David Sloan Wilson — The Search for a Better Economics. Part II of My Journey

David Sloan Wilson meets Elinor Ostrom. Elinor Ostrom has the unique distinction of being awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel although she was not an economist.

The reaction to Elinor Ostrom as the recipient of the 2009 Nobel Prize in economics (along with Oliver Williamson, who also studies how decisions are made outside markets) spoke volumes about the field of economics.… 

Evonomics
The Search for a Better Economics. Part II of My Journey
David Sloan Wilson | SUNY Distinguished Professor of Biology and Anthropology at Binghamton University and Arne Næss Chair in Global Justice and the Environment at the University of Oslo

Derek Wall — What Elinor Ostrum taught: democratic control is not only possible, it's normal

The market fundamentalism of Hayek seems to dominate political discourse. Hayek, the liberal free market Austrian economists, argued that state planning would end in failure and only the market could promote economic efficiency. This agenda seems, since Thatcher and Reagan, to have swept the world but it is, of course false. Neo-liberals far from reducing state intervention use the state to support corporations. Privatization is about helping powerful firms and market competition is no longer an issue. A good example is the current transformation of the NHS into a cash cow for Virgin and US health corporations. Neo-liberals promote corporate welfare and monopoly. Elinor Ostrom is powerful ally for all those of us who want to challenge that neo-liberal dogma and create people centred cooperative economics. 

Elinor Ostrom, who sadly died in 2012, was the first and so far only women to win a Nobel Prize, strictly speaking the Swedish bank prize, for economics. She was awarded it for her work on commons, collective resources and collective communal property. If we want a practical alternative (s) to privatisation she helps in a number of ways.…

Open Democracy
What Elinor Ostrum taught: democratic control is not only possible, it's normal
Derek Wall | International Coordinator of the Green Party of England and Wales. He is a political economist, whose last book was ‘The Sustainable Economics of Elinor Ostrom’ Routledge 2014. He is married to the community musician Emily Blyth and is a founder of Green Left, the anti-capitalist network in the Green Party. He is also a columnist with the Morning Star and is completing his new book for Pluto ‘The Economics of anti-capitalism’ which will be published in 2015.

Tim Harford — Do You Believe in Sharing?

Tim Harford deftly explains Garrett Hardin's The Tragedy of the Commons and Elinor Ostrum's Beyond the Tragedy of the Commons. Good summary of the issues and proposals. Ostum offers a way to escape the dilemma of relying on hierarchical government and privatization to solve environmental issues by relying instead on communalism in dealing with the commons.

The Undercover Economist
Do You Believe in Sharing?
Tim Harford | The Financial Times

(John Zelnicker in the comments)

Margaret Flowers and Kevin Zeese — Building the Commons as an Antidote to the Predatory Market Economy

Communalism versus neoliberalism. "The tragedy of the commons" is the idea that anything not privatized is not being utilized as efficiently and efectively as it could be if privatized, so that left to itself the commons deteriorates due to overuse and poor management. Libertarian anarcho-capitalists even recommend ocean privatization.

In recent years, the case for "The Tragedy" has been rebutted by Nobel Prize-winning economist Elinor Ostrum, who wrote "Beyond the Tragedy of the Commons." Ostrum examined how commons were actually used. She found that the so-called tragedy of the commons was not prevalent, nor was it difficult to solve. Indeed, people from local communities routinely develop controls over the commons to protect it from "the tragedy." In 1990, she wrote, "Governing the Commons," which examined the governance of natural resources. She found that neither state control nor privatization of resources was the appropriate answer and that commons are sometimes governed by voluntary organizations. She developed eight "design principles" of stable local management of commons. These are:

1. Clearly defined boundaries.
2. Rules regarding the appropriation and provision of common resources that are adapted to local conditions.
3. Collective-choice arrangements that allow most resource appropriators to participate in the decision-making process.
4. Effective monitoring by those who are part of or accountable to the appropriators.
5. A scale of graduated sanctions for those who violate community rules.
6. Mechanisms of conflict resolution that are cheap and of easy access.
7. Self-determination of the community recognized by higher-level authorities.
8. In the case of larger commons resources, organization in the form of multiple layers situated inside one another, like Russian nesting dolls.

These have been refined to include additional principles, e.g. effective communication, internal trust and reciprocity, and making connections between the various parts of the resource system as a whole.

The real tragedy of the commons is enclosure, which is what privatization used to be called. Marx called it "primitive accumulation" and observed that it is the origin of feudalism (landlordism with emphasis on "lord")) and capitalism (ownership of the means of production by a privileged class). Marx disputed Adam Smith's imagined narrative of the original enclosure arising spontaneously as hard workers utilize available resources, while slackers goofed off. Marx pointed to history, which is the record of powerful interests appropriating the commons by force, creating a privileged class of have's and a class of have-not's that whose existence was to serve the privileged class with their labor in order to use what had previously been held in common. This with their fellow countrymen. And with the rise of colonialism the process was even more brutal to the point of genocide in some places, for example, in America, when the native population resisted.

Truthout | Opinion
Building the Commons as an Antidote to the Predatory Market Economy
Margaret Flowers and Kevin Zeese

David Sloan Wilson — A good social Darwinism [and much more]

Evolution has changed all we know about how humans behave, compete and co-operate. When will economics catch up?

Shreds neoclassical assumptions.

Aeon
A good social Darwinism
David Sloan Wilson | Distinguished Professor of Biological Sciences and Anthropology, Binghamton University
(h/t Gavin Kennedy at Adam Smith's Lost Legacy)

Links at the bottom of the article leads links to limited time (six months) download of papers from the Journal Of Economic Behavior & Organization and This View of Life. Here is the lead in from This View of Life:

Q: How many economists does it take to screw in a light bulb?

A: Zero. The invisible hand will do it.

Making jokes about economics is fun and easy. The field’s nickname is the ‘dismal science’. Type ‘economic jokes’ into Google and you will see 19.5 million hits, far more than other fields, and almost as many as for political jokes. Economics is the field that people love to hate.

Improving economics is much harder than making jokes. In a special issue of the Journal of Economic Behavior and Organization, more than two dozen scholars from around the world have written 13 articles with the important and difficult goal of making economics better.
The title of the special issue is “Evolution as a General Theoretical Framework for Economics and Public Policy.” This is a relatively novel approach and deserves some discussion.

The standard economic paradigm is the neoclassical model. People know what makes them happy and are good at making decisions to accomplish their goals. Furthermore, neoclassical theory has been used to support free market policies by arguing that self-interested, rational actors lead to ‘optimal’ social outcomes, when optimal is defined in a particular way 

“People are rational and greed is good” would be a lay summary of neoclassical economics.

Just reading that sentence probably makes many people’s blood boil. The list of critics of neoclassical economic is long and distinguished. Within the citadels of economic power, however, only one critique has made significant inroads. This successful critique is the behavioral economic field founded by Daniel Kahneman, Amos Tversky, and most forcefully advanced by Professor Richard Thaler of the University of Chicago.

Professor Thaler sums up behavioral economics by saying that people are ‘nicer and dumber’ than economists assume.

The authors of the special issue of JEBO believe that evolutionary theory is required to improve economics. In 1973, the famous biologist Theodosius Dobzhansky, wrote, “Seen in the light of evolution, biology is, perhaps, intellectually the most satisfying and inspiring science. Without that light it becomes a pile of sundry facts-some of them interesting or curious but making no meaningful picture as a whole.”

Paraphrasing Dobzhanksy, we, the authors of these articles on economics and evolution, argue that economics without evolution is a pile of sundry facts-some of them interesting or curious but making no meaningful picture as a whole.

Furthermore, these articles go beyond criticism to specific areas. In many cases, the authors have devoted decades to these topics, and are recognized global leaders. The techniques range from theoretical to experimental to simulation. The species covered include humans, non-human primates, and many other animals.

In order to make the issue accessible, This View of Life is pleased to provide short summaries of each article that link to the full-length articles, which the Evolution Institute has paid to make free online for a period of six months.

JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION SPECIAL ISSUE

“Evolution as a General Theoretical Framework for Economics and Public Policy,” Special issue editors: David Sloan Wilson, John M. Gowdy, J. Barkley Rosser



This supplementary issue of the Journal of Economic Behavior and Organization is based on a collaborative project between the Evolution Institute and the National Evolutionary Synthesis Center that started in 2009 with a NESCent catalysis meeting titled “The Nature of Regulation: How Evolution Can Inform the Regulation of Large-scale Human Social Interactions”. The meeting led to a 2-year project on integrating economic and evolutionary theory. This project used NESCent’s working group rubric to organize three workshops, whose participants were drawn from a larger advisory group. Other outputs of the project include a white paper submitted to the National Science Foundation and a final workshop titled“The Science-to-Narrative Chain”, which examines how to create a new public narrative based on the evolutionary paradigm.

Supplemental material can also be found at our online magazine: This View of Life

1)Wilson, D. S., Gowdy, J, Rosser, B. Jr. (2013). Rethinking Economics from an Evolutionary Perspective. An Editorial

2) Wilson, D. S., & Gowdy, J. (2013). Evolution as a General Theoretical Framework for Economics and Public Policy.

Role in issue: First lead article. Describes how evolution functions as a general theoretical framework in the biological sciences and considers four reasons why evolution might not add value to the study of human-related subjects.

3) Gowdy, J., Dollimore, D., Witt, U., & Wilson, D. S. (2013). Economic Cosmology and the Evolutionary Challenge.

Role in issue: Second lead article. Describes how modern disciplines such as economics and evolution reflect ancient cosmologies and how advances in evolutionary science can help economics overcome some of its outdated assumptions.

4) Wilson, D. S., Ostrom, E., & Cox, M. (2013). Generalizing the Core Design Principles for the Efficacy of Groups.

Role in issue: Shows how the design principles for the efficacy of common-pool resource groups, for which Ostrom received the Nobel Prize in economics in 2009, can be generalized from an evolutionary perspective and used as a practical framework for improving the efficacy of real-world groups. Also serves as a tutorial for multilevel selection theory, which plays an important role in some of the other articles.

5) Witt, U., & Schwesinger, G. (2013). Phylogenetic footprints in organizational behavior.

Role in issue: Explains modern social organizations, including firms, as a product of biocultural co-evolution. The authors have backgrounds in economics, nicely complementing the article by Stoelhorst and Richerson.

6) Stoelhorst, J. W., & Richerson, P. J. (2013). A Naturalistic Theory of Economic Organizations.

Role in issue: Explains modern social organizations, including firms, as a product of biocultural co-evolution. The first author has a business school background and the second author is one of the major figures in cultural evolutionary theory, nicely complementing the article by Witt and Schwesinger

7) Manapat, M., Nowak, M., & Rand, D. (2003). Information, Irrationality and the Evolution of Trust.

Role in issue: Focuses on the important topic of trust and illustrates the role of analytical models in evolutionary science relevant to economics and public policy.

8) Wilson, J., Yan, L., & Hill, J. (2013). Costly information and the Evolution of Self-organization in a Small, Complex, Economy.

Role in issue: Describes a real-world application of the evolutionary perspective to an economic system and illustrates the role of computer simulation modeling from an evolutionary and complex systems perspective.

9) Gowdy, J., Rosser, B. Jr. & Roy, L. (2013). The Evolution of Hyperbolic Discounting: Implications for Truly Social Valuation of the Future.

Role in issue: Addresses a fundamental topic in economics and public policy from an integrated ultimate and proximate evolutionary perspective.

10) DeAngelo, G., & Brosnan, S. (2013). The Importance of Risk Tolerance and Knowledge when Considering the Evolution of Inequity Responses Across the Primates.

Role in issue: Focuses on the important subject of inequity responses and illustrates the importance of cross-species comparison, which is novel for much of the economic and policy literatures.

11) Burnham, T. (2013). Caveman Economics: Toward a neo-Darwinian Synthesis of Neoclassical and Behavioral Economics.

Role in issue: Focuses on the concept of mismatch, whereby genetic and cultural adaptations to previous environments become dysfunctional in current environments.

12) Johnson, D., Price, M., & Van Vugt, M. (2013). Darwin’s Invisible Hand: The Evolution of the Market Competition, Evolution, and the Firm.

Role in issue: Applies multilevel selection theory to the selection of behavioral and organizational practices within and among firms, reaching a different set of conclusions than standard economic views of the firm.

13) Mullins, D.A., Whitehouse, H. & Atkinson, Q. D., (2013). The Role of Writing and Record Keeping in the Cultural Evolution of Human Cooperation.

Role in issue: Takes a long-term cultural evolutionary view on the structure of human social organizations as corporate units, with implications for current and future organizations.

14) Biglan, A., & Cody, C. (2013). Integrating the Human Sciences to Evolve Effective Policies.

Role in issue: Reviews the fields of public health, prevention science and applied behavioral analysis, which have a proven ability change behavioral and cultural practices in individuals, small groups, and large populations. Also emphasizes the importance of prosociality for promoting human welfare at all scales, which stands in contrast to the individual focus of orthodox economic theory. This article is important to underscore the fact that evolution functions as a general theoretical framework for all forms of policy, not just economics.

And a reminder that David Sloan Wilson wrote a thirteen part series on evolution and economics, "Economics and Evolution as Different Paradigms" Series.

Evolutionary theory and evolutionary economics promise to be a large chunk of the emerging new paradigm of economics, along with monetary economics, energy economics, environmental economics, and ecological economics, along with the life and social sciences. Mechanism will be replaced by organicism, and atomism by general system theory, of which economist Kenneth Boulding was a founding developer and laid the groundwork.