David Sloan Wilson on economics and new developments in evolutionary theory
David Sloan Wilson has an interesting blogpost about modern evolutionary theory and economics in which he compares the ideas in a highly intelligent 1996 speech about this by Paul Krugman with subsequent developments in evolutionary theory. It reminds me a little of the early twentieth century ideas of Kropotkin (see this post on this blog): “Kropotkin … noticed that groupings of species thrived through cooperation. Researching human settlements in Siberia, Kropotkin likewise noted cooperation and mutual aid as the foundation for dealing with the larger struggle for survival against natural challenges.”
Let’s revisit Krugman’s four components of economics in the light of these developments in evolutionary theory.
1) It’s about what individuals do. “Methodological individualism is of the essence”. Not any more. The late social psychologist Donald Campbell, an early pioneer of the current developments, said this about methodological individualism in 19942: “Methodological individualism dominates our neighboring field of economics, much of sociology, and all of psychology’s excursions into organizational theory. This is the dogma that all human social group processes are to be explained by laws of individual behavior—that groups and social organizations have no ontological reality—that where used, references to organizations, etc. are but convenient summaries of individual behavior.” This dogma might be theoretically justified in cases where selection takes place entirely within groups (in which case group-level effects are coincidental byproducts), but not when groups are the unit of selection. Or, if you prefer, groups become the individuals when selection operates at the group level.
2) The individuals are self-interested. Not any more, at least not entirely. In my newest book, Does Altruism Exist?, I stress that altruism must defined separately in terms of action vs. thoughts and feelings and that a complex relationship exists between the two. When altruism is defined in terms of action and in terms of relative fitness within and among groups, humans are altruistic much of the time.
3) The individuals are intelligent and maximize their self-interested utilities. Krugman already identified a gap between economic and evolutionary theory for this component in 1996. On the economic side, behavioral economists have been closing the gap by calling attention to the many ways that people depart from the assumptions of Homo economicus, although most behavioral economists do not use evolution as a guide to understand the nature of Homo sapiens, as I stressed in my previous essay.
4) Economists are concerned with the interaction of such individuals, especially the invisible hand conjecture that the intelligent pursuit of self-interest benefits the common good. Ironically, and in contrast to mainstream evolutionary theory in 1996, the new developments provide theoretical justification for the concept of the invisible hand, although different than the received economic version. The two criteria of the invisible hand concept are: 1) A society functions well as a unit; and 2) members of the society do not have its welfare in mind. Multi-cellular organisms and social insect colonies offer spectacular examples of the invisible hand concept in nature. They function well as units and their members—cells in the case of multi-cellular organisms and single insects in the case of social insect colonies—don’t even have minds in the human sense of the word. Instead, they behave in ways that have been winnowed by higher-level selection to be good for their group. Put another way, higher-level selection is the invisible hand and if it doesn’t operate, there’s no theoretical warrant for expecting groups to function well as units. The economist John Gowdy and I develop this theme in an academic article3 titled “Human Ultrasociality and the Invisible Hand: Foundational Developments in Evolutionary Science alter a Foundational Concept in Economics”.
In short, all of the components of economic theory that made Krugman regard evolutionary theory as a “sister field” in 1996 require foundational changes.