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Edited by Jeroen C.J.M. van den Bergh
Chapter 65: Evolution, Environment and Economics
JohnM. Gowdy 1. Introduction: evolutionary biology and economics The connections between evolutionary theory and economics go back well over one hundred years. The co-formulators of the theory of evolution by natural selection, Charles Darwin and Alfred Russel Wallace, developed their ideas after reading the economic texts of Thomas Malthus describing competitive markets. Alfred Marshall, the great synthesizer of modern neoclassical economics in the early 19OOs, had a keen interest in evolutionary theory. He used Darwin’s dictum natura non facit saltum, nature does not make leaps, for the frontispiece of his economic textbook. We find in Darwin and Marshall the two ideas which dominated both evolutionary and economic theory for over a century - improvement through competition and gradual change. More important than Darwin to contemporary economics were the ideas of Herbert Spencer who greatly influenced Marshall and Veblen. It was Spencer, not Darwin, who used the term ‘evolution’ (Darwin preferred the more neutral and accurate phrase ‘descent with modification’) and who coined the phrase ‘survival of the fittest’ (Hodgson, 1993). The Spencerian idea of social progress through competition still dominates contemporary thought. To this day neoclassical models of economic change begin with the assumption that the sole driving evolutionary force is competitive selection (see, for example, the explicit statements of this by Geroski, 1989; Telser, 1996). Until recently, most of the applications of biological metaphors’ in economics were confined to crude notions of survival of the fittest which were used to validate the main results of neoclassical economic theory, namely,...
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