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Economic Emergence: an Evolutionary Economic Perspective

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  • John Foster
  • J. Stan Metcalfe

Abstract

The standard neoclassical approach to economic theorizing excludes, by definition, economic emergence and the related phenomenon of entrepreneurship. We explore how the most economic of human behaviours, entrepreneurship, came to be largely excluded from mainstream economic theory. In contrast, we report that evolutionary economists have acknowledged the importance of understanding emergence and we explore the advances that have been made in this regard. We go on to argue that evolutionary economics can make further progress by taking a more 'naturalistic' approach to economic evolution. This requires that economic analysis be fully embedded in complex economic system theory and that associated understandings as to how humans react to states of uncertainty be explicitly dealt with. We argue that 'knowledge,' because of the existence of uncertainty is, to a large degree 'conjectural' and, thus, is closely linked to our emotional states. Our economic behaviour is also influenced by the reality that we, and the systems that we create, are dissipative structures. Thus, we introduce the notions of 'energy gradients' and 'knowledge gradients' as essential concepts in understanding economic emergence and resultant economic growth.

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Paper provided by Max Planck Institute of Economics, Evolutionary Economics Group in its series Papers on Economics and Evolution with number 2011-12.

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Date of creation: Jun 2011
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Handle: RePEc:esi:evopap:2011-12

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References

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  1. Veblen, Thorstein, 1898. "Why Economics is not an Evolutionary Science," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 12.
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  3. Witt, Ulrich, 2009. "Propositions about novelty," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 311-320, May.
  4. John Foster, 2010. "Energy, Aesthetics and Knowledge in Complex Economic Systems," Discussion Papers Series 404, School of Economics, University of Queensland, Australia.
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Cited by:
  1. John Foster, 2013. "Energy, Knowledge and Economic Growth," Energy Economics and Management Group Working Papers 3-2013, School of Economics, University of Queensland, Australia.
  2. Duarte N. Leite & Sandra T. Silva & Óscar Afonso, 2012. "Institutions, Economics and the Development Quest," FEP Working Papers 457, Universidade do Porto, Faculdade de Economia do Porto.

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