Beyond Generalized Darwinism: Where Biology Meets Economics
Exploring how evolutionary economics moves beyond simple biological parallels to develop a richer understanding of economic change through naturalistic philosophy.
The Unlikely Marriage of Disciplines
Imagine if the same principles that explain the diversity of life on Earth could also unlock the mysteries of market fluctuations, technological revolutions, and economic development. This isn't a thought experiment—it's the fascinating frontier where evolutionary economics meets the philosophy of biology, pushing beyond "generalized Darwinism" to explore how economies truly evolve.
Biological Evolution
The process by which organisms change over time through variation, selection, and inheritance.
Economic Evolution
The process of economic change driven by innovation, competition, and institutional development.
For decades, economists and biologists have engaged in a cautious dance around Darwin's revolutionary ideas. While evolutionary economics has long drawn inspiration from biology, recent advances promise a more fruitful partnership than simply treating businesses as organisms and markets as ecosystems 1 . This article explores how cutting-edge economic thinking is moving beyond simplistic biological parallels to develop a richer understanding of economic change through the lens of naturalistic philosophy—the view that scientific methods should investigate all areas of reality, including the "human spirit" 2 .
What is Evolutionary Economics?
More Than Just "Survival of the Fittest"
Evolutionary economics treats economic development as an open-ended process rather than a system always moving toward equilibrium 5 . Unlike traditional economics that emphasizes rationality, optimization, and stability, evolutionary economics focuses on change, innovation, and complex interdependencies as the real drivers of economic systems 8 .
The field's founding father, Thorstein Veblen, first coined the term "evolutionary economics" in the late 19th century, questioning why economics wasn't an evolutionary science 8 . Veblen recognized that the fundamental weakness of neoclassical economics was that "only prices and volumes matter" 5 . He applied evolutionary biological concepts to economics, noting that economic change is a gradual process influenced by anthropological and psychological factors—our very human nature 5 .
Thorstein Veblen
Founding father of evolutionary economics who first applied biological evolutionary concepts to economic systems.
Three Pillars of Evolutionary Economics
Modern evolutionary economics rests on three foundational principles 5 :
1. System Dynamics
Innovation emerges from within the economic system itself (endogenously) through a continuous process, not as discrete external shocks.
2. Historical Time & Path Dependency
Economic choices are historically conditioned—past decisions create "lock-in" effects that constrain future possibilities.
3. The Innovation Process
From invention to diffusion, innovation involves organizations and actors learning, sharing knowledge, and co-evolving together.
"Innovation-driven economic processes are open-ended with the economy never in equilibrium, or even close to equilibrium" 5 .
The Generalized Darwinism Debate
Can Darwin Travel Beyond Biology?
Generalized Darwinism (also called universal Darwinism) applies Darwinian principles of variation, selection, and retention outside biological science 5 . The appeal is straightforward: if Darwin's framework explains how complex biological systems evolve through selection acting on variation, perhaps similar processes shape economic systems.
Proponents like Hodgson and Knudsen argue that abstract Darwinian logic applies equally to economic evolution, with firms and routines standing in for organisms and genes 1 . They see evolution by variation, selection, and heritability as equally applicable to simple and complex systems 1 .
Why "Hardened" Darwinism Isn't Enough
Critics, however, question whether this approach captures the full richness of economic change. Philosopher of biology Werner Callebaut suggests that Generalized Darwinism in its current form represents a "hardened Modern Synthesis" that may be less fruitful than exploring more recent biological advances 1 .
The limitation lies in what gets lost in translation. Human economies involve intentionality, learning, and foresight—elements largely absent from biological evolution. Whereas genetic variation is blind, economic innovation is often directed and purposeful. The project of Generalized Darwinism has been criticized for sometimes paying "lip service to developmental evolution" without fully engaging with its implications 1 .
Generalized Darwinism: Pros and Cons
Strengths
- Provides a unifying framework
- Explains adaptation and change
- Applicable to complex systems
Limitations
- Oversimplifies human intentionality
- Neglects developmental processes
- May miss unique economic mechanisms
Naturalistic Philosophy: Bridging the Divide
What is Naturalism?
Naturalism in philosophy asserts that reality contains nothing "supernatural" and that the scientific method should investigate all areas of reality, including human consciousness, culture, and economic systems 2 . It comes in two forms:
- Ontological naturalism: Concerned with what exists—maintaining that reality has no place for "supernatural" entities
- Methodological naturalism: Concerned with how we investigate reality—claiming authority for the scientific method 2
This philosophical framework provides common ground for biologists and economists to talk meaningfully about evolution across different domains.
Biological Naturalism and the Mind
Biological naturalism, proposed by philosopher John Searle, offers particular relevance to economics. This theory acknowledges that all mental phenomena are caused by neurobiological processes in the brain, while also recognizing that mental phenomena are higher-level features of the brain that can't be eliminated or reduced to something else 6 .
This perspective helps reconcile the objective reality of economic systems with the subjective experiences of economic actors—a crucial tension in evolutionary economics. If consciousness is both caused by brain processes and capable of causing physical effects, we can meaningfully discuss how human intentionality shapes economic evolution without resorting to supernatural explanations 6 .
Naturalism as a Bridge Between Disciplines
Biology
Studies evolutionary processes in living systems
Naturalistic Philosophy
Provides common methodological ground
Economics
Studies evolutionary processes in economic systems
Experiment in Action: Guppies and Selection Pressure
How Evolution Plays Out in Real Time
While evolutionary economics deals with complex human systems, we can observe the core principles of evolution at work in controlled experiments with other species. Biologist John Endler's work with Trinidadian guppies offers a beautiful example of evolution in action that illustrates concepts relevant to economic systems 4 .
Endler noticed that guppy populations exhibited different color patterns depending on their environment. In streams with less dangerous predators, male guppies were brightly colored—female guppies prefer colorful mates. But where predators were more dangerous, the males were significantly duller, since bright colors made them easier targets 4 .
The Experimental Design
Endler didn't stop at observation; he designed a elegant experiment:
1. Initial population
Endler transferred guppies from an area with dangerous predatory fish (where males were dull-colored) to a predator-free region 4 .
2. Generational time
He left them for approximately 15 guppy generations (about two years) 4 .
3. Measurement
He returned to examine whether and how the population had evolved 4 .
The results were striking: without predators eliminating bright fish, sexual selection took over. Within those 15 generations, the population had rapidly evolved to feature brightly colored males, demonstrating how quickly selection can reshape a population when environmental conditions change 4 .
Guppy Color Evolution Under Different Selection Pressures
| Environment | Predation Pressure | Male Coloration | Primary Selective Force |
|---|---|---|---|
| Original habitat | High | Dull | Predator avoidance |
| New habitat | Low | Bright | Sexual selection |
| Experimental result | Changed from high to low | Evolved from dull to bright | Shift from predator-driven to mate-driven selection |
Biological vs. Economic Evolutionary Concepts
| Biological Concept | Economic Analog | Key Similarities |
|---|---|---|
| Genetic variation | Innovation and diversity of business models | Raw material for evolutionary change |
| Natural selection | Market selection | Determines which variations persist |
| Reproductive success | Firm profitability and growth | Determines which entities expand influence |
| Environmental adaptation | Market responsiveness | Ability to adjust to changing conditions |
| Speciation | Market niche formation | Development of specialized forms |
Implications for Economic Systems
This experiment illustrates several concepts crucial to evolutionary economics:
Rapid adaptation is possible
Significant evolutionary change can occur relatively quickly when conditions change, analogous to how industries can transform rapidly under new technologies 4 .
Multiple competing pressures
The trade-off between predator avoidance and mating success parallels how firms balance competing pressures like short-term profitability versus long-term innovation 4 .
The Evolutionary Economist's Toolkit
Modern evolutionary economists employ concepts that go far beyond simple biological metaphors:
Key Concepts in Modern Evolutionary Economics
| Concept | Description | Biological Parallel |
|---|---|---|
| Bounded rationality | Decision-makers have limited cognitive resources | Organisms face information processing constraints |
| Routines and capabilities | Stable patterns of business behavior | Organizational analogs to genes or habits |
| Co-evolution | Multiple elements changing together | Species evolving in response to each other |
| Path dependency | Historical constraints on future possibilities | Evolutionary history constraining future adaptations |
| Technological trajectories | Patterns of innovation along certain paths | Developmental constraints in evolution |
| Selection environment | Market and institutional context that determines success | Ecological context determining fitness |
Biological Evolution
- Variation through genetic mutation
- Selection through environmental pressures
- Inheritance through genetic transmission
- Adaptation to ecological niches
Economic Evolution
- Variation through innovation and experimentation
- Selection through market competition
- Retention through routines and institutions
- Adaptation to market niches
New Frontiers in Evolutionary Economics
Beyond Conventional Approaches
The evolutionary approach continues to develop, with new frameworks emerging to address limitations of both traditional economics and earlier evolutionary models. As Potts and Dopfer note, centuries of industrial innovation have created new economic problems—digital disruption, environmental challenges—that require fresh approaches 9 .
These new frameworks incorporate insights from systems theory, cultural science, and evolutionary semiotics, focusing on "axial variables" that are fundamentally transforming our economic systems 9 . They recognize that the digital age has introduced what they term "hyperobjects"—entities like the internet, AI systems, and global ecologies that operate at scales and temporalities beyond traditional economic analysis 9 .
Unified Growth Theory
Economist Oded Galor's Unified Growth Theory represents another significant advance, depicting economic development throughout human history as a continuous process driven by technological progress, human capital accumulation, and the co-evolution of biological, social and cultural features that favor development 8 .
This framework helps explain the transition from Malthusian stagnation to sustained economic growth, showing how technological advancements eventually create demand for educated labor, leading to demographic transition and improved living standards 8 . It presents economic history as an genuinely evolutionary process, with each phase creating conditions for the next.
The Future of Evolutionary Economics
Digital Transformation
Understanding AI and automation as evolutionary forces
Sustainability Transitions
Applying evolutionary principles to environmental challenges
Global Systems
Modeling complex interdependencies in the global economy
Conclusion: The Evolving Conversation
The dialogue between biology and economics has moved far beyond simplistic Darwinian analogies. Today, evolutionary economics draws on sophisticated philosophical naturalism and complex systems thinking to understand economies as genuinely evolutionary systems—always changing, never at equilibrium, and shaped by history, innovation, and selection processes 1 2 5 .
What makes this partnership so fruitful is its recognition that economic systems are complex, historical, and creative. They're not mechanical systems moving toward predetermined equilibria, but evolutionary systems discovering their future possibilities through processes of variation, selection, and co-evolution.
As we face increasingly complex economic challenges—from digital transformation to climate adaptation—this evolutionary perspective may prove essential. It offers not just better predictions, but a deeper understanding of how change actually happens in human affairs, acknowledging that economic outcomes are "to be discovered, not presumed in advance" 5 .
The conversation between biology and economics continues to evolve, promising new insights into that most dynamic of systems: human civilization itself.