Abstract: This essay explores whether it is possible or desirable for present-day economic theory to incorporate biological or evolutionary insights of the type suggested by Alfred Marshall but not fully embraced by him.
If the study of economics is to function as a progressive system that guides and explains the behaviors of men as free and creative agents, it is necessary to examine the study in an open and dynamic way that emphasizes the growth of knowledge and qualitative factors as the prevailing force of change and progress. Early on Marshall (2009) discovered the inherent error with rational mechanistic economic systems when he said “economics, like biology, deals with matter, of which the inner nature and constitution, as well as the outer form, are constantly changing” (p. 637). Whether Marshall knew it or not, the problem between statical and biological theories is fundamentally a philosophical one. This essay will explore this problem, delineate its philosophical roots, and build a case in favor of evolutionary economics.
The central thesis of this essay argues that neoclassical economic models operate in the outdated modernist paradigm that utilize rational closed systems which are, as a result, authoritarian and unsustainable with respects to free market innovation and evolution. The argument presented here is that economic models need to shift away from quantitative measures emphasizing ideal equilibrium states and towards a post-modern conception that accounts for freedom and change. In this way economics will reflect nature accurately, i.e. men are individual and free agents acting interdependently within an evolving economic landscape. This will provide holistic and sustainable model for interpreting progress by individuating agents according to inevitable qualitative changes within an economic system.