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Evolutionary Concepts in Contemporary Economics.

This volume contains eleven essays by fifteen contributors. The contributors come from "old" institutionalism, "new" institutionalism, evolutionary economics, and related fields of inquiry. It is dedicated, appropriately, to Kenneth E. Boulding. An excellent, unified bibliography is included, but an index is not. The collection of essays should be useful to anyone interested in the revival of institutional economics and in the renewed attempts to construct economics as an evolutionary science, Each essay warrants a brief comment or two.

Richard W. England, the editor, provides a brief introduction to evolutionary concepts in economics. Perhaps the most important concept, and England believes the one that is the greatest obstacle to the general acceptance of evolutionary economics, is the concept that evolutionary economic processes are not characterized by optimality. Continuing the introduction to evolutionary concepts, Geoffrey M. Hodgson discusses the precursors of contemporary evolutionary economics. Hodgson focuses on Marx, Marshall, Schumpeter, and Veblen. He argues that Marx came before evolutionary concepts were well-developed; Marshall intended to incorporate biological evolution into his analysis but never really did; and Schumpeter tried to plant a dynamic theory in a static Walrasian garden. Only Veblen, Hodgson correctly argues, attempted a full-blown evolutionary economics.

In their essay, Stephen A. Resnick and Richard D. Wolff present the most lucid explanation of over-determination it has been my pleasure to read. The theory of overdetermination is an important one and has needed a clear statement for some time now. Resnick and Wolff have done us a favor here. This essay, alone, is worth the volume's cost to your library's shrinking budget.

Michael J. Radzicki and John D. Sterman present a formal mathematical model of a dynamic, evolutionary system. By doing so, they demonstrate that at least a good part of evolutionary economics is, after all, amenable to mathematical formalization. So, the mathematically-inclined need no longer turn up their noses at evolutionary economics.

Warren J. Samuels, A. Allan Schmid, and James D. Shaffer sketch out the general characteristics of an evolutionary approach as applied to the coevolution of law and economics. They explain how "The economy and the law mutually create each other . . ." [p. 96]. Their essay is probably too short for their subject, but they did an excellent job nonetheless.

Michael Hutter applies communication theory to a historical question involving the early evolution of money. Those interested in the evolution of ancient coins should find the essay useful.

Richard R. Nelson's essay deals with the coevolution of institutions and technologies. The coevolutionary approach raises fundamental questions about the causal role of market forces and about the meaning of economic efficiency in a dynamic setting. Nelson also suggests reconsidering the theory of comparative advantage. Comparative advantage may be due more to policy choices than to original endowments.

Giovanni Dosi and Luigi Marengo raise additional questions about the nature and role of the firm in evolutionary theory. In their essay they explore different dimensions of organizational competence, emphasizing learning competence over resource endowment in the evolution of organizations. The evolutionary theory of the firm is explored also in Randall Bausor's essay. Bausor reminds us that "Any enterprise's first product is itself" [p. 181]. The creating or designing of a firm, Bausor argues, involves the entrepreneurial exercise of imagination. Such an exercise, he points out, transcends mathematical optimization.

The editor of this volume, Richard W. England, also contributes an essay on the lessons that can be learned from nonequilibrium thermodynamics. He makes a number of interesting observations regarding irreversibility and instability and presents a simple model. He concludes his essay by emphasizing the need for innovative theory.

The last essay of the collection is by Richard B. Norgaard and is on the coevolution of economic and environmental systems. His discussion of the premises of modern Western thought and his discussion of the emergence of new premises are particularly interesting.

The collection of essays is well worth reading. It introduces the reader to some of the continued ferment taking place under the calm surface of academic economics.

William M. Dugger The University of Tulsa
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Copyright 1995, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Dugger, William M.
Publication:Southern Economic Journal
Article Type:Book Review
Date:Oct 1, 1995
Words:669
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