Foundations of Evolutionary Economics, Chapter Five: Networks

Abstract

This is an entirely new draft of the fifth chapter of my book “Foundations of Evolutionary Economics” which is going to be published by Edward Elgar in due course. With permission of the publisher, the draft chapters are posted on the web to facilitate academic discussion for further improvement. Previous versions have been removed from the SSRN site.Chapter Five builds on the theory of the individual in specifying structures of distributed cognition as network configurations. Networks are bimodal, i.e. operate in the matterenergy and the semeiotic mode, which implies that human networks consist of individuals and artefacts (signs). More specifically, networks operate in the three dimensions of transaction, communication and perception. Network configurations can be classified into small groups, tribes and large groups, reflecting constraints on human cognitive capacities, leveraged by artefacts. Network configurations determine information flows in networks, such as when status shapes pattern of imitation. I develop a concept of transactional capabilities in terms of network embeddedness, relative to functions. Finally, the directedness of network evolution is scrutinized in the light of complexity science, which allows to put network theory into the context of the general approach to evolution and entropy that was developed in the previous chapters.