Throughout the past, biology has borrowed much from economics. I think it’s time that economics begins to take back some ground. I’d argue that economics and biology have more in common than you’d think. We both deal with agents who are constrained in their environments and are subject to larger systems whose rules may not be fully known. Agents, animals, cells, and DNA all have similarities in how they engage with the world. 1) They’re subject to the law of demand: price and quantity demanded of any good and service are inversely related to each other. 2) They must follow diminishing marginal returns. 3) They all abide in a world of emergent behaviors and outcomes; some of these may take hundreds or more generations to manifest themselves.
Given these constraints, it can be followed that outcomes of this system can be described by other outcomes of the same system. Most notably, there should be patterns of behavior and design that transcends the individual agents within the system, no matter how large or small they might be. From this point, I think that the sciences, both social and physical, should be able to share methods and ideas. I think many of the truths in our would can be found at the intersection of these ideas.
In my current research, I’m looking to create a synthesis between the rules provided by evolutionary biology and the human action from the micro scale to the macro phenomenon. Many of these patterns will reside in the meso-level, a place in between micro and macro. Note that the feedback loops will reside at all levels of the system.
I’m going to take a moment here, while I am in class to give my impression on Charlie Plott’s fundamental equation. In it, he says
preferences * institutions * physical possibilities = outcomes.
Is there anything wrong with this attempt to constrain the outcomes of human actions? I would say yes. The biggest issue resides in an engineer-like observation of human action. This equation steps outside the system, when it actually unable to do so. Furthermore, all of these are self-reinforcing or self-removing. The equation is entirely endogenous at both the system level and the agent level. In a Robinson Crusoe situation, at least on of these variables need not exist. Additionally, where does choice and subsequently action occur? In this line of thinking, there is little room for the adaptation that happens in reality.
On a side note, I recently listened to a podcast on the ideas purported by Glen Weyl where he claims that the study of economics has a difficult time explaining increasing returns to scale. Much of human social behavior exhibits this, not to mention digital technologies. Does economics explain this? I’ll link to another blog on this later.