Evolutionary economics

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Evolutionary Economics (also: Evolutionary Economics or Evolutionary Economics ) is a research area in economics that emerged in the 1980s and deals with the role of knowledge , its change and its limitations for the economy. It builds on older theories of the adaptation of companies to their environment (Armen A. Alchian), on theories of the entrepreneur (Schumpeter) and on resource-theoretical approaches (Edith Penrose) and questions the microeconomic equilibrium theory.

position

There is no unified view of the position of evolutionary economics within economics, rather two fundamentally different approaches must be distinguished:

While neoclassical theory is based on the formation of economic equilibria in markets , evolutionary economics reconstructs economic processes analogous to biological evolution : There is no market and therefore no company in a state of equilibrium. Permanent competition between products , services , company forms and even economic systems ensures that only those competitors can continue to exist who meet the respective environmental requirements and adapt to the constantly changing competitive conditions. Needs are understood as a form of knowledge .

Basic concepts

Central basic terms of evolutionary economics are:

  • Knowledge: Rules that depict patterns of action and relationships represent knowledge that coordinates the relationship between a system and its environment . This knowledge can be obtained directly or indirectly and can be true or false. Often these are traditional patterns of action that are more or less reflected on. In contrast to classical economics , evolutionary economics defines the basic problem of the economy as a lack of knowledge. Since human perception is subjective , the common knowledge decreases compared to the total amount of information contained in a system due to each new information for an actor .
  • Actor: Instead of the individual in the sense of Homo oeconomicus in classical economics, the actor (or actor) takes the place of the doer. He does not have the ability to act immediately and absolutely rationally, nor does he have absolute knowledge. These three criteria of Homo oeconomicus are not met. From this, as well as from the difficulty of evaluating complex situations, it follows that in situations of uncertainty, apparently simple rules such as the principle of profit maximization become meaningless. The actors are therefore not looking for an optimal solution, they mostly act routinely on the basis of previous experience.
  • Population: A certain number of actors forms a population . A distinction must be made between fundamental actors (people) and derivative actors (organizations and companies). Each agent is bimodal himself and unites singularly true and false knowledge and ability. Those actors who have a less successful strategy will drop out of the population over time. Decision-making behavior is becoming more and more rational, however, because the proportion of actors with a successful strategy is growing.
  • Element: In terms of evolutionary economics, the element is a carrier of knowledge, which in turn can be part of a larger unit. The stored knowledge does not have to be personal, but can also be stored on data carriers.
  • Network : Ordered systems of elements and the actors working in them form networks through the relationships that each actor maintains with other participants. Relationships resulting in a transaction represent the configuration of the network.

Tradition of thought

Evolutionary economics was influenced by:

of institutional economics

of classical economics

and contributions by GLS Shackle (George Lennox Sharman Shackle, 1903-1992; The Nature and Role of Profit) and Nicholas Georgescu-Roegen . With the publication of the work An Evolutionary Theory of Economic Change by Richard R. Nelson and Sidney G. Winter in 1982, the concept of evolutionary economics became established in science.

Central premises

The central premises are

  • Historical dependency of development paths, resources, etc .; As a result, there is a heterogeneity of resources among the actors per se;
  • Inadequate information for the actors; thereby taking into account real uncertainty and the information paradox of Kenneth Arrow .

The evolutionary economic approach negates the model of the homo oeconomicus used in neoclassics as the rational decision-maker who always has all the information and on this basis strives for the best solution for him. Every decision can lead to a whole range of results, there is always a wealth of goal-oriented ways, but which result can only be determined ex post. There are no absolute best ways. The success indicator is that profits are realized at all, not that the maximum profit has been achieved. So it does not depend on the intention to make a profit, but on the result. Given the complexity of the market, the survival of companies will depend more on chance or trial and error than on the conscious choice of an adaptation or survival strategy. Companies are often not even aware of the conditions of survival - to that extent they resemble living beings that are subject to evolution - but they can be recognized and explained ex post by economists, even if only using statistical means, who take on the role of biologists.

Evolutionary networks cannot be shown in their entirety, as the person performing the work would have to have access to all relevant data. In terms of the philosophy of science, this problem is comparable to Quine's theorem . The uniqueness of each actor implies that a network is a non-integral structure .

literature

Web links

Individual evidence

  1. ↑ a b Carsten Herrmann-Pillath: Outline of evolutionary economics. UTB, Munich 2002, p. 21.
  2. ^ AA Alchian, p. 214
  3. ^ AA Alchian, p. 221