How Can Institutional Economics Be an Evolutionary Science?

Abstract

The idea that Institutional Economics can and should be an evolutionary science based on biological models of evolution has a long pedigree among Original Institutional Economists, starting of course with Thorstein Veblen (1898).1 Among contemporary Original Institutional Economists, Geoffrey Hodgson has emerged as the leading advocate of this view (1993; 1995; 1996; 2004; 2005; and Hodgson and Knudsen 2006). His views have received support from Tony Lawson (2002). Hodgson has argued that Original Institutional Economics (OIE) can and should be a form of Darwinism, a term originally employed by Dawkins ([1982] 1999) and Dennett (1995). As Dawkins and Dennett originally used the term, it entailed a reductionist approach to biology, a philosophical commitment to an all encompassing materialism, and a strong reliance on the principle of inclusive fitness to explain animal behavior. Hodgson's use of the term, however, does not imply (at least for Hodgson) a commitment to these principles. Instead, he views Universal Darwinism as a meta-theoretical perspective that entails the principles of variation, inheritance and selection, regardless of what the principle of inheritance might entail. Thus, the ability of humans to transmit learned traits from one generation to the next through culture does not present a barrier to the application of Darwinian principles to the evolution of culture. At the same time, he argues that the study of cultural evolution requires the addition of specific, detailed mechanisms to explain culture change and reaffirms the importance of cultural emergence as a central principle for OIE and for the social sciences in general (Hodgson 2005; Hodgson and Knudsen 2006). Hodgson's advocacy of Universal Darwinism as a meta-theory leaves significant questions unanswered and requires extended discussion on several key points. My goal in this paper is to engage in this extended discussion and to point to numerous problems that arise with the use and application of the term Darwinism. I agree that Original Institutional Economics can and should be an