Evolutionary economics: Foundation of liberal economic philosophy

This is a schools brief style of introduction to evolutionary economics. It addresses the nature of evolutionary theory in relation to economics, and examines why evolutionary economists argue that market-capitalism is an evolutionary system. Finally, it argues that liberal economic philosophy has much stronger and more direct relationship with evolutionary economic analysis than neoclassical economic analysis.

An evolutionary economic perspective on technical change and adjustment in cane harvesting systems in the Australian sugar industry

Australian sugar-producing regions have differed in terms of the extent and rate of incorporation of new technology into harvesting systems. The Mackay sugar industry has lagged behind most other sugar-producing regions in this regard. The reasons for this are addressed by invoking an evolutionary economics perspective. The development of harvesting systems, and the role of technology in shaping them, is mapped and interpreted using the concept of path dependency. Key events in the evolution of harvesting systems are identified, which show how the past has shaped the regional development of harvesting systems. From an evolutionary economics perspective, the outcomes observed are the end result of a specific history.

Why is economics not a complex systems science?

The article argues that economics will have to become a complex systems science before economists can comfortably incorporate institutionalist and evolutionary economics into mainstream theory. The article compares the complex adaptive system of John Foster with that of standard economic theory and illustrates the difference through an examination of familiar production function. The place of neoclassical, Keynesian economics in complex systems is considered. The article concludes that convincing, multiple models have been made possible by the increase in widely available computing power available.

Knowledge and markets

An economy is a coordinated system of distributed knowledge. Economic evolution occurs as knowledge grows and the structure of the system changes. This paper is about the role of markets in this process. Traditionally, the theory of markets has not been a central feature of evolutionary economics. This seems to be due to the orthodox view of markets as information-processing mechanisms for finding equilibria. But in economic evolution markets are actually knowledge-structuring mechanisms. What then is the relation between knowledge, information, markets and mechanisms? I argue that an evolutionary theory of markets, in the manner of Loasby (1999), requires a clear formulation of these relations. I suggest that a conception of knowledge and markets in terms of a graphical theory of complex systems furnishes precisely this.

Interpreting social enterprises

Institutional and organizational variety is increasingly characterizing advanced economic systems. While traditional economic theories have focused almost exclusively on profit-maximizing (i.e., for-profit) enterprises and on publicly-owned organizations, the increasing relevance of non-profit organizations, and especially of social enterprises, requires scientists to reflect on a new comprehensive economic approach for explaining this organizational variety. This paper examines the main limitations of the orthodox and institutional theories and asserts the need for creating and testing a new theoretical framework, which considers the way in which diverse enterprises pursue their goals, the diverse motivations driving actors and organizations, and the different learning patterns and routines within organizations. The new analytical framework proposed in the paper draws upon recent developments in the theories of the firm, mainly of an evolutionary and behavioral kind. The firm is interpreted as a coordination mechanism of economic activity, and one whose objectives need not coincide with profit maximization. On the other hand, economic agents driven by motivational complexity and intrinsic, non-monetary motivation play a crucial role in forming firm activity over and above purely monetary and financial objectives. The new framework is thought to be particularly suitable to correctly interpret the emergence and role of nontraditional organizational and ownership forms that are not driven by the profit motive (non-profit organizations), mainly recognized in the legal forms of cooperative firms, non-profit organizations and social enterprises. A continuum of organizational forms ranging from profit making activities to public benefit activities, and encompassing mutual benefit organizations as its core constituent, is envisaged and discussed.

Analysis on firm innovation boundaries

Innovation has been widely recognized as an important driver of firm competitiveness, and the firm’s internal research and development (R&D) activities are often considered to have a critical role in innovation activities. Internal R&D is, however, not the source of innovation as firms may tap into knowledge necessary for innovation also through various types of sourcing agreements or by collaborating with other organizations. The objective of this study is to analyze the way firms go about organizing efficiently their innovation boundaries. Within this context, the analysis is focused, firstly, on the relation between innovation boundaries and firm innovation performance and, secondly, on the factors explaining innovation boundary organization. The innovation literature recognizes that the sources of innovation depend on the nature of technology but does not offer a sufficient tool for analyzing innovation boundary options and their efficiency. Thus, this study suggests incorporating insights from transaction cost economics (TCE) complemented with dynamic governance costs and benefits into the analysis. The thesis consists of two parts. The first part introduces the background of the study, research objectives, an overview of the empirical studies, and the general conclusions of the study. The second part is formed of five publications. The overall results firstly indicate that although the relation between firm innovation boundary options is partly industry sector-specific, the firm level search strategies and knowledge transfer capabilities are important for innovation performance independently of the sector. Secondly, the results show that the attributes suggested by TCE alone do not offer a sufficient explanation of innovation boundary selection, especially under conditions of high levels of (radical) uncertainty. Based on the results, the dynamic governance cost and benefit framework complements the static TCE when firm innovation boundaries are scrutinized.

A economia ecológica e evolucionária de Georgescu-Roegen

The ecological and evolutionary economics of Georgescu-Roegen. The main argument of this paper is that Georgescu-Roegen's contributions represent a major disruption with economics' pre-analytic vision. He rejected at the same time both the closed and circular view of the economy and the mechanic analogies that oriented economics in the past century. Even though his influence has been felt mainly in the field of ecological economics, his epistemological contributions represent a major challenge to equilibrium thinking. Nowadays, treating economic systems as complex and evolutionary systems is becoming not only acceptable, but also a trend in the way political economy is made. We defend that Georgescu-Roegen's disruption represents a scientific revolution in economics, in the sense attributed by Kuhn.

Foreign exchange reserves in India and China

Professor Irma Glicman Adelman, an Irish Economist working in California University at Berkely, in her research work on ‘Development Over Two Centuries’, which is published in the Journal of Evolutionary Economics, 1995, has identified that India, along with China, would be one of the largest economies in this 21st Century. She has stated that the period 1700 - 1820 is the period of Netherlands, the period 1820 - 1890 is the period of England the period 1890 - 2000 is the period of America and this 21st Century is the century of China and India. World Bank has also identified India as one of the leading players of this century after China. India will be third largest economy after USA and China. India will challenge the Global Economic Order in the next 15 years. India will overtake Italian economy in 2015, England economy in 2020, Japan economy in 2025 and USA economy in 2050 (China will overtake Japan economy in 2016 and USA economy in 2027). India has the following advantages compared with other economies. India is 4th largest GDP in the world in terms of Purchasing Power. India is third fastest growing economy in the world after China and Vietnam. Service sector contributes around 57% of GDP. The share of agriculture is around 17% and Manufacture is 16% in 2005 - 2006. This is a character of a developed country. Expected GDP growth rate is 10% shortly (It has come down from 9.2% in 2006 - 2007 to 6.2% during 2008 - 2009 due to recession. It is only a temporary phenomenon). India has $284 billion as Foreign Exchange Reserve as on today. India had just $1 billion as Foreign Exchange Reserve when it opened its economy in the year 1991. In this research paper an attempt has been made to study the two booming economies of the globe with respect to their foreign exchange reserves. This study mainly based on secondary data published by respective governments and various studies done on this area

Der Einfluss institutioneller Rahmenbedingungen auf die nationalen Innovationssysteme in Frankreich und Deutschland

Die Dissertation beschäftigt sich mit der komparativen Analyse der deutschen und französischen Innovationssysteme. Ausgehend von der evolutorisch-orientierten Innovationsforschung und der Institutionenökonomik werden die Akteure und deren Interaktionen in den jeweiligen institutionellen Rahmenbedingungen in beiden Innovationssystemen untersucht. Die Arbeit beleuchtet dieses Thema aus verschiedenen Perspektiven und zeichnet sich durch ein breites Methodenspektrum aus. Die Grenzen und Defizite des linearen Innovationsmodells werden aufgezeigt und für ein systemisches, interaktives Verständnis der Entstehung von Innovationen plädiert. Dieses interaktive Modell wird auf die Ebene des nationalen Innovationssystems transponiert, und damit wird der konzeptionelle Rahmen für die weitere Analyse geschaffen. Für die Gestaltung der Innovationssysteme wird die Bedeutung der institutionellen Konfigurationen betont, die von den Innovationsakteuren gewählt werden. Hierfür werden jeweils die Fallbeispiele Frankreich und Deutschland ausführlich untersucht und nach der gleichen Systematik empirisch betrachtet und schließlich werden beide Innovationssysteme systematisch verglichen. Dabei wird auch auf die Pfadabhängigkeiten in beiden Innovationssystemen eingegangen, sowie auf die Notwendigkeit der Berücksichtigung kultureller und historischer Eigenarten der verglichenen Länder. Expertengespräche mit deutschen und französischen Experten, ergänzen die zuvor erzielten Ergebnisse der Arbeit: Durch eine interdisziplinäre Herangehensweise werden politikwissenschaftliche und ökonomische Ansätze miteinander verknüpft, sowie kulturelle Eigenarten berücksichtigt, die Innovationssysteme beeinflussen können. In seinen Schlussfolgerungen kommt der Verfasser zu dem Ergebnis, dass „lernende Politik“ über institutionellen Wandel und Wissenstransfer ein wichtiger Faktor bei der Gestaltung hybrider Institutionen und der staatlichen Innovationspolitik von der „Missions- zur Diffusionsorientierung“ hin ist. Die Betrachtung zweier nationaler Systeme sowie deren Einbindung in internationale Kontexte führt zum Ergebnis, dass die Steuerung der Schnittstelle „Forschung-Industrie“, insbesondere die Rolle der Universitäten und Forschungseinrichtungen in heterogenen Kooperationspartnerschaften, über neue forschungs-und technologiepolitische Instrumente über transnationales Lernen von Institutionen geschehen kann. Dieser institutionelle Wandel wird als Lernprozess betrachtet, der im Übergang zur wissensbasierten Wirtschaft als “comparative institutional advantage“ ein wichtiger Faktor bei der Gestaltung der Institutionen und der staatlichen Technologiepolitik ist.