Evolutionary economics

[1][5] The processes in turn emerge from the actions of diverse agents with bounded rationality who may learn from experience and interactions and whose differences contribute to the change.

This concept was not exclusive to the Greek and Roman civilizations (see, for instance, Yuga Cycles in Hinduism, the Three Ages of Buddhism, Aztecs’ Five Suns), but a common feature is the path towards misery and destruction, with technological advancements accompanied by moral degradation.

Medieval views on society, economics and politics (at least in Europe and Pax Islamica) were influenced by religious norms and traditions.

Due to these numerous desires and the scarcity of resources, the natural state of a human is a war of all against all:[13] "In such condition, there is no place for Industry; because the fruit thereof is uncertain; and consequently no Culture of the Earth; no Navigation, nor use of the commodities that may be imported by Sea; no commodious Building; no Instruments of moving, and removing such things as require much force; no Knowledge of the face of the Earth; no account of Time; no Arts; no Letters; no Society; and which is worst of all, continual feare, and danger of violent death; And the life of man, solitary, poore, nasty, brutish, and short.

[1] Veblen saw the need for taking into account cultural variation in his economic approach; no universal "human nature" could possibly be invoked to explain the variety of norms and behaviours that the new science of anthropology showed to be the rule rather than an exception.

[2][22] Another prominent economist, Friedrich von Hayek, also employed the elements of the evolutionary approach, especially criticizing “the fatal conceit” of socialists who believed they could and should design a new society while disregarding human nature.

[1] There were other notable contributors to the evolutionary approach in economics, such as Armen Alchian, who argued that, faced with uncertainty and incomplete information, firms adapt to the environment instead of pursuing profit maximization.

[26] Since then, evolutionary economics, as noted by Nicolai Foss, has been concerned with “the transformation of already existing structures and the emergence and possible spread of novelties.”[27] Economies have been viewed as a complex system, a result of causal interactions (non-linear and chaotic) between different agents and entities with varied characteristics.

By the 1990s, as put by Geoffrey Hodgson,[1] “it was possible to write of an international network or ‘invisible college’ of ‘evolutionary economists’ who, despite their analytical differences, were focusing on the problem of analyzing structural, technological, cultural and institutional change in economic systems… They were also united by their common dislike of the static and equilibrium approaches that dominated mainstream economics.”The role of evolutionary forces in the process of economic development over the course of human history has been further explored during the past decades.

For example, Paul Rubin extensively described how apparent anomalies in decision-making, such as violations of the maximization principle, a zero-sum way of thinking, or a dislike of competition and free trade, may be a result of the human brain evolution.

[33][34] This hypothesis does not deny that efficient financial market equilibria may exist, but it necessarily suggests that other states may emerge and evolve due to adaption and natural selection.

After that, an economy would move into a new phase characterised by demographic transition (given that investment into less children, although more costly, would yield higher returns) and sustained economic growth.

Meanwhile, Qualy households bear on average only two children each, because their budget does not allow them to invest in the education and health of additional offspring [sic!

Within a generation or two, its families are likely to enjoy higher incomes and amass greater resources.”The emergence of modern evolutionary economics was welcomed by the critics of the neoclassical mainstream.