Sunday, June 29, 2008

It's Herd Behavior, Uh Huh, It's Evolution, Baby

Anybody interested in institutional economics should be interested in evolutionary theory, a theory that I can stand to learn more about. The interest in evolution among institutionalists goes back to Veblen. A more-or-less mid twentieth expression of interest can be seen in Ayres's biography of Thomas Huxley, also known as "Charles Darwin's bulldog". Geoffrey Hodgson is a current institutialist interested in evolution. What evolves in economies? I suggest organizational forms, business processes, and technology, at least.

I never saw anything interesting when operating Tierra on my old computer. Perhaps I understand neither the assembly language nor the visualization well-enough. Or perhaps I should have designed experiments and let it operate for more generations. I was never into Core Wars either. John Conway's Game of Life was more my speed. I don't seem to have executables for any of these for my OS X Macintosh.

But I think Thearling and Ray (1994) describe a neat idea. In Tierra, programs composed of machine instructions reproduce, perhaps with mutations. Memory is not protected, and programs can overwrite one another's code. An ability to more successfully protect one's own code and data and overwrite others is selected for.

One can do repeatable experiments with a computer program. Each generation can be saved, and the simulation can be rerun from any point in time, with random number generators restarted with new seeds. Lenski et al (2003) report such experiments with Avida, a computer simulation much like Tierra. In Avida, evolving computer programs collect energy to run their code. Programs that can do advanced logical operators are more fit. Lenski et al show that the evolution of a complex feature may depend on the prior evolutionary history of an organism providing the potential of the last few steps, even if previous mutations do not increase fitness.

I was surprised to find last week not only that repeatable experiments with evolution have been performed on simulations, but that Richard Lenski has been performing such a repeatable experiment on real-world organisms - namely, E. Coli - since 1988. (I must have missed Carl Zimmer's article, of 26 June 2008 in The New York Times, on the Long Term Evolution Experiment (LTEE).) Anyway, Blount, Borland, and Lenski's 2008 article reports on recent results.

In the LTEE, populations of each generation are isolated in a solution containing glucose for the E. Coli to eat. The isolated solution, I guess, acts like the simulated core memory in Tierra. And the E. Coli of any generation and evolutionary history can be frozen and restarted, just as an image of the computer core memory in a simulation run can be saved and reloaded. One run yielded a mutation that seems to have surprised Linski. This mutation allows the E. Coli to thrive on citrate, whatever that is, in the solution even "under oxic conditions". The ability to sample previous generations and look at other isolated population histories starting from the same initial conditions allows Linski and his colleagues to understand something about this mutation even before genetic sequencing. It is not the result of a single gene mutating, but is dependent on prior mutations in the history. These prior mutations may not have increased fitness themselves, but prepared the E. Coli to become dramatically more well-adapted for their specific environment after a couple more mutations. History matters.



Anonymous said...

Anyone interested in economics in general should be interested in evolutionary theory.

I do think that one should be wary of too close an analogy with biological evolution -- the selection and reproduction processes in the market and society are sufficiently different from the biological counterparts to make a close analogy dubious.

I found your most interesting link to be the Geoffrey Hodgson interview. I am glad that I'm not the only one confused about what "institutions" is supposed to mean.
What is wrong with using the more precise and traditional term "cultural norms" to stand for "systems of established and embedded social rules that structure social interactions"?

Evolutionary theory as applied to economics would need a lot more precision too. I don't find Hodgson's arguments about the normative implications of taking cultural norms seriously all that convincing. For instance, one could use the acknowledgment that cultural norms matter, to argue that the Scandinavian model is a fluke which works --if it does-- only in particular culturally homogeneous environments (and almost city-sized nations).
Secondly and more importantly, can the government have enough information about those evolutionary processes to be confident about the influence of particular normative instruments?

Without a more precise evolutionary economics such questions can not be considered answered.

Finally, Hudgson complains that this type of research is frowned upon in most academic departments. I'm not sure why he does not use the fact that evolutionary-like theories are a natural development of neoclassical theories. Thus the intention to bring general equilibrium closer to reality even in the slightest, leads to the appearance of path-dependent prices or perhaps equilibria.
One can then use more or less neoclassical tools to study such questions -- I doubt that economic departments would object.


Anonymous said...

"Anybody interested in institutional economics should be interested in evolutionary theory, a theory that I can stand to learn more about"

I've been reading a lot about evolutionary theory, as part of my research on Kropotkin's Mutual Aid. This was provoked by one of Huxley's articles.

Significantly, Darwin seems to have been influenced by classical economics as well as Malthus in developing his ideas. So, using evolutionary theory in economics means it is coming back full-circle, somewhat. And, of course, Social Darwinism has always been utilised by the more extreme advocates of free market economics.

In case anyone is interested, the latest draft of my introduction to mutual aid can be found here:

Mutual Aid: An Introduction and Evaluation

Any suggestions or comments will be gratefully received.

An Anarchist FAQ

Michael Greinecker said...

Why no evolutionary game theory?

Robert Vienneau said...

Thanks for your comment Iain. I own a collection of Kropotkin's revolutionary pamphlets. Not only does it not contain "On Mutual Aid" - I haven't even read all of it.

Michael, Hodgson has been writing books and essays for decades. Some of his writings discuss game theory. For example, in his 1988 Economics and Institutions, discusses Andrew Schotter's work, in which institutions and conventions emerge in an analysis of repeated games. I'm not sure if this is evolutionary game theory. Hodgson finds Schotter's work valuable as an internal critique of neoclassical economics. Hodgson, however, is more interested in understanding the economy. And he thinks game theory retains too much of an emphasis on maximization and not enough capability to capture information problems in the real world.

But to understand more about Hodgson, you'll have to read him.

Arkady said...

Game of Life (freeware version) for Mac OS X.

Robert Vienneau said...

Thanks, Arkady. I see Golly includes, under the Help menu, my favorite pop-science book about this stuff - William Poundstone's The Recursive Universe. I find it interesting that Von Neumann discovered the logical structure of DNA, in some sense, at a very abstract level, before Watson and Crick discovered the physical structure.

Golly also references Stephen Wolfram's A New Kind of Science. Stephen Levy puts this among his top 10 tech books in this month's IEEE Spectrum. He describes it as a "behemoth", unlike Golly's description as "bloated and egotistical". I never managed to finish it, myself.

Anonymous said...

A minor point: I think Schrodinger may have beaten Von Neumann to it with "What is life?"