Social scientists have paid insufficient attention to the role of law in constituting the economic institutions of capitalism. Part of this neglect emanates from inadequate conceptions of the nature of law itself. Spontaneous conceptions of law and property rights that downplay the role of the state are criticized here, because they typically assume relatively small numbers of agents and underplay the complexity and uncertainty in developed capitalist systems. In developed capitalist economies, law is sustained through interaction between private agents, courts (...) and the legislative apparatus. Law is also a key institution for overcoming contracting uncertainties. It is furthermore a part of the power structure of society, and a major means by which power is exercised. This argument is illustrated by considering institutions such as property and the firm. Complex systems of law have played a crucial role in capitalist development and are also vital for developing economies. (shrink)

The value of rational choice theory for the social sciences has long been contested. It is argued here that, in the debate over its role, it is necessary to distinguish between claims that people maximise manifest payoffs, and claims that people maximise their utility. The former version has been falsified. The latter is unfalsifiable, because utility cannot be observed. In principle, utility maximisation can be adapted to fit any form of behaviour, including the behaviour of non-human organisms. Allegedly 'inconsistent' behaviour (...) is also impossible to establish without qualification. This utility-maximising version of rational choice theory has the character of a universal 'explanation' that can be made to 'fit' any set of events. This is a sign of weakness rather than strength. In its excessive quest for generality, utility-maximising rational choice theory fails to focus on the historically and geographically specific features of socio-economic systems. As long as such theory is confined to ahistorical generalities, then it will remain highly limited in dealing with the real world. Instead we have to consider the real social and psychological determinants of human behaviour. (shrink)

Darwin himself suggested the idea of generalizing the core Darwinian principles to cover the evolution of social entities. Also in the nineteenth century, influential social scientists proposed their extension to political society and economic institutions. Nevertheless, misunderstanding and misrepresentation have hindered the realization of the powerful potential in this longstanding idea. Some critics confuse generalization with analogy. Others mistakenly presume that generalizing Darwinism necessarily involves biological reductionism. This essay outlines the types of phenomena to which a generalized Darwinism applies, and (...) upholds that there is no reason to exclude social or economic entities. (shrink)

The application of evolutionary ideas to socioeconomic systems has been an increasingly prominent theme in the work of Friedrich Hayek, and the motif has become dominant in his recent book. In an earlier issue of this journal, Viktor Vanberg raises two substantive criticisms of Friedrich Hayek' theory of cultural evolution that invoke some important questions concerning use of the evolutionary analogy in social science.

Despite growing interest in evolutionary economics since the 1980s, a unified theoretical approach has so far been lacking. Methodological and ontological discussions within evolutionary economics have attempted to understand and help rectify this failure, but have revealed in turn further differences of perspective. One aim of this article is to show how different approaches relate to different levels of abstraction. A second purpose is to show that generalized Darwinism is some way from the most abstract level, and illustrates how it (...) may be used to move towards more specific theoretical applications. Nevertheless, there is a long way to go before these become more evident. (shrink)

Gers (Biol Philos, 2011) provides a positive and constructive view of the project to generalise Darwinian principles in Geoffrey Hodgson and Thorbjørn Knudsen’s Darwin’s Conjecture. We note considerable overlap with his work and ours, and also with important recent work of Godfrey-Smith ( 2009 ), which Gers cites extensively. But we also note that there are differences in research objectives between Gers and Godfrey-Smith, on the one hand, and ourselves, on the other. Gers and Godfrey-Smith focus on the elucidation of (...) the most general principles possible. Our aim is to derive principles that are sufficiently abstract to span the natural and human social worlds, and then add additional principles to help understand the Darwinian evolution of human society. Furthermore, Gers and Godfrey-Smith critique a replicator concept that is different from ours. Once these points are made apparent, the criticisms are essentially disabled, and we end up in a position with different but complementary and overlapping research projects. (shrink)

Advancing a general Darwinian framework to explain culture is an exciting endeavor. It requires that we face up to the challenge of identifying the specific components that are effective in replication processes in culture. This challenge includes the unsolved problem of explaining cultural inheritance, both at the level of individuals and at the level of social organizations and institutions.

The established definition of replication in terms of the conditions of causality, similarity and information transfer is very broad. We draw inspiration from the literature on self-reproducing automata to strengthen the notion of information transfer in replication processes. To the triple conditions of causality, similarity and information transfer, we add a fourth condition that defines a “generative replicator” as a conditional generative mechanism, which can turn input signals from an environment into developmental instructions. Generative replication must have the potential to (...) enhance complexity, which in turn requires that developmental instructions are part of the information that is transmitted in replication. Demonstrating the usefulness of the generative replicator concept in the social domain, we identify social generative replicators that satisfy all of the four proposed conditions. (shrink)

Swedberg's two-volume collection of essays covering New Developments in Economic Sociology contains some excellent material, worthy of study by both economists and sociologists. However, there are definitional and conceptual problems in the whole project of "economic sociology" exacerbated by the disappearance of any consensus concerning the boundaries between the disciplines of sociology and economics. Neither has "economic sociology" acquired an adequately clear identity through the use of distinctive concepts or theories. Its future prospects are further questioned by recent changes within (...) economics itself, including greater attention to institutional structures, and the abandonment of strictly self-interested and context-independent rationality. Key Words: economic sociology • economics • disciplinary boundaries • social sciences. (shrink)

This Element examines the historical emergence of evolutionary economics, its development into a strong research theme after 1980, and how it has hosted a diverse set of approaches. Its focus on complexity, economic dynamics and bounded rationality is underlined. Its core ideas are compared with those of mainstream economics. But while evolutionary economics has inspired research in a number of areas in business studies and social science, these have become specialized and fragmented. Evolutionary economics lacks a sufficiently-developed core theory that (...) might promote greater conversation across these fields. A possible unifying framework is generalized Darwinism. Stronger links could also be made with other areas of evolutionary research, such as with evolutionary anthropology and evolutionary psychology. As evolutionary economics has migrated from departments of economics to business schools, institutes of innovation studies and elsewhere, it also needs to address the problem of its lack of a single disciplinary location within academia. (shrink)

This article discusses some of the ways in which Darwinism has influenced a small minority of economists. It is argued that Darwinism involves a philosophical as well as a theoretical doctrine. Despite claims to the contrary, the uses of analogies to Darwinian natural selection theory are highly limited in economics. Exceptions include Thorstein Veblen, Richard Nelson, and Sidney Winter. At the philosophical level, one of the key features of Darwinism is its notion of detailed understanding in terms of chains of (...) cause and effect. This issue is discussed in the context of the problem of causality in social theory. At least in Darwinian terms, the prevailing causal dualism — of intentional and mechanical causality — in the social sciences is found wanting. Once again, Veblen was the first economist to understand the implications for economics of Darwinism at this philosophical level. For Veblen, it was related to his notion of 'cumulative causation'. The article concludes with a discussion of the problems and potential of this Veblenian position. (shrink)

For several decades, economists have been preoccupied with an attempt to place their entire subject on the ‘sound microfoundations’ of general equilibrium theory, with its individualistic premises. However, this project has run into seemingly intractable problems. This essay examines underlying questions such as the appropriate building block of analysis and the structure of explanation in economics. The examination of biology is found to be instructive, due to debates concerning the limitations of reductionism within that discipline. The final part of the (...) paper argues for the autonomy of a non‐reductionist macroeconomics, based on the institution as the unit of analysis. (shrink)

I have been writing and publishing in economics for 50 years and much of my work has been debated and criticised. But I think that this is the first time that someone has honoured me by a full-scale article criticising an unpublished working paper. I am very grateful to Lynne Chester for bringing the questions I raise to a wider audience. The working paper that she criticizes went through several versions, of which the 12 July 2017 draft that Lynne downloaded (...) from the World Interdisciplinary Network for Institutional Research (WINIR) website is not the final version. In addition, the working paper has now expanded into a book entitled Is There a Future for Heterodox Economics? (Hodgson, 2019). Lynne's criticisms help me to attempt to make the text clearer and deal with some misunderstandings that have arisen... (shrink)

For Herbert Gintis, the “rational actor,” or “beliefs, preferences, and constraints (BPC),” model is central to his unifying framework for the behavioral sciences. It is not argued here that this model is refuted by evidence. Instead, this model relies ubiquitously on auxiliary assumptions, and is evacuated of much meaning when applied to both human and nonhuman organisms. An alternative perspective of “program-based behavior” is more consistent with evolutionary principles. (Published Online April 27 2007).

In Monetary Evolution, Free Banking, and Economic Order, Stephen Horwitz has provided an excellent review of the profound problems in the neoclassical theory of money and an important statement of the alternative Austrian?school approach. However, Horwitz's ?free banking? perspective rests on a false dichotomy between intervention and spontaneous order. In using the extreme case of an entirely undesigned evolutionary process to counter the equally extreme proposition that social order can be wholly designed, Horwitz loses sight of the messy world of (...) intermediate realities and possibilities. Even if money has strong spontaneous qualities, the state may play a vital role in the evolution of the financial system. (shrink)