A few weeks ago, evolutionary biologist David Sloan Wilson contacted me about an essay series he’s editing called Advice for an Aspiring Economist. The series aims to give advice to students who are interested in learning ‘evonomics’ — economics from an evolutionary perspective. It will be published in This View of Life Magazine and in Evonomics.
To my surprise, Wilson asked me to contribute an essay. I’m honored for two reasons. First, I still consider myself an ‘aspiring economist’. (I’m hardly an established academic.) Second, David Sloan Wilson is one of my intellectual heroes. For decades he’s battled against academic orthodoxy, promoting the idea that groups are an important unit of natural selection. Today, his ideas are widely accepted. Sociality, many scientists now believe, cannot evolve without group selection.
Back to economics. Here’s my contribution to Wilson’s series: advice for an aspiring economist.
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One of my favorite criticisms of the economics discipline is this:
… [Economics] provides an outstanding example of the “you can’t get there from here” principle in academic cultural evolution. It will never move if we try to change it incrementally.1
This criticism comes not from an economist, but from an evolutionary biologist — David Sloan Wilson. My advice to an aspiring (evolutionary-minded) economist is to remember Wilson’s words: you can’t get there from here.
Here’s what I mean.
If you learn economics as it’s taught in most universities, you’ll find it difficult to think in evolutionary terms. The reason is simple. Mainstream (neoclassical) economics treats humans as asocial animals — ‘self-contained globules of desire’.2 Unfortunately, this asocial model is wrong. Looking at human evolution, it’s clear that we’re a social species. Actually, we’re more than that. Humans are the most social of all mammals. Our group-forming ability is rivalled only by the social insects (ants, bees). Humans, in short, are ultra-social.3
Because mainstream economics treats humans as asocial, it’s a thought barrier to doing evolutionary science. As such, my advice is to not learn economics as it’s taught in most universities.
This advice may seem odd. Isn’t it like telling a chemistry student to skip Chemistry 101? Actually, no. It’s like telling a chemistry student to skip Phlogiston 101.
Never heard of phlogiston? That’s because it’s a long abandoned theory. In the 18th century, scientists proposed that combustion was caused by the release of a fire-like substance called ‘phlogiston’. The problem was that nobody could detect this mysterious element. Instead, scientists discovered oxygen. And so phlogiston theory was abandoned in favor of the oxygen theory of combustion.
Today, chemistry students don’t learn phlogiston theory. Science pedagogy has moved on. Unfortunately, economics pedagogy has not. If you take Economics 101, you’re learning the social-science equivalent of phlogiston theory — 19th-century ideas that should have been (but were not) abandoned. So if you’re an aspiring economist, skip the phlogiston theory. Skip Economics 101.4
That brings me back to Wilson’s statement: ‘you can’t get there from here’. The ‘here’ is both a theory and a place. You can’t use mainstream (neoclassical) economics to understand human genetic and cultural evolution. So if you want to do evonomics, you need to dump neoclassical theory. The catch is that you can’t dump neoclassical theory if you study in an economics department. That’s because in most econ departments, neoclassical theory is the core pedagogical canon. It’s required learning.5
Find a safe space
So what is an aspiring (evolutionary-minded) economist to do? I recommend finding a safe space to learn economics outside a traditional economics department. There are a few options.
One option is to study at a ‘heterodox’ economics department. (Here’s a list of such departments.) Heterodox departments are open to pluralist ideas and generally skeptical of neoclassical theory. These departments may not explicitly teach evolutionary ideas, but if you adopt an evonomics approach, you probably won’t encounter pushback.
Another option — one that I chose — is to learn economics in an interdisciplinary department. I studied in the Faculty of Environmental Studies at York University (Toronto). Students and professors in the department came from many different academic niches. I found the interdisciplinary environment both safe (for unorthodox ideas) and stimulating.6
Here’s what I like about interdisciplinary programs. First, they’re designed to be open. You can usually take courses from any department. (I took courses in ecology, sociology, and political science, among others.) Second, you’ll be around people with diverse ideas. Budding economists need to interact not only with other social scientists, but with biologists, ecologists, and other natural scientists. In an interdisciplinary program, you can do so daily. That stops you from getting stuck in an academic ‘silo’.
Studying economics in an interdisciplinary environment does have some downsides — not for doing science, but for advancing your career. If you dream of working in a university economics department, getting an interdisciplinary education is potentially career limiting. Economics departments tend to hire people who received a ‘traditional’ (i.e. neoclassical) economics training. (This revolving door is a big reason why the economics discipline is slow to change.) So if your goal is to be an economics professor, know that studying in an interdisciplinary program limits your options.
That being said, an interdisciplinary training also opens new doors. There’s a growing number of interdisciplinary programs where you could teach evonomics. And outside academia, the general public hungers for new economic thinking. For the past forty years, public discourse has been dominated by individualistic dogma. There has never been a greater need to remind people that humans are a social species, and that we’ve evolved to be so.
Majestic and practical
One of the beautiful things about evolutionary thinking is that it’s both majestic and practical.
Let’s start with the majestic. Humans are a social species — that much you probably know. But do you know the evolutionary history of our sociality? It extends deep into our past — far beyond what you might think. The evolution of sociality starts not with social animals like ourselves, but with social cells. Your body is not a single entity, but rather a group of cells that have evolved to cooperate. All multicellular organisms are similar — an evolved group of cooperating cells.
We can go deeper still. Your cells are composed of social organelles. Eukaryotic cells (like yours) are the result of an ancient merger of social prokaryotes. One prokaryote became the cytoplasm and nucleus. The other became the mitochondria — the cell powerhouse. Going still deeper, these organelles are composed of social molecules that somehow (at the dawn of life) managed to ‘cooperate’.7
Human sociality, then, is part of a long social lineage among life on Earth. Organisms that were once autonomous started to cooperate in groups. Sometimes these groups became so coherent that we think of them as ‘individuals’. It’s a story that has repeated countless times over a billion years. And humans are part of it. When I study economics, I try to keep this majestic history in mind.
What about practical problems? Perhaps surprisingly, the deep history of sociality is of practical importance. All social animals — whether human or otherwise — must solve a basic problem. For groups to succeed, group members must act prosocially. The problem is that within groups, it’s usually best for individuals to act selfishly. Among social animals, then, there’s a clash between individual interest and group interest. David Sloan Wilson and E.O. Wilson call this clash ‘the fundamental problem of social life’.8
Successful social animals have all solved this fundamental problem. They have suppressed self interest (at least to some degree) and promoted prosociality. The question is how?
In some animals (like ants), it seems clear that prosociality is instinctual. But in other animals (like humans) prosociality must be nurtured. What norms and institutions best foster human cooperation? We’re only beginning to answer this question.9 But what seems clear is that this question should form the foundation of economics.
Back to you, the aspiring economist. Do you marvel at the deep history of our evolved sociality? Do you also want to improve humanity’s lot? If so, the economics discipline needs you. Help move the field beyond its obsession with individualism. What awaits you is not fame or fortune, but the satisfaction of making the world a better place.
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Notes
- From David Sloan Wilson’s The Neighborhood Project.↩
- ‘Globules of desire’ is political economist Thorstein Veblen’s mocking term for the economic model of human behavior. See Veblen’s seminal essay Why is Economics not an Evolutionary Science?↩
- Humanity’s ultrasocial nature is a hot topic of research. Two good books on the subject are Peter Turchin’s Ultrasociety and E.O. Wilson’s The Social Conquest of the Earth.↩
- It’s not just renegades like myself who compare economic theory to ‘phlogiston’. Nobel-prize winning economist Paul Romer made the analogy in his essay The trouble with macroeconomics.↩
- For a satire of life in a (mainstream) economics department, see Axel Leijonhufvud’s essay Life Among the Econ.↩
- Students of evonomics take note: York University, together with McGill University and University of Vermont, is currently hosting the Economics for the Anthropocene graduate program. It aims to give an economics education that connects the ecological and economic realities of the Anthropocene.)↩
- The deep history of sociality is often called the ‘major transitions in evolution’. See John Maynard Smith and Eörs Szathmáry’s book of the same name for an exposition. For an interpretation of these transitions using the theory of multilevel selection, see Samir Okasha’s paper Multilevel Selection and the Major Transitions in Evolution.↩
- See David Sloan Wilson and E.O. Wilson’s essay Rethinking the theoretical foundation of sociobiology.↩
- For research on how human groups suppress selfishness and promote altruism, see David Sloan Wilson, Elinor Ostrom, and Michael Cox’s paper Generalizing the core design principles for the efficacy of groups.↩
Further reading
Leijonhufvud, A. (1973). Life among the econ. Economic Inquiry, 11(3), 327–337.
Okasha, S. (2005). Multilevel selection and the major transitions in evolution. Philosophy of Science, 72(5), 1013–1025.
Romer, P. (2016). The trouble with macroeconomics. The American Economist, 20, 1–20.
Smith, J. M., & Szathmary, E. (1997). The major transitions in evolution. Oxford University Press.
Turchin, P. (2016). Ultrasociety: How 10,000 years of war made humans the greatest cooperators on earth. Chaplin, Connecticut: Beresta Books.
Veblen, T. (1898). Why is economics not an evolutionary science? The Quarterly Journal of Economics, 12(4), 373–397.
Wilson, D. S. (2011). The neighborhood project: Using evolution to improve my city, one block at a time. New York: Little, Brown & Company.
Wilson, D. S., Ostrom, E., & Cox, M. E. (2013). Generalizing the core design principles for the efficacy of groups. Journal of Economic Behavior & Organization, 90, S21–S32.
Wilson, D. S., & Wilson, E. O. (2007). Rethinking the theoretical foundation of sociobiology. The Quarterly Review of Biology, 82(4), 327–348.
“The focus on equilibrium and prices is due to the hypothetico-axiomatic method, a.k.a. the deductive methodology. The axioms are postulated that people are individualistic and focus on maximising their own satisfaction (named ‘utility’, in honour of Jeremy Bentham, the first economist to argue for the legalisation of the then banned practice of charging interest; Bentham, 1787). Next, a number of assumptions are made: perfect and symmetric information, complete markets, perfect competition, zero transaction costs, no time constraints, fully flexible and instantaneously adjusting prices. McCloskey (1983) has argued that economics has been using mathematical rhetoric to enhance the impression of operating scientifically. Equilibrium will not obtain, if only one of the axioms and assumptions fails to hold. But their accuracy is not tested. Yet, one can estimate the probability of obtaining equilibrium.
Despite the claims to rigour, the pervasive equilibrium argument and focus on prices reveal a weak grasp of probability mathematics: Since for partial equilibrium in any market, at least the above eight conditions have to be met, if one generously assumed each condition is more likely to hold than not – corresponding to a probability higher than 50%, for instance, 55% – then the probability of equilibrium equals the joint probability of all conditions, which is 0.55 to the power of 8: less than 1%. As the probability of each of the eight conditions being an accurate representation of reality is likely significantly lower than 55% (most having a probability approaching zero themselves), it is apparent that the probability of partial equilibrium in any one market approaches zero (Werner, 2014b). For equilibrium in all markets, these very low probabilities have to be multiplied by each other many times. So we know a priori that partial, let alone general equilibrium cannot be expected in reality. Equilibrium is a theoretical construct unlikely to be observed in practice. This demonstrates that reality is instead characterised by rationed markets. These are not determined by prices, but quantities: In disequilibrium, the short side principle applies: whichever quantity of supply and demand is smaller can be transacted, and the short side has the power to pick and choose with whom to trade (not rarely abusing this market power by extracting ‘rents’, see Werner, 2005).1
Without equilibrium, quantities become more important than prices.”
https://www.sciencedirect.com/science/article/pii/S0921800916307510#bb0295
Hi James. Interesting paper. Thanks for sharing.
“Today, his ideas are widely accepted. Sociality, many scientists now believe, cannot evolve without group selection.”
Can you say on what you base that judgment?
I’m not basing this statement on any rigorous survey of evolutionary biologists. But my impression from the literature, especially in sociobiology, is that group selection is becoming and more and more accepted.
Group selection seems to me to be perfectly plausible. While it is true that genes are transferred between individuals, relatives have many of them in common. Group selection can also apply to non-heritable behaviors. If a group develops a culture that is more successful in a given environment, their behavior will be selected for by a relative increase in population vs a culture that is less adept at exploiting environmental resources. And then there is the effect of epigenetic influences, which can apply to whole groups affected by the same circumstance.
But the tendency of population increasing genes and behaviors to be selected for can cause problems when resources, like fossil fuels, are only temporarily abundant. There have evolved few genetic or behavioral attributes favoring decreased reproduction for times of temporary surplus. Under-reproduction is far more likely to lead to extinction than over-reproduction so it is very rare.
Evolutionary principles suggest that we humans will not be able to restrain our genetic and social tendency toward maximizing resource use and maximizing biotic potential. If fossil fuels did not exist, that might not be a problem, but since they do, we are screwing up big time. We just can’t help it.
Joe,
It sounds like you might be alluding to Howard Odum’s (and Lotka’s) maximum power principle: https://en.wikipedia.org/wiki/Maximum_power_principle
Reminds me that I’ve been meaning to write a post on that.
Yes, except that it is maximum net useful power (for support of biological processes), which some people tend to gloss over. It’s not just maximum energy dissipation. Otherwise it is hard to explain how cold blooded animals could ever successfully compete with animals with higher metabolic rates. After a billion years of evolution, all living things have had their various energy strategies very well fine tuned.
It is lovely, but probably dangerous, to read someone you agree with completely. I look at cancer as a biological model for classical economics.
Maybe worth mentioning that there may be a dark side to the social animal, an evolutionary trait linked to social behaviour that has outlived its usefulness. We have an overwhelming urge to believe things that are not true. Though this may have been valuable for a hunter-gatherer pack, it is not useful in understanding how things work or making them work better.
By the way, I note this morning that teaching of anti-capitalism has been banned in English schools. https://www.theguardian.com/education/2020/sep/27/uk-schools-told-not-to-use-anti-capitalist-material-in-teaching
Hi Michael,
I agree that there’s a dark side to our social nature. It means we’re prone to groupthink. I wrote up my thoughts here: https://economicsfromthetopdown.com/2019/08/23/tribalism-in-science-and-economics/
This is like the assumption that the subject of economics is only one kind of topic. In order to properly understand more about it we need to study parts of it separately, particularly the ones that are unrelated, but are confusing when taken together. This applies to the differences between microecononics and macroeconomics, where there are really very few connecting aspects. Since most people who view economics don’t do this, they have little chance of getting a good grasp about what is really hapening, without being confused.
I would suggest that they forget about their own microeconomicsl needs and look to the Big Picture of macreoconomics. Here it is possible to not get so personally confused and try to analyise what is going on between the greater and most basic parts of the wholistic subject.
I have done this in my writings, so I suggest that the following explanation deserves the attention of a serious reader and enqiurer of our social system.
Making Macroeconomics a Much More Exact Science
Today macroeconomics is treated inexactly within the humanities, because at a first look it appears to be a very complex and easily confused matter. But this does not give it fair justice, because we should be trying to find an approach to the topic and examine it in a better way that avoids these problems of complexity and confusion. Suppose we ask ourselves the question: “how many different KINDS of financial (business) transaction occur within our society?” Then the simple and direct answer shows that that only a limited number of them are possible or necessary.
Although our sociological system comprises of many millions of participants, to properly answer this question we should be ready to consider the averages of the various kinds of activities (no matter who performs them), and simultaneously to idealize these activities so that they fall into a number of commonly shared ones. This employs some general terms for expressing the various types of these transactions, into what becomes a relatively small number of operations. Here, each activity is found to apply between a particular pair of agents—each one having individual properties. Then to cover the whole sociological system of a country, the author finds that it requires only 19 kinds of exchanges of the goods, services, access rights, taxes, credit, investment, valuable legal documents, etc., verses the mutual opposing flows of money. Also these flows need to pass between only 6 different types of representative agents.
The analysis that led to this initially unexpected result was prepared by the author and it may be found in his working paper (on the internet) as SSRN 2865571 “Einstein’s Criterion Applied to Logical Macroeconomics Modeling”. In this model these 19 double flows of money verses goods, etc., are shown to pass between the 6 kinds of role-playing entities. Of course, there are a number of different configurations that are possible for this type of simplification, but if one tries to eliminate all the unnecessary complications and sticks to the more basic activities, then these particular quantities and flows provide the most concise result, which is presentable in a comprehensive and seamless manner, and one that is suitable for further analysis of the whole system.
Surprisingly, past representation of our sociological system by this kind of an interpretation model has neither been properly derived nor presented before. Previously, other partial versions have been modeled (using up to 4 agents, as by Professor Hudson), but they are inexact due to their being over-simplified. Alternatively, in the case of econometrics, the representations are far too complicated and almost impossible for students to follow. These two reasons of over-simplification and of over-complexity are why this non-scientific confusion is created by many economists and explains their failure to obtain a good understanding about how the whole system works.
The model being described here in this paper is unique, in being the first to include, along with some additional aspects, all the 3 factors of production, in Adam Smith’s “Wealth of Nations” book of 1776. These factors are Land, Labor and Capital, along with their returns of Ground-Rent, Wages and Interest/Dividends, respectively. All of them are all included in the model, as a diagram in the paper.
(Economics’ historians will recall, as originally explained by Adam Smith and David Ricardo, that there are prescribed independent functions of the land-owners and the capitalists. The land-owners speculate in the land-values and rent it to tenants, whilst the capitalists are actually the owners/managers of the durable capital goods used in industry. These items may be hired out for use. Regrettably, for political reasons, these 2 different functions were deliberately combined by John Bates Clark and company about 1900, resulting in the later neglect of their different influences on our sociological system– the terms landlord and capitalist becoming virtually synonymous along with the expression for property as real-estate.)
The diagram of this model is in my paper (noted above). A mention of the related teaching process is also provided in my short working paper SSRN 2600103 “A Mechanical Model for Teaching Macroeconomics”. With this model in its different forms, the various parts and activities of the Big Picture of our sociological system can be properly identified and defined. Subsequently by analysis, the way our sociological system works can then be properly seen, calculated and illustrated.
This analysis is introduced by the mathematics and logic that was devised by Nobel Laureate Wellesley W. Leontief, when he invented the important “Input-Output” matrix methodology (that he originally applied only to the production sector). This short-hand method of modeling the whole system replaces the above-mentioned block-and-flow diagram. It enables one to really get to grips with what is going-on within our sociological system. Subsequently it will be found that it is the topology of the matrix which actually provides the key to this. The logic and math are not hard and is suitable for high-school students, who have been shown the basic properties of square matrices.
By this technique it is comparatively easy to introduce a change to a preset sociological system that is theoretically in equilibrium (even though we know that this ideal is never actually attained–it simply being a convenient way to begin the study). This change creates an imbalance and we need to regain equilibrium again. Thus, sudden changes or policy decisions may be simulated and the effects of them determined, which will point the way to what policy is best. In my book about it, (see below) 3 changes associated with taxation are investigated in hand-worked numerical examples. In fact when I first worked it out, the irrefutable logical results were a surprise, even to me!
Developments of these ideas about making our subject more truly scientific (thereby avoiding the past pseudo-science being taught at universities), may be found in my recent book: “Consequential Macroeconomics—Rationalizing About How Our Social System Works”. Please write to me at chesterdh@hotmail.com for a free e-copy of this 310 page book and for additional information.