Summary To understand the present situation we must know something about its history. The ‘Rise of the West’, which grew out of the ‘European Miracle’, is a special case of cultural evolution. The development of science is an important element in this process. Cultural evolution went hand in hand with biological evolution. Evolutionary epistemology illuminates the achievements and the evolution of cognitive sensory apparatus of various species. Man's cognitive sensory apparatus is adapted to the ‘mesocosmos’, the world of medium-sized dimensions. (...) The biological structures constitute the hardware of the cognitive sensory apparatus, while certain expectations and theories, which are ontogenetically apriori, constitute the corresponding system software. A distinction is introduced between ‘primary theories’ (linked to the sensory apparatus) and ‘secondary theories’. The latter are the result of attempts to meet the demand for an explanation of phenomena that cannot be explained in terms of ‘primary theories’. Two subsets of ‘secondary theories’ are compared: spiritualistic-personalized theories and scientific theories. From the historical point of view the scientific secondary theories are but a special subset of the class of secondary theories. From the systematic point of view it is instructive to focus on a comparison of the two subsets: what do they have in common? in what respects do they differ? The rise of scientific thinking is closely linked to the ‘European Miracle’. How (and when and why) did the West grow rich? To answer this question we must first produce an explanation of the principle: theories about the consequences of institutional arrangements. Then we can give a historical explanation of why this development took place in Europe and only there. It is claimed that the secret of success, economic wealth and the first approximations to relatively free societies, was the taming of the state, the taming of cleptocracy (independent of the nature of the agency having cleptocratic appetites, be it princes or parliaments). The taming of the state is a pre-democratic achievement. Finally, the consequences of institutional arrangements for scientific progress and innovation are examined. Only if the system is market-like, will it link individual effort with reward and, through the competitive process, encourage the wide dissemination and use of new ideas. There is no tradeoff between freedom on the one hand and economic success and the growth of scientific knowledge on the other. Freedom and the ensuing flexibility is the key to the past and to the future. (shrink)

This paper traces back the sources of our present legal system and of market economy to Medieval Europe which itself benefited from Hellenistic and Roman legal culture and commercial practices. Roman provinces placed Rome in the wider Greek cultural and commercial world. If Aristotle was already transcending the narrow polis-based conceptions of his predecessors, after him Hellenistic Civilization saw the emergence of a new school of philosophy: Stoicism. The legal thought in the Latin West will hence be characterized by Cicero’s (...) writings and its Stoic sources. The Roman legal system was similar to the later northern European customary law and the English common law; Roman law was evolutionary and customary. The rise of Western individualism, whether it dates back to St. Augustine in the fifth century, or to the two Papal Revolutions of Gregory I (establishing the nuclear family as the core of individualism) and of Gregory VII, also played a crucial role in shaping the western legal tradition. The paper describes the main forces that led to this second (Gregorian) revolution. Monasticism is one of them. Benedictine monasticism plaid a leading role in the Peace of God Movement. Hence collective oath-taking by groups in the name of peace was essential in the founding of cities and in the formation of guilds. Europe’s economic resurgence in the Eleventh Century was on the basis of the creation of the rule of law by the Peace of God movement. This movement also allowed for Europe’s agricultural economy to progress. Indeed, the European Middle Ages is one of the major periods of technological innovation in the history of the world. The Gregorian Revolution itself was supported and financed by the Commercial Revolution: Italian bankers sustained Papal reformers against the Emperors. The independence of the Italian cities and provinces reveals one of the most important consequences of the Gregorian Revolution: the polycentricism of Western Europe. This Revolution also witnessed the first large number of political pamphlets in European history; the Gregorian clergy emphasizing a compact theory of government. Soon after, the order of Cistercians was founded (1098) and underwent spectacular growth during the next two centuries. The Cistercians accepted no rents or labor services from feudal donors but would take only full possession of land to do with it as they wished.These monasteries were the most economically effective units that had ever existed in Europe, and perhaps in the world, before that time. Finally, the Magna Carta (1215) that will be so influential on modern political thought can be seen as a direct consequence of the Gregorian Revolution. (shrink)

For most of human history, economic systems were personal in nature--people normally interacted with people they knew personally and knew well. Today's modern market economies are impersonal--people normally interact with people they do not know personally. The historical movement from personal to impersonal systems was necessary for societies to develop the specialization of labor needed for modern production technologies. That is, the high standards of living in the developed world are due to these impersonal systems. However, the ethical systems theologians (...) apply to modern market systems were developed for personal societies and are often inappropriate for impersonal societies. In this article, we develop the differences between personal and impersonal systems, examine the writings of a number of theologians who are very critical of market economies, and attempt to show how a different ethical approach is needed. (shrink)

This article discusses the challenges raised by the inclusion of evolutionary elements in the theories of Carl Menger, Joseph Schumpeter, and Friedrich Hayek. Each adopted an idiosyncratic position in terms of method of inquiry, focus, and general message. The breadth of the topics and phenomena they cover testifies to the great variety of interpretations and potential uses of evolutionary concepts in economics. Menger, who made no reference to Darwin’s theory, advanced an “organic” view of the emergence of social institutions. Schumpeter (...) elaborated an original theory of industrial development based on the recurrent emergence and dissemination of innovations. Hayek adopted the biological notion of group selection and made it the central element in his theory of cultural evolution and the rise of the free market. The chapter concludes with a preliminary evaluation of the possible role that evolutionary theorizing might play in the future development of Austrian economics. (shrink)

Evolutionary economics often focuses on the comparison between economic competition and the process of natural selection to select the fitter members of a given population. But that neglects the other "half" of an evolutionary process, the mechanism for the generation of new possibilities that is key to dynamic efficiency. My topic is the process of parallel experimentation which I take to be a process of multiple experiments running concurrently with some form of common goal, with some semi-isolation between the experiments, (...) with benchmarking comparisons made between the experiments, and with the "migration" of discoveries between experiments wherever possible to ratchet up the performance of the group. The thesis is that parallel experimentation is a fundamental dynamic efficiency scheme to enhance and accelerate variation, innovation, and learning in contexts of genuine uncertainty or known ignorance. Within evolutionary biology, this type of parallel experimentation scheme was developed in Sewall Wright's shifting balance theory of evolution. It addressed the rather neglected topic of how a population on a low fitness peak might eventually be able to go "downhill" against selective pressures, traverse a valley of low fitness, and then ascend a higher fitness peak. The theme of parallel experimentation is used to recast and pull together dynamic and pluralistic theories in economics, political theory, philosophy of science, and social learning. (shrink)