Abstract
Although the institutional and evolutionary approach in economics is still not so common, it is gaining momentum, and a growing number of economic analyses are done in the light of the Darwinian method. It is especially important since we have learnt from the evolutionary psychologists the sources of our biases, which often undermine classical rationality (which is the foundational concept of homo oeconomicus), and since we have learnt from the cultural anthropologists how much culture is adaptive, how it evolves and how strong may it influence agents’ economic decisions. The paper’s main objectives are threefold: Firstly, it is to sketch the Darwinian approach to culture as the powerful human-environmental adaptation, which goes far beyond any biological adaptation and facilitates the development and expansion of our specie. This part of the paper will outline what culture is in the Darwinian approach, what cultural variants are, and how they are transmitted between people and generations. Secondly, to draw attention to not-so-rare byproducts of culture, which are maladaptive cultural variants. Maladaptations are well recognized in biology and are also widely discussed among anthropologists. They know the mechanism of their emergence and the causes of their sustainability. Cultural maladaptations in economics are rarely discussed. There seem to be at least two reasons for their neglect in economics: they are misdefined. Even evolutionary-oriented economists usually apply a mental shortcut, considering a welfare or utility function to reflect the fitness function. However, in the evolutionary approach, welfare has only a loose connection with fitness. The maladaptations are also interpreted in terms of the so-called “big-mistake hypothesis”, which assumes that most of our declines from classical rationality are due to the maladjustment of our stone-age cognitive system to the modern world. Respectively, the third objective of the paper is to propose how contemporary economics and public policy may benefit from anthropologists’ Darwinian analysis of culture and especially cultural maladaptations, based on two examples, one purely economic (hedge funds strategies imitations) and one socio-economic, i.e. the impact of the “tribal instinct” on the immigration policy.
JEL Codes : O10, O40, Z10.
Beginning of the article
Paraphrasing the famous evolutionary biologist Theodosius Dobzhansky, we may say that in social sciences (economics including), “nothing makes sense except in the light of evolution” (Dobzhansky 1973). It may sound like heresy for orthodox economists who are used to thinking in terms of rational economic agents and market equilibrium. Still, this is not for institutionalists, who at the very beginning emphasized the impact of “institutions” or “culture” on the market agents’ behaviour and their evolutionary origin (Veblen, Why is Economics not an Evolutionary Science?, 1898). If culture makes a difference in the economy, then the questions about its origin and mechanism of shaping and reshaping are not trivial. And if culture is a human product, it seems reasonable to apply the above-paraphrased maxim and analyze it in Darwin’s evolutionary theory.
There have been several attempts to do that so far, including prominent economists (Hayek 1983; Veblen 1994; Hodgson 1996; Boulding 1981). They were commonly convinced that culture matters and is a product of evolution, similar to biological evolution but with some peculiarities. Though, some of them emphasized rather the evolutionary shaped within-group collaboration and between-group rivalry, which led to the generally economically advantageous extended order (Hayek 1983), while others drew our attention to the within-group competition (pecuniary emulation), which brought about the waste of resources (Veblen 1994).
However, we owe the contemporary Darwinian analysis to cultural anthropologists who combined the best knowledge of the genetic evolutionary mechanism with qualitative and quantitative cultural studies and mathematical modelling…