Informational selection & natural selection

Abstract

The Natural Selection Principle plays an important role in Darwinian evolution theory for the world of biology; its success and reasoning power have persuaded many people that there should be a similar principle for social, economic phenomena. After all, the current economy is a much faster evolutionary process. Unlike in the history of evolution where species appeared to be relatively stable-Darwin had to marshal much evidence to make his case-little need to argue that products, consumer tastes, social customs, firms, and prevailing economic institutions etc, are all evolving literally before our eyes, sometimes dramatically. What is of much debate among economists and other scholars is how to describe the economy as an evolutionary process. Attempts of slavishly mimicking the natural selection approach have been recently criticized by many. It is becoming clear that the economy, while sharing many similarities with biology, has many features like intentionality, institutions, etc that are unique for man-made processes. It seems futile to identify literally what is exactly the gene-like units and the transmission mechanism; it also appears fruitful to use Darwinian thinking to examine economic processes, not just to take it dogmatically. I shall examine the link between information and evolution closely below, and propose ’informational selection’ as a similar but alternative theory to Darwinian natural selection theory. We shall see that though there are many distinct features unique to economic and cultural processes, there are also many methodological similarities with natural selection. This paper is an outline of an ongoing work which more systematically studies the role information plays in economic evolution. For the limited space here I shall raise some salient points: how can agents in their economic transactions use limited information capabilities to cope with complex situations; how can agents’ information capabilities be boosted by technical progresses, especially be empowered by new information institutions; what if such capabilities are indeed boosted and what are the (evolutionary) consequences. Granting that the economy is an evolutionary process, should scholars just describe it as an inevitable natural phenomenon or is there something important for them to do proactively? Institutions regulating economic processes just passively adjust to the