What Is Evonomics?

Evonomics is a new online magazine that has made a big splash almost immediately. It is a product of David Sloan Wilson’s Evolution Institute, and the stated intention is to bring about a paradigm shift in economics through the introduction of evolutionary and systems thinking. What we have seen from it so far has been mostly attacks on “laissez faire” economics and “neoliberalism,” combined with an apparent desire to make Hayek more palatable to the left. From a rhetorical standpoint, this is good as it may manage to get some on the left to read Hayek — something which I think many in the Austrian school would more than welcome — but at the same time, many of the articles come off as clearly anti-Right (in the way they define “Right,” which includes such classical liberals as Larry Arnhart, Michael Shermer, and Matt Ridley), which would seem to undermine their stated goal of using evolution to transcend the left-right paradigm.

In “From Political Gridlock to Scientific Progress. The Promise of Evonomics,” David Sloan Wilson argues that economics needs to be made more scientific. He believes introducing evolution and complex systems theory to economics will make it more scientific, and quite frankly I would tend to agree. If we take Marx’s definition of science as showing us reality and ideology as being more justification, I think there is little question economics needs much more reality and much less justification. That can be done through evonomics, but will it be done through Evonomics?

Economics has a long history of taking the “latest science” and misapplying it to economics — what Hayek called “scientism” — so why should applying biological evolution and complex systems science to economics be any different? One answer is that evolutionary thinking itself was deeply influenced by economics — by the very economic thinking Wilson criticizes. Another answer is that what Peter Boettke refers to as “mainline” economic thinking (vs. “mainstream” economic thinking dominated by econometrics) is in the very tradition that gave rise to Darwin’s evolutionary thinking. To grossly oversimplify things, Adam Smith and Thomas Malthus influenced Darwin, and Darwin in turn (and in addition to the Smithian economic tradition as modified by Menger) influenced Hayek. If we take the other track of Evonomics — complex systems — we again see Hayek at the beginning of that tradition, influenced by early thinkers like Bertalanffy and Michael Polanyi, and himself laying the foundation for much complex systems thinking. Indeed, I spent most of two decades learning about evolution and complex systems from a physical and biological standpoint, and when I was introduced to Hayek, I found his ideas an easy fit into my world view. So it may be that by applying evolution and complex systems to understanding economics, we won’t be guilty of scientism. The wrong science — that of simple physical systems, leading to “equilibrium,” requiring a simplified Homo economus with perfect knowledge and perfect rationality for the models to work — being applied to economics is the problem. A model that starts from the bottom-up, contextualizes human action and motivations, and results in far-from-equilibrium, creative processes may be much closer to economic reality.

Rather than starting with an economic model and trying to fit humans into it, we could (and should) start with human beings and see what kind of model we can build from them. Start from the bottom-up, which is how economic systems (and evolutionary systems) themselves emerge anyway. We could start from human action, as does Ludwig Mises, or we could start from the brain itself, as does Hayek in The Sensory Order. I am guessing that most involved in Evonomics would prefer to start with the brain and human behavior, and thus with Hayek’s starting point. However, as Nathaniel Paxson and Nikolai Wenzel point out, if you start with Hayek’s theory of the brain (and/or with Vernon Smith’s experimental economics), you will nevertheless end with the logic of choice implied by Mises’ theory of purposeful human action. With Hayek, you get more contextualization, but in the end, you have very similar starting points for a bottom-up modeling of economics. It seems likely that any economics founded on evolutionary insights — including the degrees to which humans are influenced by emotions, social and cultural context, influence by others, etc. — will end up passing through the Misesian bottleneck of purposeful human action and the logic of choice. This person always already had no resemblance to Homo economus, which was a fiction developed by mainstream economists in the 20th century, who more often than not opposed the Austrian school’s approach to economics.

Based on the pieces which have come out so far, I am sure the authors who have so far written for Evonomics would be horrified at this conclusion. But if they truly are scientists and not ideologues, they should not be. Rather, they should welcome this insight if it is, in fact, properly scientific in nature. Are not the social sciences, including economics, sciences of human action? We can quibble about what is meant by “human action,” and the degree to which we need to understand motivations and the sources of those motivations to understand human action, but if in the end the social sciences are sciences of human action, there is nothing more scientific than starting from that point. The models that emerge are bound to be extremely complex, which is why we need complexity science to help us understand the natures of the social systems which emerge. And they are going to evolve, and be influenced by our own evolved psychologies. Which is why we also need evolution to help us understand these systems. But these are facts which Hayek himself understood, and on which he based his own writings. Wilson clearly understands this, which is why he keeps returning to Hayek, despite his reservations in doing so.

I see in Evonomics a real opportunity for those interested in developing a new paradigm in economics based on evolution and complex systems theory. The work done by economists associated with the Santa Fe Institute ought to be of interest to Austrians school economists precisely because, as I understand the work they are doing, it more often than not supports Austrian insights. We even have Stuart Kauffman working with Roger Koppl as Kauffman, at least, moves more and more toward the Austrian school. And he is moving in that direction precisely because the Austrians were there first.

As we know from chaos theory, complex systems are sensitive to initial conditions and result in path dependency. If we don’t want Evonomics to become a mere apologist for leftist political action under the guise of science, it is important that we do not just engage the writers over at Evonomics, but seek to participate on their very platform. That is why I have become involved with Evonomics as an advisor. And that is why I invite those interested in the application of evolution and complex systems theory, whether in the Hayekian tradition or not, to become involved as well. Science or ideology at Evonomics? The choice is ours.

Bibliography

Boettke, Peter. (2011) “Mainline vs. Mainstream Economics, And the Question of Moral Philosophy.” Coordination Problem. January 25, 2011. Blog http://www.coordinationproblem.org/2011/01/mainline-versus-mainstream-economics-and-the-questions-of-moral-philosophy.html

Hayek, F.A. (1952) The Sensory Order. The University of Chicago Press

Paxson, Nathaniel and Nikolai G. Wenzel (2014) “Praxeology, Experimental Economics and the Process of Choice: F.A. Hayek and Vernon Smith on the Misesian Action Axiom.” The Review of Austrian Economics. 15 July 2014, p 1–14

Mises, Ludwig von. (1949/1966) Human Action. San Francisco: Fox & Wilkes

Wilson, David Sloan. (2015) “From Political Gridlock to Scientific Progress. The Promise of Evonomics.” Evonomics. http://evonomics.com/from-political-gridlock-to-scientific-progress-the-promise-of-evonomics/