Gandolfi, Gandolfi and Barash’s Economics as an Evolutionary Science

The fundamental insight that utility in economics should be based on the concept of fitness from evolutionary biology lies at the heart of Gandolfi, Gandolfi and Barash’s Economics as an Evolutionary Science: From Utility to Fitness.

The first half of the book is fantastic, as the authors describe the economic way of thinking and Gary Becker’s seminal work on families, marriage and reproduction. For someone unfamiliar with Becker’s work, it is a good introduction to what Becker was setting out to achieve. The authors then take Becker’s framework and build on it to give it an evolutionary basis.

The authors do this by constructing a model in which people maximise their long-term fitness through balancing investments in quantity of offspring, quality of offspring and other capital investments. It is by maximising long-term intergenerational wealth, which can be converted into quantity and quality of children as required, that an agent can maximize fitness. This provides a basis for the declining fertility in modern economies, with the authors arguing that investment in quality of children is a long-term fitness maximising strategy. It is not the number of children in the next generation that matters but the ultimate number of children.

I like this idea and approach, but ultimately, I am not convinced that it is true. To take an extreme case, what level of investment should a billionaire make in a child? Would they maximize their long-term fitness by having one or two children and bequeathing their entire fortune to them, or should they establish a harem and seek to have hundreds of children, each of whom could still have millions of dollars of investment in them. It would seem to me that the latter strategy would maximize fitness, particularly when you consider uncertainty across generations. One should reap while you can, but the rich do not appear to be doing this. There is an over investment in quality due to humans being in an environment to which they are not yet adapted.

Ultimately this is an empirical question, but the correlation between numbers of children across generations in developed countries suggests that those with a predisposition to sacrifice some quality for quantity are following the higher fitness strategy. The lack of effect of parents on child outcomes, as found through twin research, also suggests that parental investment has marginal returns at best.

If the current population is not optimizing fitness, the usefulness of the link between utility and fitness changes. Rather than seeking to equate each, the predispositions shaped by evolution can be used to determine the utility function, with the two differing to the extent the environment is no longer one in which those predispositions are fitness maximizing. For longer term modeling, the evolutionary system needs to be considered dynamically, as people adapt to the new environment.

In addition to the basic framework, the book contains chapters on sexual conflict and cooperation. While each are important considerations for the model, unfortunately they are not directly incorporated into it. In particular, it would be interesting to apply the discussion of signaling to the model, as the model does not provide an explanation for consumption above that required for survival.

The chapter on the evolution of cooperation treads ground covered in more detail by many other books, and unlike the earlier chapters, appears to be included for completeness rather than novelty.

Regardless of my critique, this is an important book. The challenge is for other scholars to take the framework laid out in the book and to start to adopt it for a modern environment.