Evolutionary Economics: Program and Scope RECENT ECONOMIC THOUGHT SERIES Editors: William Darity, Jr University of North Carolina Chapel Hill, North Carolina, USA James K Galbraith University of Texas at Austin Austin, Texas, USA Other books in the series: Schofield, Nonnan: COLLECTIVE DECISION-MAKING: SOCIAL CHOICE AND POLITICAL ECONOMY Menchik, Paul L.: HOUSEHOLD AND FAMILY ECONOMICS Gupta, Kanhaya L.: EXPERIENCES WITH FINANCIAL LIBERALIZATION Cohen, Avi J., Hagemann, Harald, and Smithin, John: MONEY FINANCIAL INSTITUTIONS AND MACROECONOMICS Mason, P.L and Williams, R.M.: RACE, MARKETS, AND SOCIAL OUTCOMES Gupta, Satya Dev: THE POLITICAL ECONOMY OF GLOBALIZATION Fisher, R.C.: INTERGOVERNMENTAL FISCAL RELATIONS Mariussen, A and Wheelock, 1.: HOUSEHOLDS, WORK AND ECONOMIC CHANGE: A COMPARATIVE INSTITUTIONAL PERSPECTIVE Gupta, Satya Dev: GLOBALIZATION, GROWTH AND SUSTAINABILITY Gupta, Satya Dev: DYNAMICS OF GLOBALIZATION AND DEVELOPMENT Medema, Steven G.: COASEAN ECONOMICS: LAW AND ECONOMICS AND THE NEW INSTITUTIONAL ECONOMICS Peoples, James: REGULATORY REFORM AND LABOR MARKETS Dennis, Ken: RATIONALITY IN ECONOMICS: ALTERNATIVE PERSPECTIVES Ahiakpor, James C.W.: KEYNES AND THE CLASSICS RECONSIDERED Wolfson, Murray: THE POLITICAL ECONOMY OF WAR AND PEACE Jain, A.K.: ECONOMICS OF CORRUPTION Wheelock, J and Vail, 1.: WORK AND IDLENESS: THE POLITICAL ECONOMY OF FULL EMPLOYMENT Dean, James M and Watennan, A M.C.: RELITION AND ECONOMICS: NORMATIVE SOCIAL THEORY Gupta, Kanhaya: FOREIGN AID: NEW PERSPECTIVES MacDonald, R and Stein, J.: EQUILIBRIUM EXCHANGE RATES Chilcote, Ronald M.: THE POLITICAL ECONOMY OF IMPERIALISM: CRITICAL APPRAISALS Silber, Jacques: HANDBOOK ON INCOME INEQUALITY MEASUREMENT Elsner, W and Groenewegen, 1.: INDUSTRIAL POLICIES AFTER 2000 Young, W And Zilberfarb, B.: IS-LM AND MODERN MACROECONOMICS Evolutionary Economics: Program and Scope edited by Kurt Dopfer University of St Gallen " ~ SPRINGER SCIENCE+BUSINESS MEDIA, LLC Library of Congress Cataloging-in-Publication Data Evolutionary economics : program and scope / edited by Kurt Dopfer p cm (Recent economic thought ser ies ; 74) lncludes bibliographical references and index ISBN 978-94-010-3869-0 ISBN 978-94-010-0648-4 (eBook) DOI 10.1007/978-94-010-0648-4 Evolutionaryeconomics Neoclassical school of economics I Dopfer, Kurt II Series HB97.3 E957 2001 330.1 dc21 2001029843 Copyright © 2001 by Springer Science+Business Media New York Originally published by Kluwer Academic Publishers in 2001 Softcover reprint ofthe hardcover Ist edition 2001 AlI rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+Business Media, LLC Printed on acid-free paper Contents vii Contributing Authors INTRODUCTION Evolutionary Economics - Framework for Analysis ~rt~~r FOUNDATIONAL ISSUES Research Program and Ontology Evolutionary Economics - An Interpretative Survey Ulrich Witt 45 On the Ontological Foundations of Evolutionary Economics Carsten Herrmann-Pillath 89 EVOLUTIONARY MACROECONOMICS Dynamics: Long-run View and Population Thinking Evolutionary Approaches to Population Thinking and the Problem of Growth and Development J Stanley Metcalfe 141 Evolutionary Perspectives on Economic Growth Richard R Nelson 165 vi Statics: Division of Knowledge and Valuation Principles The Evolutionary Principles of American Neoinstitutional Economics Paul D Bush and Marc R Tool 195 Knowledge and Meliorism in the Evolutionary Theory of F A Hayek Richard Langlois and MOfit M Sabooglu 231 EVOLUTIONARY MICROECONOMICS Dynamics: Selection, Adaptation and Learning Processes Selection Processes in Economics Brian Loasby 253 Adapting, Learning and Economizing Richard H Day 277 Statics: Agency, Firm and Economic Structure 10 Early Signs of a Revolution in Microeconomics Jacques Lesourne 299 11 Evolutionary Theories of the Firm: Reconstruction and Relations to Contractual Theories Nicolai Foss 319 Subject Index 357 Contributing Authors PauiD Bush Nicolai J Foss Department of Economics California State University Fresno 5245 North Backer Avenue Fresno, CA 93740-0020 U S.A Department of Industrial Economics and Strategy Copenhagen Business School Howitzvej 60, 6th floor DK-2000 Copenhagen F Denmark Richard H Day Carsten Herrmann-Pillath Department of Economics University of Southern California University Park Los Angeles, CA 90089-0253 U.S.A Lehrstuhl fUr gesamtwirtschaftliche und institutionelle Entwicklung Universitat WittenlHerdecke Alfred-Herrhausen-Str.50 D-58448 Witten Germany Kurt Dopfer Institute of Economics FGN Universitiit st Gallen Sandrainstrasse 21 9010 St Gallen Switzerland Richard Langlois Department of Economics University of Connecticut 341 Mansfield Road Box U-63, Room 328 Storrs, CT 06269-1063 U.S.A viii Jacques Lesourne Conservatoire National des Arts et Metiers 2, Rue Conte 75003 Paris France Brian Loasby Department of Economics University of Stirling Stirling, FK 4LA United Kingdom J Stanley Metcalfe School of Economic Studies University of Manchester Dover Street Building Oxford Road Manchester M13 9PL United Kingdom Richard R Nelson School ofIntemational & Public Affairs Columbia University 420 West 118th Street New York, N.Y 10027 U.S.A Miiftt M Sabooglu Institut des Sciences Economiques et Sociales Universite de Fribourg Bureau 5116B Misericorde 1700 Fribourg Switzerland MarcR Tool 5708 McAdoo Avenue Sacramento, CA 95819-2516 U.S.A Ulrich Witt Max-Plank-Institut zur Erforschung von Wirtschaftssystemen Abteilung Evolutionsokonomik Kahlaische Strasse 10 07745 Jena Germany EVOLUTIONARY ECONOMICS: FRAMEWORK FOR ANALYSIS Kurt Dopfer* Major Streams: Classical, Neoclassical and Evolutionary Economics What is evolutionary economics? What are its paradigmatic-ontological foundations, and what would an evolutionary research program for economics look like? How evolutionary ideas fit in with existing research programs and teaching curricula? Questions like these need to be considered by economists given the increasing number of publications which employ an • This introduction includes only references that relate to the work of the contributors or to the literature mentioned there I acknowledge gratefully valuable suggestions and comments by Felicia Fai, John Gowdy, Brian Loasby, Matthias Klaes, Jason Potts, Klaus Rathe, Rolf Steppacher, Jack Vromen and Ulrich Witt A token of gratitude goes also to Pascal van Griethuysen, Lukas Hagen and Silvia Brandli for their editorial assistance, and to Juli IrvingLessmann for her substantial assistance with regard to my English prose All blame for the work as it stands should go to my address EVOLUTIONARY ECONOMICS: PROGRAM AND SCOPE evolutionary approach and the establishment of new scientific societies and journals which carry the label "evolutionary" The present volume brings together ten papers by economists who have made outstanding contributions to various fields of evolutionary economics The classical economists of the second half of the 18th century detached economics from moral philosophy, developing it into an independent discipline The new discipline dealt with two grand questions Firstly, how could order arise from the interactions of autonomous individuals without governmental intervention? This question became central after the social schemes of the ancien regime that regulated occupations and prices broke down and the citizens became largely autonomous in making their own decisions in the market place Following Ferguson's recognition that market order is "the result of human action, but not the execution of any human design" (quoted in Langlois' and Sabooglu's paper), Adam Smith was the first to provide cues for an understanding of how markets could organize themselves and order could, in a context of autonomous and self-interested individuals, arise spontaneously The second historical phenomenon that has called for a theoretical explanation was the rapid development of industry propelled by technological progress such as the invention of the steam engine and the power loom The new technological dynamic was accompanied by a broad sectoral shift from agriculture to industry, structural changes in the areas of employment and consumer demand, and far-reaching institutional changes The classical model was directed towards the grand question of whether the rapid growth of the industrial economy could eventually solve the problem of subsistence, or whether the new industrial regime represented merely another chapter in a "dismal science" Robert Malthus and David Ricardo developed the pessimistic doctrine of classical economics; Smith, in turn, was more optimistic, pointing in his writings to the advantages of the division of labor and specialization When we look back from our position in the 21 st century at the past two hundred years, we can see that Smith's optimistic view is in accord with the actual development of the industrial countries Analyzing the secular course of economic history, John Stuart Mill took up the question of the long-run "Stationary State" and introduced thereupon the distinction between economically "advanced" and "backward" countries It is remarkable that all the classical economists, including Malthus, Ricardo, and later Karl Marx, were ultimately optimistic about the future secular course of mankind Modern evolutionary economics has taken 360 119, 187,221,256,260-267, 270,279,283,284,286,287, 291,293,302,303,307,308, 316 decision-rules 172,292, 308, 323, 328 de-co-ordination 70 see also coordination, see also re-coordination determinism 16, 126, 127, 150, 155,167,220,291,293,307 development 2-6,13,14,31,40, 112,142, 143, 149-155, 157, 159, 160, 162, 168, 176-182, 189, 331 see also evolution see also research and development diachronic 303 economic 2-4, 69, 71, 75, 121, 125, 127, 142, 147, 149, 195, 268,274,279,304,308 diachronic dimension 92, 113, 120, 125-128 see also development differential advantage 207, 211, 213,214,217 differential (firm) growth see growth see also firm differential fitness see fitness diffusion 11, 17,26,29,34,36,50, 59, 60, 62, 63, 68, 77, 109, 110, 148,174,219,246 logistic 60, 62 technology see technology disequilibrium 38, 79, 280, 281, 292,293,324,325 dissipative structure see structure diversification 74, 328, 342 diversity 122,142,146,158,160, 161, 180,304,325,350 see also variety see also heterogeneity divisibility 271, 273 SUBJECT INDEX dominant design 39, 177, 179-181 see also blueprint dualism 199, 200, 203 Cartesian 199,200 dynamic increasing returns see returns dynamics 47,50, 111, 149, 152, 154,209,331,332,349 economic 40, 169,281,282, 307,311-314,327,328,349 ecology 43,73,117, 127, 128,209 see also environment economic evolution 141, 147, 151, 152,154,166,308,309,327329 phylogenetic theories of 28 economic growth see growth economics 7,17,44,90,93-98, 100, 101, 104, 105, 108-110, 115-117,121-123,125,129, 130,162,165,166,171,183, 190, 195, 196,220,255,258, 259,263,267,269,274,280283,302,309,317,319,320, 330,335 behavioral 10, 15,92, 118, 120, 284,320,321,328,331,347, 348 contractual326,347 evolutionary see evolutionary economics experimental92, 118, 120 institutional see institutional economics neoclassical 74-76, 79, 103, 172,174,196,197,202,208, 217,220,232,241,280,320323,325,347,348 transaction cost 333,336,337, 342, 343, 348 see also transaction costs SUBJECT INDEX economizing 30,51,277-283,292, 332,337,348 see also efficiency economy 15, 18,38,45,49,56,6670, 74, 75, 92, 107, 108, 115, 122-124,141-148,153,160, 161,173,175,207,254,257, 260,261,264,265,274,293, 300,308,309,313,314,323, 329 market 169,280-282 efficiency 39,91, 114, 115, 153, 158, 159, 189,207,210-212, 215-218,245,257,258,261, 264,327,335,343,344,347, 349 see also economizing see also markets, capital Eigen-time 91, Ill, 127 see also time emergence 12, 17,49,51,56,58, 65,69, 71, 72, 75, 91, 102, 108, 117,120,123,180-182,322, 331,332,336,342,348 emergent properties 121, 123, 146 emergent structure 11, 120 of order/regularities 234, 237 endogenouity of economic phenomena 3,6, 18,44,46,48, 51,53,54,70,74,279,284, 307,315,317,327 energy 7-9, 12, 16, 19,34,49, 74, 78,91,92,112,115-117,127, 128, 142 English-Scottish school of economics entrepreneurship 36, 112, 114, 147, 152,265,268,281,283,308 entropy 113, 115-117, 125, 127 see also physics see also irreversibility see also thermodynamics 361 environment 30-33, 54, 69, 73, 74, 76,111-116,120,126,127, 171,182,209,210,214,216, 217,219,237,240,262,272, 277,278,290,291,301,308, 313,331,332,345 see also ecology cultural 53 economic 9, 74, 255, 260, 268, 269,272,274,284,285,291, 323 innovative 51 selection see selection environmental changes see change environmental damages 72, 127, 272 environmental feedback see feedback epistemology 8,13,14,49-51,9194, 100, 103, 104, 106, 108, 109, 112, 239, 346 bimodal 109 evolutionary 100 instrumentalist 90 realist 90, 102, 117 equilibrium 38, 45, 57, 58, 67, 75, 76,99, 109, 118, 147-149, 153, 155,160,162,165,170, 186, 187,209,280-284,291-293 economic 3, 147, 148,254, 255,258,265,274,280,281, 284,285,292,293,300,302, 307,308,310,311,313,314, 316,320,324,325,327,348 evolutionary 38, 39 general 17, 69, 104, 115, 167, 280-282, 284, 300, 305 see also general equilibrium theory see also economics, neoclassical mechanical concepts of 165, 169,220 moving 167,169,170,174 362 Nash 186,316 out of/far from 147-149, 153, 160,162,281,293,300 punctuated 185 see also biology error 29,31,91,100,104,105, 306, 308 see also trial and error as a source of knowledge 105 role in learning 76, 209, 221, 285,287,288,293 evolution 46, 48, 49,55,56, 71, 90, 91,99, 102, 118, 142, 147, 151, 154, 166, 173, 176, 179-182, 188,219,220,223,233,236, 238,242,244-249,262,263 see also development biological 33, 34, 47, 74, 90, 105, 110, 112, 185,235,236, 262, 272, 279, 322 see also biology cultural 42, 43, 47, 71, 186, 190, 236, 246-248 economic 16,21,29,30,33, 41,42,46-48,54,71-75,79, 90,260,261,264,267,282, 283,308,309,314,317,327329 see also evolutionary economics firm 332 idea of 46,48,49,90,91,99, 102, 105, 110, 112 institutional 43, 182, 185-190, 242,243,246,248 patterns of 179, 180, 185 social 232-235, 244, 262 technological 180, 242 evolutionary economics 1, 2, 4-6, 9-12,15,19,24,28,31,32,39, 42-44,45-49, 53, 54, 59,66, 68,69,74,75,90,93-101,104, 105, 108-110, 115-117, 121123,125,129,130,147-150, 152,153,166,167,169,174, SUBJECT INDEX 176,183,232,247,258,259, 261,262,264,274,300,306, 307,321-326,328-331,339, 343,347,348 evolutionary ontology see ontology Evolutionary Operations Procedure (EVOP) 286 evolutionary process 31, 40, 48, 49, 91, 120, 126, 127, 142, 149, 151,154,157,167,168,187189,210,219,243-246,259, 260,283 institutions as a result of 187189,309 see also institutions spontaneous order as a result of 236 see also order, spontaneous evolutionary approach / thought / theory 89-91, 99, 102, 105, 106,110,114,117-119,122, 125, 126, 129, 146, 148-153, 160,165,166,168,169,172, 176,183,188,196,298,204, 210,223,232,247,249,261, 265,287,309,317,318,322324,326,330,337,339,341, 343, 347-349 evolutionary theories of the firm see firm experimental economics see economics experiments 199 in economics 285, 288, 290-292 psychological 291 externalities 42,63, 72 see also network externalities failure, role of 260, 265, 272, 286288,291 fallibilism 8, 93, 100, 101 radical 91, 104 falsification(-ism) 95 feedback 33, 76, 113, 148, 153, 154,168,343 SUBJECT INDEX environmental 14,34,284,287, 290,293 financial market(s) see markets firm 6, 9,11-17,20-31,39,41,6466,68-70,76,78,79,107,121124,143,145,146,151-154, 157-161, 167-176, 179-187, 256-262,266,270,282,283, 286,287,293,302,305,309316,322-331 behavior 14,67, 78, 254, 255, 321,324-326,349 boundaries of the 27, 30, 31, 326,327,335,336,346,347 capabilities of the 260 contractual theories of the 320, 321,325,333,335,336,338340,346,348,350 endogenous birth of the 317 evolution of the 331, 332 evolutionary theories of the 6, 27-31,320-329,332,333,335342,346,350 existence of the 323, 327, 329, 330,348 growth 14,31,32,158,167, 171,173,174,190,323,327, 329,330,348 (internal) organization of the 14,24,27-31, 76, 112, 113, 122,123,323,326,327,331, 335,336,346,349 knowledge 301, 327, 328 see also knowledge like a biological organism 183 neoclassical 114,256-259,328 neoclassical theories of the 256, 320,321,325-329,333,336, 340, 346-348 see also economics, neoclassical 363 ontogenetic theories of the 327, 329, 330, 332 see also ontogenesis organization see firm, (internal) organization of the phylogenetic theories ofthe 327,328,332,336 see also phylogenesis population 28,54, 157-160, 255, 326, 327, 329, 339 see also population approach representative 54, 77, 107, 108, 324,328,349 strategy 332, 346 see also strategy structure 185,332,335,339, 349 theories of the 29,256,320, 321,333,347,349 Fisher Principle/relation 78, 154159,322,348 fitness 157,173,189,278,279, 339 criteria 31, 188 differential 32, 152, 171 genetic 55, 73 forces 166, 174, 185, 189, 190 driving 41,42, 153, 189,308 evolutionary 242 inertial 169 market selection 21, 112, 126, 166, 167,349 frequency 21-24,34,35, 150,343 relative 13,21,31,34,36,54, 55, 57, 60, 64, 77 see also population approach frequency-dependency 46,54-59, 63, 74, 77 see also path dependency game theory 46,56, 119, 186, 187, 264,316,317 364 evolutionary 4,54-56, 77, 186, 264 gene(s) 14, 16,20,32,33, 105, 112, 113, 119, 120, 170-172, 183,262,292 see also blueprint see also routines general equilibrium 167,280-282 theory 17,18,38,69,70, 79 see also economics, neoclassical genotype 47, 167,328 see also phenotype German Historical school of economics group selection see selection growth 97, 128 differential (firm) 64, 66, 67, 69, 148, 154, 156 economic 3,6,40,45,54,67, 68,72-74,126-130,141-151, 157, 160, 162, 166, 167, 169, 170,173-176,207,326,349 endogenous 144, 148 firm see firm long-term 94, 318 of ideas see ideas of knowledge see knowledge population 246 growth theory 3, 32, 40, 94-97, 145,152,154,167,169,170, 172-176,181,284 new 95-97,123,172 habit(s) 10,26,56,170,172,208, 210,216,219,221,256,282 see also institutions hereditary component/mechanism 149,322,324,329 heterogeneity 21,46,66,308,321, 325,331,334,340,341,347 see also variety see also diversity hierarchy 24-28, 42, 113, 114, 149, 317,328,339,345 SUBJECT INDEX of processes 24, 330 of time scales 43 history 13,92, 110, Ill, 123, 125, 126,128,130,153,177,237, 304,305,309,312,316,338, 341,342,348 history bound 63, 120,329 historical nature of economic phenomena 40,44,48,57,63, 129,342 history of economic thought 2, 4, 4~9~ 118, 165,247,324,325, 349 human capital 95, 278, 293 idea(s) 8-11, 16-19,24,29,51, 71, 74,76,91,98,106,107,144146, 152, 153,261,266,272, 273 generation of 53 generic 8-21, 26 growth of 144 stock of 143-145 imagination 6, 8, 9, 13, 14,29, 32, 53,54,76,262,268 imitation 35, 49, 56, 78, 171, 174, 184,235,236,248,327 incomplete contracts see contracts individualism 51, 54, 77, 236 methodological 46, 53,237, 248, 249 see also methodology industry 64,65,67, 79, 124, 145, 146,153,161,167,168, 171, 172,174,176,179-185,217, 219,255,256,304,318,322, 324-330,336,341,348,349 structure 40, 41, 167, 176, 179183 inertia in evolution 47,66,67, 78, 166,169,281,282,330 inflation 125,267 information 7, 11, 12,26,30,3336,50,77,91,92, 112-121, SUBJECT INDEX 127, 128, 142, 144, 153, 168, 218,237,263,266,268,270, 273,278,280,291,301,302, 306,307,309-311,316,327, 339 asymmetric 27, 343 carriers/storages of 11,91, 115, 121 costs 312,327,343 incomplete 253 perfect 76, 241, 254, 303 inheritance 10,26,32, 110,292, 348 innovation 4,5,8,9,32-34,38-41, 46,49-54,57,59-79,105,141, 142,146-152,159-161,171, 173,184,243,262,268,271, 272,301,308,325,338,347 adoption of see adoption diffusion 34,59,57, 77 institutional 49, 242 process 141, 143, 161, 166, 180 product 61, 142, 180 system 161, 162 technological 41, 142, 173,207, 209-220, 307 innovator 70,72,76,78,236,271, 273 instinct 118, 241 institutional change see change institutional economics 4, 42, 186, 196-198,211,217,220,221, 223 see also institutionalism "new" 27, 47,186,197,220 see also transaction costs "old" / American / neo- 4, 47, 186, 187, 195-198,201,204, 205,207-213,217,221-223 see also American Institutionalist school of economics evolutionary 47, 187 365 institutionalism 47 see also institutional economics institutions 4, 15, 18, 33, 39-42, 56, 72,74,75,91, 114, 120, 128, 129,151,160,161,208,209, 219,221,231,234,239,242249,307,309,314,315,342344,347,348 see also beliefs see also norms birth of313, 315, 342 definition of 204 economic 30, 75, 142, 143, 146,151,153,160,203 evolution of43, 75,188-190, 204,242,246,248 instrumentalism 90, 93-100, 117, 123, 198 pragmatic 196-203,206,223, 224 see also pragmatism interdisciplinary nature of evolutionary economics 109, 129 inventions 49,76, 105, 109,210, 242,243,261 see also innovations investment behavior 14, 18, 159, 171 invisible hand 221, 324 irreversibility (-ies) 21,36, 110, 125,301-304,307,309,312, 313 isomorphism 322, 340, 341 Keynesianism 18,95, 124,207, 212,320,347,350 knowledge 8-17, 20, 26-30, 33, 34, 37,39,43,51,53,72,74-79, 91,99-121,124,127, 128, 142145,148,153,154,160-162, 182,198,199,204,205,214, 218-222,232,235,237,239243,266,272,280,284,285, 366 293,301,325,326,329,331, 335-339,344, 346 accumulation 14, 112, 145, 147, 153,336-339,346,348 common 258, 331 contextual 199 creation/generation 17, 102, 105,143,215,335 division of 6, 16, 17,23,24,43, 265 economic 3, 9, 13, 37 embedded 232 explicit 113,240,247,279 firm see firm growth of 142-145,160,161 imperfect 264 implicit! tacit / practical 107, 119, 121,233,237,240,242, 243,247,263,283,284,292, 293,332 non-referential 113, 116, 120, 128 organizational 328, 329, 331, 346 practical see knowledge, implicit repositories of / stores of / carriers of9, 11,33,37, 112, 335,336,348 tacit see knowledge, implicit technological 143, 162 theory of232, 233, 244-247 labor 37, 74, 75, 95, 115, 124, 169, 173,185,284,314 division of2, 6,16,17,23,24, 43,71,75,143,160, 161,206, 261,264-266,271 market see markets Lagrangian method 103, 116 Lamarckianism 33, 167 laws SUBJECT INDEX legal 142, 182, 187, 189,220, 235 scientific 10, 13, 40, 44, 95, 106,108,113,115,120-122, 156,221 transition see transition laws learning 6,9,21,29-31,42,56,73, 76,99, 101, 102, 104, 105, 114, 147,166,168,169,171, 175180, 184, 188,200,201,208, 221,240,262,263,273,277293,323,327,331-333,338, 346,350 algorithm 286, 291 by doing 284 competencies 339 cultural 235, 236 individual 64, 168, 169,331 model of248, 249, 284-287, 291 organizational 29, 169, 183, 184,331,332,344,346 phased 288 process 10 1, 102, 104, 172, 216,260,285,286,288,331, 332,345,346 social 186 theory of 247, 248 trial and error see trial and error legal structure see structure life 183,220,222 cycle 60, 62, 78 forms of279 process 201, 205, 208, 209, 220,221 lock in 4,36,63, 180, 181,218, 303 macroeconomic analysis 6, 12, 1719,24,37-41,90,92,93, 123, 124,145,146,170,173,174, 320,340 SUBJECT INDEX macroeconomic phenomena 280, 282,283,285 market(s) 2,3,9,27, 18,25,27-29, 34, 42-44, 46, 63-66, 69-73, 75, 78,79,99,114,122,142,146, 147, 151-153, 158-162, 168172,179-183,188,189,213, 218,232,233,245-249,256261,284,292,300,305,317, 320,324,331,332,335,336, 338,341,345 capital 123, 147,257 competition 281 economy 280-283, 294 fmancial212, 267, 305 functioning of238, 245, 246, 249,258,305,317 labor 284, 309-315 selection see selection, structure 69, 75, 257 Markov process 172 maximization 26, 103, 104, 116, 118, 119,208,278,279,301, 308, 324, 328, 333 see also optimization profit 253-257, 287, 305,325 measurement, economic 56, 91-97, 111, 114-116, 121, 124, 127, 143,146,148,169,171,246, 267 mechanics 3, 4, 10,40,48, 75, 76, 165,169,170,176,310 see also physics methodology 10,43,44,92-98, 103,117,118,121,122,124, 128,130,196-198,202,203, 205,223,237,248,249,255 see also bimodal methodology see also instrumentalism see also individualism see also pragmatism 367 microeconomic(s) 67, 92, 123, 124, 255,283,299-308,316-318, 328,336,340,342 analysis 6,17,18,24,29,280, 285 evolutionary 316-318 mimetism 305 mind 7-9,13,51,91,98-105, 109112,118,119,125,129,200, 221,233,234,239-243,279 see also brain mind/world dichotomy 90, 199 money 92, 123, 124, 126, 187 monopoly 69, 78, 302, 304 motivation 51-53, 65, 186,208, 240,255,259,287 mutation 21, 49, 67, 105, 183, 185, 261 narrative account 92, 126 Nash equilibrium see equilibrium Nelson-Winter model 4, 14,54,68, 69,78,112,152,170-177,184, 262,283,318,323-332,336, 348, 349 see also routines neoclassical economics see economics neoclassical growth theory 94-96, 167,169,170,172-174 see also growth theory neoclassical theory of firm see firm network 121, 161, 183 externalities 63, 178 neuronal net 292 new growth theory see growth theory normative issues 30, 42, 196, 198, 199,201,202,220,222,223 norms 39, 42, 120, 186, 187, 189, 200,201,235, 307 see also beliefs see also institutions novelty 14,21,29,32,39,40,46, 48-54,66,69-72,74,76,123, 368 125,126,149-154,160-162, 210,242,243,261,268,273, 322, 323, 327,337, 343, 344, 348 see also innovation occupancy effect 46,63,64,66 oligopoly 66, 302 omniscience 232, 260 ontogenesis/-genetic 20, 28-30, 326,327,329-333 see also phylogenesis/-genetic ontological pluralism see pluralism ontology 5-11, 19,89-93,96-130, 223,224 bimodal 25, 29, 90-92, 98-111, 1l3, 119, 121, 123, 125, 129 evolutionary 7, 8, 10, 11, 19 openness 103, Ill, 121 see also uncertainty see also change as a fundamental feature of evolutionary ontology 106, 126 opportunism 340, 341, 343-345, 349 optimality 36, 45,53, 104, 188, 280-283,290,291 assured by evolution 188 Pareto 57, 190,280,293,305 optimization 52, 54, 67, 69, 74, 76, 78,96,101,114,118,155,171, 189,255-258,274,284,287, 290, 292 see also maximization global 118 impossibility of 52, 103, 189 local 118 order 2,3,21,38-43, 70, 71, 111, 1l3, 115-118, 120, 122, 127, 128,147-149,154,231-241, 244-249 patterns of 148, 149 spontaneous 17,27,42, 71, 150,231-238,241,243,245, 246,249,331 SUBJECT INDEX organism 28, 30, 33, 112, 172, 183, 184,248,277-279,329 organization 9, 14,22,23,26,27, 29,42,53,54,78,91, 112, 114, 122, 123, 143, 153, 161, 162, 169,172,182,183,185,-187, 189,232-237,260-271,277, 304,306,307,311,314,316318,321,328,331,332,335, 337-339, 343, 345 as process 234, 266, 268, 307 economic 14, 147, 150, 153, 161,162,203,338,340,341, 343,342 evolution of 262 firm see firm industrial 161, 183, 189 internal see firm organizational ecology models 183 organizational knowledge see knowledge organizational learning see learning organizational structure see structure paradigm 1-5, 7, 10,23, 109, 112, 118, 125, 128, 185,320,333, 348 evolutionary 4,89, 104, 112, 318,333 microeconomic 300, 303, 306, 316,318,320,333 pluralism of 109 see also pluralism technological 184 Pareto optimality see optimality path dependency/e/-ies 4, 13,21, 33-36,125,148,176,187,219, 221,329,331,347 patterns 17,34,48,55,248,272 behavioral 41, 186,204-211, 215-221,236,256,272 see also behavior SUBJECT INDEX of activity 263 of change see change of evolution see evolution of order see s order of perception see perception perception 53, 71,76,219,239, 240,261,263,264,270,272 patterns of 51, 76,124,125, 263 phenotype 47, 169, 171, 172,328 see also genotype philosophy 2,3, 7, 8, 46, 95, 98, 106,107,123,196-199,203, 208,223,232,322,348,349 phylogenesis/-genetic 28, 30, 119, 326-333, 336 see also otogenesis/-genetic physical time see time physics 3, 17,44, 130,303,335 see also mechanics planning 284, 304-306 central 247 perfect 305 standards see standards pluralism 4, epistemological 197 methodological 197 ontological 117, 120, 121 paradigmatic 109 policy/political process 41, 42, 68, 153,173,181,188,189,196, 220-223,257,318 political factors 68, 179 population 10, 11, 17,20,21,28, 31-35, 46, 49, 53-56, 58-60, 63, 64,66, 71, 73, 77, 78, 110, 168, 264 offrrms 28,158-160,255,324329, 339 see also frrm thinking/approach 6,17, 19,33, 46,53,54,60,74, 148-150, 369 152,154-159,322,323,326, 328,349 Post-Keynesianism 47,93, 196, 207 potential 12-14, 26, 66, 73, 175, 314 pragmatism, American 6, 8, 29 see also instrumentalism, pragmatic prediction(s) 249 in economics 153, 167, 168, 174, 254-257 power of 50, 166 price formation 66, 69, 70, 142, 151,172,258,281,305,307, 309 problem-selectors 13, 266 problem-solving 205,209-211, 216,218,219-223,332,344, 345 process regime 21, 26, 38, 40 production function 19,95,96, 107,108,143,144,258,284, 286,301,302,305,336 production process 180,243 productivity 67,68, 73, 74, 95, 127, 143, 144, 146, 159, 169, 173-175,184,212,216 profitability 32, 61, 65, 69, 142, 153, 170-174, 178, 180, 184, 314 progress 42, 71, 238 economic 42,72,92, 126, 127, 188,189,217,219,223 techn(olog)icaI2, 3, 41, 73, 75, 76,143,144,159,172,302, 306, 318 see also tech(nolog)ical advance, property rights 182,336,337,339, 348 psychology 100, 109, 118, 130, 212,216,265,285,301 public sector 182 370 punctuated equilibrium see equilibrium see also evolution, biological rational anticipations see anticipations rational choice see choice rational expectations 98, 99, 10 1, 102, 104, 105, 108, 109, 123, 151,261,292,293 rationalism, constructivist 239,241 rationality 118, 171,208,253,257260,262,264,280,282,283, 292,330,333,344,348 bounded 172,280,290,291, 333,337 individual 256, 257, 264 neoclassical 241 perfect 19 principle 323 procedural/limited 307,308, 312,316,320,333 realism 90, 97, 102, 107, 117, 124, 223, 224, 257 see also ontology reality 4, 7, 8, 17, 19, 90-108, 113, 114, 124-126, 129, 130, 150, 199, 311 see also realism re-co-ordination 37-40 see also coordination see also de-coordination regime 2,3, 17,21,24,26,33,38, 40,41 evolutionary 17,21,24,33, 183 technological 184 regulation 181, 182, 293, 317 mode of305 replication 49,54,66, 71, 105,260, 268 replicator dynamics 32, 64, 65, 154, 155, 158 equation 31, 154 SUBJECT INDEX repositories of knowledge see knowledge representative agent/individual 19,54, 77, 107, 123, 146 firm 107, 108,324,328,349 see also neoclassical theory of firm research 182,214,261,302 research and development (R&D) 29,32,76,144,145,171,179, 180, 189,212,215,216,261 resources 3, 9, 12, 15-19,24,39, 40,67,99,115,128,144,148, 152,178,184,205,279,284, 304,305,308,314,322,330, 332,345,348,349 returns 31, 63, 144, 148, 173,327 (dynamic) increasing 63, 159, 176-181 routine(s) 14, 15,20,26,30,38, 39,41,54,78,170,172,183, 328, 329, 333, 338 see also Ne1son-Winter model behavior 16,24,26, 170, 171, 262,325,329 firm 54, 78, 171, 172, 184, 323325,328,329,336,348 search 14, 262 rules 15,30,41-43,56,59,71,171, 172,249,292,307,308 behavioral/of conduct 42, 181, 231-242,244,246,249,262 cultural 26, 235 decision 283, 292, 308, 323, 328 economic 15,30, 142 innate 235, 236 learned 79, 235, 236 of the game ! 86 see also institutions poiesic 16 SUBJECT INDEX strategic 13 system of 231 SIR (stimulus-response) models of learning 263,285,291 satisfaction 30 of needs and wants 278, 279 satisficing 52, 53, 65, 68, 76, 287 scarcity/-ies 130,217,256,314 changing 279 search 14,29,49-53,65,66,68, 70,73,76,268,284,287,288, 301,311,312 behavior see behavior for novelty/innovation 171-175 process 331 routines see routines sequential 268, 269, 284 trial and error see trial and error selection 10,21,26,29,31,47,49, 54,63,66-68,71,72,74,77, 78,91,92, 105, 110-123, 126, 127, 129, 142, 143, 149-162, 166,168,171,173,188,200, 201,253-261,264-271,283, 285,322,323,330,331,343, 348, 349 see also evolution see also survivaV-ors criteria 64,66, 168,265,329, 339 environmental 169 environment(s) 114, 120, 122, 124,125,149-151,155,173, 181,189,258,261,262,264, 269,271-274,324 forces 21, 112, 126, 166,349 group 54, 71, 167236-238,248 guided 29 internal 122,269,270 market 69,78, 112, 142, 173, 261 mechanisms 29, 31, 33, 124, 173,188,322,323 371 model 21, 65, 69, 155 pressure 33, 46, 66-69, 114, 122,150,255 process 6, 28, 31, 46, 64-71, 99, 142,149-155,158,166,236238,248,253-258,261-269, 274,302,307,346 unit 324 self-organization 44, 47, 149, 150, 153,187,189,300,306-311, 316-318 social science(s) 46,90, 190,232, 232,234,248,257,267,272, 303,317,318,322,342 socialization 120 society 52, 71, 72, 120-122, 125, 127-129,182,183,187-189, 203,204,207-213,219,231, 232,235,236,238,241,246 sociobiology 46, 170, 172 sociology 130, 151, 181, 183, 186, 208,265,317,318 sorting in evolution 309, 323 space 8, 10, 11, 107, 108, 121-123, 261,303 specialization 2, 71, 75, 161, 176, 180,329 species 10,20,30,43,54,67, 73, 109, 111, 121, 122, 166, 185, 257,272,279,292 spillover(s) 107, 175 spontaneous order see order stabilization 21,26, 128, 185, 186 standards 13, 14, 16,56,57,63, 142, 151, 181 see also norm historical 13, 266 cognitive 14, 16,26 external 13, 267 imaginative 13, 14,268 of judgment 41,200-205,211, 215,222 planning 13, 267 372 reference 13,266-268 techn( olog)ical 56, 181 statics, comparative 293, 339, 348 status 23, 118-120 perceived 119, 120 relative 119,206 social 205, 206, 211 strategy 31, 55, 56, 59, 63, 64, 74, 77, 151, 161, 168,269,270, 272,282,283,290,291,327, 330, 332, 336, 338, 346 see also firm structure 7, 12, 18, 19,21,23,24, 37,38,51,55,91,92,96-100, 105-107,113-116,120,124, 126, 128, 143, 145, 148, 155, 158,187,248,257,292,293, 313, 339, 344 communication see communication deep (economic) structure 6, 1~ 16, 18, 1~22,34 dissipative 48, 49, 91, 155-117 emerging 332 firm see firm industry see industry information 11,30 institutional 143, 188, 189,204208,210,211,218,219,221 see also institutions legal 182, 249 market see market of behavioral propensities 18 of resources 18, 24 organizational 114, 260, 290, 327,328,331 surface 10, 16, 18, 19,37 value 204, 211, 215, 219 survival 30, 43, 64, 66, 70, 73, 115, 122,127,149,166-169,176, 204,209-211,248,249,254256,261,278,279,322,339 SUBJECT INDEX rates 66, 67, 323 survivors 110, 112, 166, 167, 176, 255, 256 see also selection synchronic dimension 92, 113, 120, 125-128, 304 see also diachronic dimension synergetics 47, 116 system 13, 15, 22-24, 30, 31, 36, 38-43,142, 143, 149, 160-162, 195,212-214,218,234,239, 259-261,264,265,273,274, 278,283,292,293,306-308, 322 adaptive 141 dynamic 31, 50 economic 4,13,17-19,23-28, 34,36,38,39,48,49,69,72, 75,79,101,103,107, 109, Ill, 114-122,126,127,153,253, 257,259,261,274,305-307, 318,323,330,339 innovation see innovation institutional 208, 209, 223 lega1249 stochastic 172 tacit knowledge see knowledge taxonomy 92, 120-123, 128 see also biology of theories 334, 335 techn( olog)ical advance 42,170,182,189,195, 216 change see change evolution see evolution innovation see innovation paradigm see paradigm progress see progress see also technological advance regime see regime structure see structure trajectories 20, 160 SUBJECT INDEX technology 14-18, 36, 41-43, 64, 65,76,78,79,128,129,145, 161,162,172,173,175,176, 179-185,189,204-217,242, 261,301,313,314,318,328, 330,337,338,341,343,349, 350 creation 75 cumulative 177, 178 cycles 177 diffusion 60,109,217,219 dominant 39 new 34, 35, 49, 74,123,173, 181,183,184,189,210,314 see also novelty see also innovation theoretical monism 91, 102 see also methodology see also pluralism, theoretical theoretical universalism 91, 102 see also pluralism, theoretical thermodynamics 308 second law of 115 see also physics see also irreversibility see also entropy time 8, 10, 11,21,43,48,49,66, 78,91,92, 103, 107-111, 121123, 125, 127, 129, 147,259, 278,300 historical 110 physical 91, 110, Ill, 120 scales 43, 129,292 tradition 79, Ill, 128,210,213, 235,240-242,248,282 training 182, 185,269 transaction costs 114, 196,332, 333,335-339,342,343,348, 349 see also economics see also institutional economics, "new" minimization of 329, 332, 337339,349,350 373 transition 9, 21, 39-41, 56, 57, 63, 218 laws 50, 51 trial and error learning/search 29, 31,76,209,221,236,260,262, 273,277,285,287,290,291, 345 see also learning see also search uncertainty 14, 36, 170, 254, 280, 282,301,313,343 see also openness creation of 14, 268 radical 8, 14,40,220 reduction of 268 unknowledge 50-52 utility 56, 60, 61, 71, 72, 94, 102, 115,119,205,206,301,308 function 118,302,305 maximization 26 valuation 42, 199-206,220 ceremonial 203, 205, 207, 211 instrumental 41, 200, 202-205, 209,211,219,220 value(s) 3, 6,15,36,41,42,113, 115, 118-l20, 124, 128-130, 199-207,211,212,215,216, 219,220,240,241,254,272, 312 social 75, 186,220-223,232, 248 variation 10,29,31,47,79,91,92, 110-112,115,117,119,120, 122, 123, 125, 127, 129, 142, 143, 149, 150, 152, 153, 166, 169, 174, 175, 188,261,283, 291,322,323,328, 331 see also variety guided 29, 161 variety 6,19,21,31,33,39,40,46, 53,54,65,66,77,150,152, 159,169,258,260,264,268, SUBJECT INDEX 374 273,324,327,329,331,333, 339 see also variation, behavioral 54, 66, 75, 142 generation/creation 28, 31, 6770,149,151,166,183,256, 261,264,329,346 reduction of28, 31, 39, 42, 54, 64-70,152,256,261,274 re-generation of33, 152, 159 visionl-s 13,268,308,323 ... go to my address 2 EVOLUTIONARY ECONOMICS: PROGRAM AND SCOPE evolutionary approach and the establishment of new scientific societies and journals which carry the label "evolutionary" The present... The teaching curricula and research programs of contemporary economics can be divided into the domains of macro and microeconomics on the one hand, and of static and dynamic economics on the other... GLOBALIZATION AND DEVELOPMENT Medema, Steven G.: COASEAN ECONOMICS: LAW AND ECONOMICS AND THE NEW INSTITUTIONAL ECONOMICS Peoples, James: REGULATORY REFORM AND LABOR MARKETS Dennis, Ken: RATIONALITY IN ECONOMICS: