Home > Behavioral Econ. > Economic emergence: an evolutionary economic perspective

Economic emergence: an evolutionary economic perspective

Economic emergence: an evolutionary economic perspective

Journal of Economic Behavior & Organization
Received 11 February 2011; revised 29 August 2011; Accepted 19 September 2011. Available online 24 September 2011.

John Fostera, J. Stan Metcalfe

The standard neoclassical approach to economic theorizing excludes, by definition, economic emergence and the related phenomenon of entrepreneurship. We explore how the most economic of human behaviours, entrepreneurship, came to be largely excluded from mainstream economic theory. In contrast, we report that evolutionary economists have acknowledged the importance of understanding emergence and we explore the advances that have been made in this regard. We go on to argue that evolutionary economics can make further progress by taking a more ‘naturalistic’ approach to economic evolution. This requires that economic analysis be fully embedded in complex economic system theory and that associated understandings as to how humans react to states of uncertainty be explicitly dealt with. We argue that ‘knowledge,’ because of the existence of uncertainty is, to a large degree ‘conjectural’ and, thus, is closely linked to our emotional states. Our economic behaviour is also influenced by the reality that we, and the systems that we create, are dissipative structures. Thus, we introduce the notions of ‘energy gradients’ and ‘knowledge gradients’ as essential concepts in understanding economic emergence and resultant economic growth.

Keywords: Biological analogy; bounded rationality; complex system; constrained optimization; dissipative structure; economic emergence; economic growth; emotions; energy economics; evolutionary economics; entrepreneurship; innovation; institutional change; knowledge; micro-meso-macro; organizational change; rationality; self organization; technological change; uncertainty


Categories: Behavioral Econ.
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