Generalized Darwinism From the Bottom Up: An Evolutionary View of Socio-Economic Behavior and Organization

Abstract

Institutional and evolutionary economists have recognized that organizations are social as well as economic entities, but in modern evolutionary theories of the firm the social aspect of economic organization is typically lost. This is a result of the fact that these theories take the existence of firms as given, focus on the explanation of market and industry level phenomena, and in doing so use notions such as routines to abstract from individual behavior within the firm. This paper takes another approach and reasons from the bottom up. It is argued that for both historical and ontological reasons, individual behavior should be seen as the starting point of theorizing about socio-economic organization. An evolutionary view of individual behavior that recognizes the social aspect of economic organization would see individuals as competing in a socio-economic environment, with their success depending on their socio-economic fitness. But what is socio-economic fitness? A concept of socio-economic fitness implies social as well as economic selection pressures, but what is the nature of these pressures? And is adaptation to socio-economic pressures not an ontogenetic rather than a phylogenetic process that defies explanation in terms of the population logic of evolutionary theories? The purpose of this paper is to answer these questions by applying Generalized Darwinism to the analysis of socio-economic behavior and organization. Its intended contributions are threefold. First, the paper presents an argument for the importance of building theories of socio-economic organization on an evolutionary understanding of what drives individual behavior. Second, the paper demonstrates how Darwinism can be used to understand the evolution of individual behaviors in socio-economic contexts. Third, the paper shows how such an understanding can be used to advance evolutionary theories of economic organization.

Keywords: Generalized Darwinism, Evolutionary theory, Evolutionary economics, Theory of the firm, Behavioral foundations

JEL Classification: B25, B41, D00