The evolutionary foundations of economics is a somewhat misleading title. With the exception of Geoffrey M. Hodgson's paper, which discusses the strained relation between biology and the social sciences (and economics in particular) in the twentieth century, the papers do not address the evolutionary foundations of economics. Instead, most of the papers argue or even take for granted that what at bottom is wrong with mainstream (or ‘orthodox’) economics is that its foundations are non-evolutionary. It is argued that replacing these non-evolutionary foundations by evolutionary ones is the way to go for economics. Sidney G. Winter's paper is a clear case in point. After presenting a brief historical overview of non-evolutionary production theory, Winter goes on to sketch the broad outlines of an alternative and potentially superior evolutionary theory of production, in which notions such as organizational routines and replication take centre stage. Most papers discuss what form a replacement of non-evolutionary by evolutionary theories should take and what its implications are for particular research areas and for particular research questions in economics. As such they can be regarded as contributions to evolutionary economics, the school in economic thought that was pioneered by Nelson and Winter's An evolutionary theory of economic change (1982). Thus, though perhaps less appealing to a wide readership, ‘The Foundations of Evolutionary Economics’ would have done more justice to the contents of the book.

What seems to unite most of the various contributions to the ongoing project of evolutionary economics are the beliefs, first, that economics is dominated by the equilibrium-mechanical approach and, second, that this approach should be superseded by an evolutionary-biological one. The equilibrium-mechanical approach is not only believed to be poor in addressing problems that traditionally are central to theoretical economics (such as the persistence of business cycles and the diversity in developing the division of labor; as Ping Chen argues in the book). It is held to be especially ill-suited for coming to grips with the incessant influx of novel innovations in processes of technological change. Entrepreneurial creativity, which is so much stressed by Schumpeter and other Austrians, is taken to be a key factor in continuously dislodging the economic system out of equilibrium. The emphasis put on this factor joined with the belief that static equilibrium concepts are unable to account for this is one of the things that sets evolutionary economics apart from evolutionary game theory. When economists think of present-day economics as having evolutionary foundations, evolutionary game theory presumably is what first comes to mind. Static equilibrium concepts (such as the evolutionarily stable strategy and the stochastically stable equilibrium) loom large in evolutionary game theory and this is probably why most contributors to the book under review hold that evolutionary game theory is not of much use for their purposes. What is somewhat strange, however, is that some of them do seem to believe that the particular type of evolutionary dynamic often posited in evolutionary game theory, the replicator dynamic, is a useful starting point for studying evolutionary processes. Evolutionary game theory might thus not always be as widely off the mark for at least some of the purposes of the evolutionary economists as their rhetoric suggests.

Beyond the agreement that the equilibrium-mechanical approach has to give way to an evolutionary-biological one in economics, differences and disagreements among the contributors to the book seem to reign. To start with, there is no agreement on what the evolutionary-biological approach, the approach that is to supersede the prevailing equilibrium-mechanical approach in economics, is. An issue preoccupying several contributions is whether or not invoking biological analogies and metaphors is admissible in economics. The evolutionary economic theory developed by Nelson and Winter clearly is based on biological analogies (although it was emphatically denied by them that they pursued biological analogies for their own sake; it was better economic theory they were after and they were happy to drop or modify elements from biology that did not serve that purpose (Nelson and Winter Reference Nelson and Winter1982: 11). Nelson and Winter argue that a selection mechanism comparable to natural selection in biological evolution is at work in competitive markets, for example. And they liken the functions that routines of firms have to those that genes have in biological evolution. Just as genes both instruct behaviour and are replicated in biological evolution, routines are argued to determine a large part of firm behavior and to display a certain degree of inertia over time in economic evolution. Although not all contributors find fault in these particular views, all seem to concur in the view that evolutionary economics should move beyond biological analogies and metaphors. The wish to base evolutionary economics on things other than biological analogies is understandable. Building on biological analogies runs the risk of to taking elements or connotations from biology or from evolutionary theory on board that do not fit the subject matter of economics. Comparing the routines of firms with the genes of organisms, for example, seems to bring along the (misguided, according to many) idea that routines are unalterable and that routines fully determine firm behaviour. As Witt argues in his contribution, for example, it downplays the important roles of insight, intentionality, and entrepreneurship in economic life.

Others are more in agreement with the particular suppositions that Nelson and Winter laid down for evolutionary economics. Yet they too emphatically deny that it is biological analogies that evolutionary economics should be based on. How can this be? The nub, it seems, is to argue that although it is true that concepts such as selection and replication originated in biology, there is nothing in these concepts that confines their application to biological evolution. Taken at a sufficiently high level of abstraction, the content of these concepts need not be specific to the biological domain. Thus Metcalfe argues that it is a matter of general evolutionary logic, not of biological analogy, that evolutionary economics should be built on the fundamental concepts of variety, selection, and development. Likewise, the slightly different list of ‘Darwinian propositions’ (variety, mutation, adaptation, selection, retention) that editor Kurt Dopfer comes up with in his lengthy Prolegomenon are presented as being ontological rather than analogical in nature. The idea here also seems to be that the items in the list characterize key elements in all Darwinian evolutionary processes, and not just biological evolutionary processes. Recent pleas for Universal (or Generalized) Darwinism (Hodgson and Knudsen Reference Hodgson and Knudsen2004), which take blind variation and selective retention as the central abstract formula of Darwinism, are based on the same idea. I do not deny that ideas like these might well be true, although it still remains to be seen whether such abstract characterizations of Darwinian principles will prove to be fruitful for studying processes of economic change. But would their truth make the use of abstract generalizations of Darwinian principles non-metaphorical? I fail to see why. After all, nobody denies that these principles first arose in biology and are now transferred (in an abstract form) to economics. And that is all that is implied in calling them metaphors.

Several contributors argue that Darwinian selection models are the wrong horse to bet on in evolutionary economics. There is a lot of talk in the book about non-equilibrium-based approaches, related for example to synergetics (in the contribution of Haken), complex system theory (Allen), non-linear dynamics and path dependence (David) and especially self-organization (Prigogine, Chen, Foster). Here too we find the inclination to stress that these are not based on ‘mere’ analogies (physical, chemical, biological, or otherwise). Haken argues that “the application of synergetic principles to processes in economics is not based on analogies to physics but on results from mathematical relationships” (p. 77). Similarly, Foster argues that the self-organization approach is “not used as an analogy or metaphor; the self-organization process is present at all levels of scientific enquiry” (p. 367). The idea here seems to be once again that the principles and approach advocated are (“literally”) true of processes both in physics and in economics and that therefore their use in economics is not analogical or metaphorical. No such inference seems to be warranted, however. A theory based on metaphorical transfer can be (“literally”) true in the domain to which it is transferred. In order to establish that the use of synergetic principles and the self-organization approach in economics can yield profound and deep new insights, it is not necessary to deny that their use is analogical or metaphorical. The fact that such principles and approaches originated elsewhere and are transferred to economics does not imply that the insights obtained in economics can be only superficial or facile.

This is not to say that it is impossible to forge truly non-analogical or non-metaphorical relations between biological evolution and economics. In the book some do actually forge such relations. Silverberg and Verspagen argue that economic evolution can fruitfully be seen as part of a larger, more comprehensive evolutionary process of which biological evolution is also part. The fact that processes of economic evolution are constrained by specific features of their realization at any point in time does not diminish that they are subject to the same underlying laws all evolutionary processes are subject to (such as the second law of thermodynamics). Where Silverberg and Verspagen thus emphasize that current economic processes cannot subdue certain ‘natural’ laws, Simon (and also Dopfer in his Prolegomenon) stresses that current economic processes build upon past processes of biological evolution. Past processes of biological evolution have a direct influence upon the operation of the economy, Simon argues, because at least some of the behavioral characteristics of the individual actors in the economy are shaped in past processes of biological evolution. Current economic behavior and current cultural processes are made possible by past processes of biological evolution and still bear the stamp of them. Since Nelson and Winter-type evolutionary economics is wedded to the belief that it is fruitful to conceive of economic change in terms of ongoing economic evolutionary processes and that Simon's paper does not reflect this belief but focuses on past biological evolutionary processes, Simon's paper is exceptional in the book in that it is not (and is also not meant to be) a contribution to evolutionary economics.

Differences abound also in the sorts of endeavor that the papers present. Some papers, such as the ones of Ilya Prigogine and Hermann Haken, barely touch on economics. They present interesting introductions to and overviews of theories such as that of self-organization, of dissipative structures and of synergetics in chemistry and physics. But the links forged here with economics seem to be more like afterthoughts, rather than being developed in a serious confrontation with economics as an established, separate discipline of its own. Of the papers that do seriously engage with economics some seem to be primarily engaged in promoting some pre-conceived view or approach among economists, while others are more of a probing and explorative kind. This difference can be seen clearly in the part on “Evolutionary history.” Whereas Paul A. David once again explicates his notion of path-dependence (and the implications it has for policy analysis) in a plea to reorient economics towards “historical economics,” Joel Mokyr carefully explores the useful, but limited services that evolutionary theory (selection models in particular) can render to economic history.

Given all the diversity and variety in the book, it is a bit surprising that in a truly impressive tour de force editor Kurt Dopfer tries to accommodate all contributions (and much more) in a sketch of a new paradigm of evolutionary economics. I am not so sure that Dopfer's heroic attempt at reconciliation succeeds. It is perhaps telling that although Foster explicitly speaks against Hermann Haken's “science of synergetics” (380), Dopfer suggests that Foster's model is germane to Haken's synergy model (47). It is not entirely clear to me either what crucial notions in Dopfer's Prolegomenon mean and imply. One such notion is that of a rule. Rules (and their ‘carriers’) are the units that evolve in Dopfer's version of evolutionary economics. As far as I can see, however, what a rule is, what sorts of rule there are, and how rules are related to behavior is nowhere properly explicated. What we get is a very abstract definition of a rule (as a deductive schema that allows for operations) and the claim that man (Homo sapiens economicus) is a rule-making and rule-using animal. Does this mean that all human behavior is taken to be rule-based (or rule-guided)? Is rule-making itself based on rules? Is rule-breaking entrepreneurial creativity not rule-based? This we are not told. Likewise, even after rereading the Prolegomenon several times I still do not know what the meso-level of analysis is and how exactly meso relates to micro and macro in Dopfer's account. These obscurities make it hard to assess the merits of Dopfer's grand synthesis. Anyway, rather than as an attempt at reconciling all the contributions, Dopfer's own contribution could have been presented as a contribution of its own, adding to this variety. After all, variety in the economic system is very much emphasized and cherished in evolutionary economics. Why not cultivate the same attitude towards the variety in theoretical approaches in evolutionary economics itself?

The publication of the book is long overdue. Most of the papers seem to have been written in or even before 1996. In the meantime, two of the contributors, the Nobel laureates Ilya Prigogine (1977, chemistry) and Herbert A. Simon (1978, economics) passed away. Only few contributors took the trouble of making a serious attempt at updating their papers after 2000. For some of the papers this is a serious drawback. Dosi, Marengo and Fagiolo give a very lengthy and informative overview of the literature on learning (83 pages long when the post-scriptum from 2001 and references are included), but only work until 1996 is covered. Here, given the rapid changes in this field, the delay in publishing is especially damaging. The authors themselves realize this. Had they been trying to follow up on the fast-expanding literature of the last years, they write, a brand new article would have been required. Their “radical” suggestion is that economists ought to make a much greater and more systematic use of cognitive and other social sciences in their analyses of cognition, learning and behavior. This point is still well taken, I think, but as the authors themselves realize the situation now in the profession is much more encouraging than some ten years earlier. With the rapid advent of behavioral economics, behavioral game theory, the work of Gigerenzer and associates of the ABC-group and neuroeconomics and the like the situation has changed considerably.

Despite my qualms, reservations and misgivings, I think this book deserves to be read by anyone interested in the relation between evolutionary theory and economics. The group of scholars assembled is truly impressive. Without exception, the authors are leading experts in their fields. Even though the bulk of the papers were written some ten years ago, most of them still are worth reading. Some of them clearly bring Nelson and Winter's project to a higher plane than where Nelson and Winter (Reference Nelson and Winter1982) left it. For example, Witt, Metcalfe, and Nelson (independently of each other) engage in a much-needed attempt to unpack the phrase “the market out there selects for the most profitable firms.” “The market selects for” really is only shorthand, they all argue. There are always individuals behind it who choose whether or not to buy or use something. Once this is recognized, the question becomes who are the individuals doing the selection and what selection criteria do they apply? What features surviving firms have obviously depends on the answers to these questions. It clearly makes a difference for the type of technological evolution we are witnessing, Nelson argues, whether it is technologists, users or yet other groups that are ultimately in charge. Or, as Metcalfe and Witt put it, evolutionary economics needs to develop its own theory of demand.

Silverberg and Verspagen's contribution also deserves special mention for its self-critical tone. Silverberg and Verspagen ask themselves what evolutionary theories of economic growth have accomplished thus far. They argue that evolutionary theories should aim for more than just reproducing the results of neoclassical growth theory. Neither is it enough in their opinion to argue, as Nelson and Winter do, that evolutionary theories are superior to neoclassical ones in that they are based on more realistic microfoundations. Silverberg and Verspagen urge evolutionary economists to move beyond this “minimalist position.” They suggest that the roles that ‘chance’ and ‘necessity’ (after Jacques Monod) play in actual economic histories should be investigated more thoroughly in computer simulation experiments. If we were able to rewind the tape of life (as Stephen Jay Gould put it), would the same major technological developments that actually took place occur again? If so, the impact of systematic forces (‘necessity’) outweighed that of chance; if not, the conclusion must be the opposite.

Editor Kurt Dopfer, finally, should be credited not only for bringing together such a fine group of scholars. He also puts intricate foundational problems in evolutionary economics openly on the table. Although his Prolegomenon is not easy to follow and digest, he at least tries to tackle these problems head-on. One of the most interesting insights Dopfer comes up with is that efficacy is at least as important as what is put centre stage in neoclassical economics: efficiency. ‘Efficacy’ Dopfer defines as the extent to which two or more components fit together. Even if some component were to have a superior efficiency performance if taken in isolation, Dopfer argues, if the component does not first pass the efficacy test its superior efficiency counts for nothing. If the component is not complementary to what evolved earlier, that is, it stands no chance of being selected. This is a useful reminder not just for neoclassical economics but also for much of evolutionary theorizing in economics, in which components are often studied in isolation so that the preparatory issue of whether the component fits with what already is in place effectively is ignored.