EVOLUTIONARY strongECONOMICSstrong AN INTRODUCTION TO THE FOUNDATION OF.pdfVIP

EVOLUTIONARY ECONOMICS AN INTRODUCTION TO THE FOUNDATION OF LIBERAL ECONOMIC PHILOSOPHY J. Potts School of Economics University of Queensland Queensland 4072 Australia April 2003 Discussion Paper No 324 ISSN 1446-5523  Potts This discussion paper should not be quoted or reproduced in whole or in part without the written consent of the author. EVOLUTIONARY ECONOMICS AN INTRODUCTION TO THE FOUNDATION OF LIBERAL ECONOMIC PHILOSOPHY J. Potts Abstract: This is a schools brief style of introduction to evolutionary economics. It addresses the nature of evolutionary theory in relation to economics, and examines why evolutionary economists argue that market-capitalism is an evolutionary system. Finally, it argues that liberal economic philosophy has much stronger and more direct relationship with evolutionary economic analysis than neoclassical economic analysis. INTRODUCTION Evolution is the process of endogenous change in an open system, an idea that owes just as much to Smith and Hayek and liberal economics as it does to Darwin and biology. In 1859, Charles Darwin published The Origin of Species, a book that redefined the scientific world’s understanding of the origins of life, the structure of nature, and the deep relationship between human existence and the natural world. It is hard to understate the importance of this book in defining the modern