences? This question has not been adequately answered. In my view, associating the destiny of our discipline so closely with one of the natural sciences, anyone of them, is dangerous and counter-productive. As Kenneth Boulding wrote, modern economics should be based on a plethora of foundations, not just one. Attempts to overemphasize any one foundation essentially "crowds out" the others.

The book is extensively researched, featuring 35 pages of notes and 60 pages of bibliography. There are four parts with a total of sixteen chapters in the book, the last chapter appropriately devoted to the basic theme captured in the subtitle of the book, "Bringing Life Back into Economics." In part I, the author provides a good introduction to the modern field of evolutionary economics. In part II, a superb history of economic doctrines, especially with emphasis on the roots of the modern evolutionary economics, is presented. The focus is on the writings of nineteenth century authors like C. Darwin, K. Marx, E Engel, H. Spencer, A. Marshall and Carl Menger. In part III, the writings of twentieth century authors T. Veblen, J. Schumpeter, and E Hayek are analyzed. Of these the treatment of Schumpeter is perhaps the most controversial. On the one hand there are those like Esben Sloth Anderson [1] who put Schumpeter on a high pedestal for his contributions to evolutionary economics. Hodgson, on the other hand believes, Schumpeter's credentials on this count are largely mythic. Yes, he was a great economic historian and sociologist, but not a great proponent of evolutionary economics.

I would recommend this book to all open-minded and thinking economists and especially to the students of the history of economic doctrines. This reviewer is particularly impressed by the growth and maturity in Geoff Hodgson's scholarship as a critic of neoclassical economics, between his previous book and the present one, and is keenly looking forward to the next book he writes on the subject.

Munir Quddus University of Southern Indiana 

References

1. Anderson, Esben Sloth. Evolutionary Economics: Post Schumpeterian Contributions. London: Pinter Publishers, 1994.

2. Hodgson, Geoffrey M. Economics and Institutions. Cambridge: Polity Press, 1988.

3. Marshall, Alfred. Principles of Economics, 8th edition. London: Macmillan, 1948.

4. Nelson, Richard, "Recent Evolutionary Theorizing About Economic Change." Journal of Economic Literature, March 1995, Volume XXXIII, Number 1, 48-90.

5. Schumpeter, Joseph. Capitalism, Socialism, and Democracy, 5th ed. London: George Allen & Unwin, [1942] 1976.