Evolutionary Political Economy in Crisis Mode

Abstract

Summary This paper sets out to discuss recent economic developments from a twofold perspective. Both spotlights focus on the special role played by the current deep global crisis. The first line of argument centers on the history of economic ideas and shows how evolutionary economics has emerged as a promising alternative to mainstream neoclassical thought as well as to traditional Keynesian macroeconomics. The failure of standard macroeconomics to inform economic policy in the current situation shows that arguments of evolutionary political economists - from Malthus via Schumpeter to contemporary scholars - can and should substitute these inadequate models. The second part of the paper takes the argument for evolutionary political economy to a methodological level: The deep crisis of economic theory is necessarily also a crisis of the methodological apparatus used. Though evolutionary economics does not provide a welldefined alternative set of methods yet, it nevertheless seems to be the best foundation to build such a new combination, a methodological innovation, out of some of the most recent advances in formalization. These latter elements are briefly sketched.