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Is economics becoming an evolutionary science? Veblen at the 2018 ASSA conference

Summary:
In 1898 Thorstein Veblen asked ‘Why isn’t economics an evolutionary science?’. At the ASSA 2018 conference Avsar, Duroy and Scorsone mused about this. Below, the abstracts of their papers. Here, Mark Thomas about this. Avsar’s article is, with its link to neurology, truly Veblenian in spirit. An interesting question is: it seems that the behavior of hunter-gatherers, who have little property as they can’t carry it with them, have behavior that is more economic rational than the behavior of people with a lot of property. Does the institution of property itself destroy economic rationality? And if so, how does this relate to market behavior? Duroy’s article is about the question if selfish behavior, which sometimes is good for individuals, destroys groups on which these people depend for

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In 1898 Thorstein Veblen asked ‘Why isn’t economics an evolutionary science?’. At the ASSA 2018 conference Avsar, Duroy and Scorsone mused about this. Below, the abstracts of their papers. Here, Mark Thomas about this.

Avsar’s article is, with its link to neurology, truly Veblenian in spirit. An interesting question is: it seems that the behavior of hunter-gatherers, who have little property as they can’t carry it with them, have behavior that is more economic rational than the behavior of people with a lot of property. Does the institution of property itself destroy economic rationality? And if so, how does this relate to market behavior?

Duroy’s article is about the question if selfish behavior, which sometimes is good for individuals, destroys groups on which these people depend for survival. We might call this the Trump-effect.

Scorsone might give more attention to the work of Norbert Elias, who states that changing interdependencies does not only change institutions but also people themselves.

Rojhat B. Avsar:

This paper treats the “market” as an “adaptive” institutional innovation existing alongside many other institutions. Human societies have adopted various social organizations, from reciprocity to exchange, to deal with the survival challenges. Markets may be evaluated in this vein. That said, the market system is unique in that Sapiens interact with one another (virtual strangers in most cases) in a way that is seemingly incompatible with their tribal past. Sapiens are, in fact, capable of generating institutions that are conducive to establishing and maintaining such relationships that are key to their survival. What Adam Smith called “propensity to barter” wouldn’t have come about unless Sapiens had a set of neural networks specialized in social exchange (e.g. cheater detection) enabling them to engage in effective reciprocal relationships which characterized their foraging past. In this paper, we draw on Evolutionary Psychology to articulate the origin of Sapiens’ capacity for complex social relations that make the existence of markets possible in the first place. Evolutionary Psychology provides a compelling theory of such psychological adaptations which renders it useful for investigating compatibility of markets with human nature.

Quentin Duroy:

While competition and cooperation are two collective traits of our species, the neoliberal mantra of maximization of self-interested goals in a context of individual competition is decidedly un-natural. The impact of neoliberal doctrine on social structure and relationships among individuals as social agents is wreaking havoc on many countries, institutions and individual lives through the rise and strengthening of illiberal movements and regimes all over the world. In this article I propose to contextualize the un-naturalness of neoliberal principles through a review of the recent literature on evolutionism and culture group selection. In particular I will argue that neoliberal principles (and aspects of neoclassical theory) are parasitic upon genetically and culturally-evolved pre-dispositions towards morality and deservingness. Only in cases in which individuals are perceived as groups of one could competition be an effective allocative mechanism (a phenomenon I refer to as hyper-individualism). However, in the absence of cultural learning and accumulation it is likely that ‘groups’ of hyper-individualists will falter since they will undermine the collaborative aspect of human nature.

Eric Scorsone:

Institutional economics, both old and new, have focused on two forms of analysis – institutional performance and institutional change. Relative prices (North), transaction costs (Williamson), ceremonial and instrumental values (Ayers), and technological change (Bush) have all been identified as explanatory variables of institutional change. These explanations, however, fail to consider the most fundamental cause of institution change: changes in human interdependence. According to Schmid, interdependencies are present when the possibility exists that “one person’s actions…affect the welfare of another person.” These interdependencies are the result of the unavoidable physical characteristics of goods (goods being defined as situations, conditions, and things of value). In the face of these interdependencies, institutions “are sets of ordered relationships among people that define their rights, their exposure to the rights of others, their privileges and their responsibilities [and thereby] sort out the potential interdependencies and provide order and predictability to the [transactions of] the parties.” If institutions provide the framework of rules within which economic actors deal with these interdependencies, then changes in perceived interdependencies are likely to result in collective action that produces changes in institutions. This paper will examine changes in interdependencies as the fundamental origin of institutional change and will incorporate many of the prior theories of institutional change into a comprehensive theory of institutional change.

Merijn T. Knibbe
Economic historian, statistician, outdoor guide (coastal mudflats), father, teacher, blogger. Likes De Kift and El Greco. Favorite epoch 1890-1930.

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