Evolutionary economics is a school of economic thought inspired by evolutionary biology, based on the idea that economic phenomena and the behaviour of economic agents are best understood from the perspective of evolutionary science:

Evolutionary economics is broadly concerned with questions of dynamics and change, with a particular focus on processes of entrepreneurship and innovation, industrial and institutional dynamics, and on patterns of economic growth and development.

The idea is far from new. In the preface of his famous “Principles of Economics,” Alfred Marshall wrote (1890):

The Mecca of the economist lies in economic biology rather than in economic dynamics. But biological conceptions are more complex than those of mechanics; a volume on Foundations must therefore give a relatively large place to mechanical analogies; and frequent use is made of the term “equilibrium,” which suggests something of statical analogy.

The term “evolutionary economics” itself might have been first coined by Thorstein Veblen.

However, coming to terms with the inspiring idea of a Darwinian economics was a long and winding road.

“Marshall’s problem” consists in finding a way to integrate physics and biology into economics in order to represent a complex economic world. It is widely believed that Alfred Marshall was the first to address the issue, but he failed to integrate the two methodological approaches into economics. In particular the prevailing view is that Marshall was unable to follow through on his declaration that biology is the “Mecca” of economics.

The prospect that evolutionary theory can provide an integrative framework for all the human-related disciplines was eclipsed by the high mountain of the modern synthesis, and it did not resurface until the 1970s.

However nothing lasts forever. Evolutionary economics became a recognized school of economic thought with the publication of Nelson and Winter’s (1982) book “An Evolutionary Theory of Economic Change.”

Since then, economies have been progressively viewed as a complex system, the result of causal nonlinear interactions between different agents with varied characteristics, conflicting interests, limited information and bounded rationality.

Now, in the first article¹ of an announced series, David Sloan Wilson and Dennis J. Snower “will get straight to work describing the multilevel paradigm in terms that can be applied to all branches of the social sciences”

This article is the first of a series that offers a new paradigm for economics, the “multilevel paradigm,” using generalized Darwinism as its theoretical framework. Generalized Darwinism refers to all processes that combine the ingredients of variation, selection, and replication – not just genetic evolution – making it relevant to the cultural evolution of economic systems that are embedded in political, social, and environmental systems. We contrast the multilevel paradigm with the neoclassical paradigm and other schools of economic thought

Previous evolutionary perspectives in economics include (quoted in the paper):

• Adam Smith who influenced Darwin’s thought.
• Thorstein Veblen’s 1898 article “Why is Economics Not an Evolutionary Science?”
• Joseph Schumpeter’s concept of creative destruction.
• Milton Friedman’s “as if” justification of the assumptions of Homo economicus.
• Friedrich Hayek’s concept of an extended order.
• Nelson and Winter’s (1982) “An Evolutionary Theory of Economic Change, evolutionary game theory models.”
• Elinor Ostrom’s (1990) “Governing The Commons: The Evolution of Institutions for Collective Action.”

Our goal is not to review the large literature on each of these perspectives, but to briefly show how they imported evolution into economics and how they relate to our current effort.

The effort is worth it for intellectual reasons, but THIS is perhaps the most interesting reflection and enlightening cause:

We submit that if a paradigm shift takes place, by changing the way we think, it will change the way that we act. There will be a quantum jump of good governance at all scales, including the global scale, and further improvements will take place over the longer term as institutional and procedural shortcomings are addressed with the welfare of the whole earth system—the ultimate unit of selection—in mind.

Let’s hope Wilson & Slower are right, and waiting for the next papers in their series!

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(1) Wilson, David Sloan, and Dennis J. Snower. ‘Rethinking the Theoretical Foundation of Economics I: The Multilevel Paradigm’. Economics 18, no. 1 (1 January 2024). https://doi.org/10.1515/econ-2022-0070.