This is my last post on David Sloan Wilson’s series Economics and Evolution as Different Paradigms (my earlier three posts are here, here and here). While much of Wilson’s attack on economics is against a caricature of the discipline, he ties up his series with a few recommendations that are worth noting.
One is the need for behavioural economics to adopt evolutionary thinking to allow it to move from being a list of anomalies and biases to a coherent framework. There is no argument from me there. Wilson has an underlying aim to this, however, which is that it may give a platform for the overthrow the classical economics assumptions of rationality.
I am not sure that would be the result. People generally want more (for themselves), they want less as the price rises, they discount costs and benefits in the future, and so on. There are all sorts of specific situations where behavioural economics has shown that this does not apply, but if I want to know the effect of putting a price cap on petrol prices, thinking about the rational actor is a sound starting point. Behavioural economics will only see the overthrow of the rational agent when it has a coherent framework and when incorporating the framework into models produces models with higher predictive power.
In Wilson’s final post, he notes a few avenues by which the mission to reconcile economics and evolutionary biology will progress. One of these was a letter submitted to the National Science Foundation. Written by Wilson and John Gowdy, the letter was also signed by 64 other signatories including Elinor Ostrom, Paul Ehrlich and Edward O Wilson. It had four main points on how to integrate economics and evolutionary science.
First, as discussed above, it states that evolutionary theory could help make sense of the findings of behavioural economics.
The second was that:
Evolution can help decision makers understand the large-scale and long-run consequences of economic policies, particularly environmental and social policies
As a headline, I couldn’t agree more. But when this point is discussed in the letter, it focuses on the use of evolutionary theory to understand where people behave in their own interest at the expense of the larger group. This reflects Wilson’s earlier attacks on the invisible hand.
This sells the potential contribution of evolutionary theory to economics short. Evolutionary theory can help the understanding of how people act, what objectives they pursue, which people have (or had) higher fitness, what the consequences of policies will be in the long-run (regardless of whether they are benign to a group), and so on. If evolutionary theory is used solely as (another) attack on libertarian arguments, there will not be widespread (or useful) adoption.
The third point in the letter was that the proximate-ultimate distinction is important in economics, as it is in evolutionary theory. This point is a hangover from Wilson’s attack on Milton Friedman and I am not sure that it is important. As I wrote in my previous post, Friedman’s position is milder and the economics profession is less narrow than Wilson suggests.
The final point of the letter is that the non-adaptive products of evolution are best understood from an evolutionary perspective. Again, this seems to sell the opportunity short. What of the adaptive products of evolution, such as intelligence or patience?
Having now worked through Wilson’s posts, I am not overly optimistic that there will be much useful coming out of the Evolution Institute. There are no shortages of coherent attacks on the neo-classical, hyper-rational model of economics and if the Evolution Institute is going to simply join the queue, we will not hear much more interesting out of them. We will see if my pessimism is borne out when the Institute moves from its methodological critique and starts to deliver substantive policy proscriptions.