Understanding Evolutionary Economics

Evolutionary Economics— the study of the economy as an evolving complex adaptive system grounded in a human nature that evolved functional adaptations to survival as a social primate species in the Paleolithic epoch in which we evolved. This is a swanky way of saying that the economy is a very complex system that changed and adapted to circumstances as it evolved out of a much simpler system, that we spent the first ninety thousand years of our life as hunter-gatherers living in small bands, and that this environment created a psychology not always well equipped to understand or live in the modern world.

In the neurosciences, the study of consciousness has come to be known as “the hard problem”* because it has been so difficult to explain how the activity of billions of individual neurons generates the collective phenomenon of conscious thought, or what one scientist calls the “society of mind.” An even harder problem – what we call the really hard problem—is for science to explain how the activity of billions of individual humans generates the collective phenomenon of culture, or the “society of culture,” and what its proper economic and political structure should be to achieve social harmony.

As humans made the transition from hunter-gatherers to consumer-traders, groups have tried hundreds of different social experiments in an attempt to solve the really hard problem. Bands, tribes, chiefdoms, states, and empires have been formed. Theocracies, plutocracies, monarchies, and democracies have been tried. Tribalism, statism, socialism, and now globalism have been practiced. From no trade to fair trade to free trade, endless permutations of economic arrangements have been employed, with greater and lesser success. And for millennia, philosophers and scholars from all walks of life and from around the world have attempted to solve the really hard problem with little consensus.

Evolution and economics are not just analogous to one another; they are actually two different examples of a larger phenomenon called complex adaptive systems, in which individual elements, parts, organisms, or people interact, process information, and adapt their behavior to changing conditions. These are systems that learn and grow as they evolve from simple to complex, and they are autocatalytic, which means that they contain self-driving feedback loops (as when a PA system develops a feedback loop between speakers and microphone, resulting in an accelerating rise in pitch and volume).

Here are some examples of complex adaptive systems and what emerges from them, as the built-in autocatal-ysis leads to their being self-organized:

Life is a self-organized emergent property of prebiotic chemicals that came together in a manner that allowed them to be self-sustaining and capable of duplication and reproduction.

Complex Life is a self-organized emergent property of simple life, as when simple prokaryote cells coalesced into the more complex eukaryote cells of which we are made, which contain within them organelles that were once prokaryote cells (such as mitochondria, which have their own DNA).

Multicellular Life is a self-organized emergent property of single-celled life forms, which merged together as a cooperative strategy for more successful survival and reproduction.

Immunity is a self-organized emergent property of billions of cells of our immune system working together to combat bacteria and viruses.

Consciousness is a self-organized emergent property of billions of neurons firing in complex patterns in the brain.

Language is a self-organized emergent property of thousands of woras spoken in communication among language users.

Law is a self-organized emergent property of thousands of informal mores and restrictions that were codified over time into formal rules and regulations as societies grew in size and complexity.

Economy is a self-organized emergent property of millions of people pursuing their own self-interests with little awareness of the larger complex system in which they work.

Complex adaptive systems appear designed from the top down, but in fact as they evolve they construct objects from the bottom up through functional adaptations-what works survives and reproduces into the future designscape of life or culture. From the simplest forms of life up the chain of complexity, we move from simple cells to complex cells to multicellular organisms, to colonies, to social units, to societies, to conscious-ness, to language, to the law, and to economies.

In living organisms, the complex adaptive system of evolution is driven by natural selection, or variation plus cumulative selection. The proverbial monkey randomly pecking away at the computer keyboard will not produce Hamlet in a billion years, or even “To be or not to be” any time soon.

The evolution of our material economy proceeds in an analogous manner through the production and selection of numerous permutations of countless products. Those ten billion products in the Manhattan village represent only those variations that made it to market, so there is already a selection process by the manufacturers themselves as they attempt to correctly predict what the market will prefer. Once these choices are brought to market, there is a cumulative selection for those deemed most useful or desired, with the selection conducted by consumers in the marketplace who vote with their dollars on which will survive: VHS over Betamax, DVDs over VHS, CDs over records, flip phones over brick phones, computers over typewriters, Google over Altavista, SUVs over station wagons, paper books over e-books (still), and Internet news over network news (soon)? Those that are purchased “survive” and “reproduce” into the future through repetitive use and remanufacturing.

Source – The Mind of the Market: Compassionate Apes, Competitive Humans, and Other Tales from Evolutionary Economics by Michael Shermer

Goodreads – https://www.goodreads.com/book/show/1960096.The_Mind_of_the_Market

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