Routines, Economic Selection and Economic Evolution: Critique and Possibilities

Abstract

This paper discusses the role of routines and economic selection as core elements of Nelson and Winter's evolutionary theory of economic change. This is used to illustrate some shortcomings of an evolutionary theory of economics. The paper starts by analyzing the debate between Alchian, Penrose and Friedman on the role of evolutionary concepts in economics. This debate triggered Winter's work on the issue. Afterwards, the evolution of Winter's and Nelson arguments is presented. This is followed by a discussion of their main concepts and the critique it has given rise to. Particularly, it is argued that the role of routines need to be adjusted to that of a transmission mechanism between the cognitive realm and human action.

Keywords: routines, innovation, industry, evolutionary economics, replicator, mental representation, psychology, Nelson and Winter critique