1. Extending the Evolutionary Epistemology paradigm into Economics 1.What is Evolutionary Epistemology (EE)? Terminology coined by Donald Campbell (1974). But various definitions: PC website: “EE is an approach that sees knowledge as a product of variation and selection processes“ Also: “organisms with better knowledge of their environments would have been preferred to organisms with less adequate knowledge.”: better/more ↔ adequate ? 2.Two strands of EE: Weaker version, focuses on sources of knowledge: Knowledge is generated by Darwinian selection and retention processes, both biologically embodied knowledge (phylogenic, in genes) and cognitive learning (ontogeny) Stronger version, focuses on substance of knowledge: All “bodies” and “structures” emerging in evolution are repositories, embodiments of knowledge – even those that emerged “before” biological evolution and those “after” ontogenetic cognitive development My summary: Weak: knowledge accumulation is the red threat that runs through bio-cognitive evolution Strong: all evolution is cognitive evolution

2. Extending the Evolutionary Epistemology paradigm into Economics 3.My objectives today: Expand the EE paradigm into social structures, “beyond” ontogenetic cognitive development In particular into economics, or the organisational structure of human societies Demonstrate how the stronger version of the EE paradigm is applicable in the latter Weak interpretation has found some application in social science/economics: Schumpeter, Nelson & Winter, evolutionary economists These remain partial explanatory mechanisms, strong on formalism but weak in substance I will focus on substantive issues in social organisation of knowledge: distributed knowledge, exchange (costs) of knowledge, role of external repositories of knowledge I start from Entropy Law and applications in economic development, and move towards an information/cognitive interpretation of this Law to explain the self- organising nature of economic systems

3. Extending the Evolutionary Epistemology paradigm into Economics 4.Evolution of human societies from Rift Valley (-2.5 Myears) to Silicon Valley (today) Genetically, no significant differences Knowledge: massive differences 4.1.Is it learning only? Or organisation of knowledge? Difference in organisation: distributed knowledge, including incentives to learn & external repositories 4.2.How much knowledge is there in economic systems? Economic systems revolve around production, trade Production = transformation of goods, energy only: In thermodynamic terms: external entropy up, internal down (cfr Georgescu-Roegen, Boulding) Link with information: entropy concept = probability conceptCfr: pile of papers 4.3.Link production – information – knowledge: Information content of a set = number of distinctions in a set Knowledge accumulation or learning = identification of regularities in a set of distinctions

4. Extending the Evolutionary Epistemology paradigm into Economics 5.Link economics – entropy – knowledge “Simple” Nature: 1st/2nd Law of Thermodynamics apply: conservation & decay “Complex” Nature: “dissipative systems” (Prygogine): produce order by using energy Examples: molecules, crystals Maturana: Allopoetic systems (“Hedgehogs”) Living cells:Autopoetic systems (“Foxes”): Homeostatis, the ability to maintain internal order by giving a variety of responses to external perturbations = cognition Knowledge = the “range” of available responses, behaviours (Plotkin)

5. Extending the Evolutionary Epistemology paradigm into Economics 6.Learning knowledge, accumulation of responses: Mechanical: only 1 response, invariable Organisms: genotypes, knowledge accumulation through Darwinian selection across generations, range of responses available Cognitive systems: phenotypes, knowledge accumulation within a single generation, wider and adaptable range of responses Humans: knowledge transmission across a single generation, group of individuals and different genetic branches, and specialisation Example: Inuit can benefit from learning in tropical forests Three types of transmission: Imitation (Boyd & Richerson): no evolutionary advantage, except restrictive conditions (Rogers, 1985) Symbolic Economic (embodied knowledge)

6. Extending the Evolutionary Epistemology paradigm into Economics 7.Distributed knowledge in human societies Advantages of distributed H: If H accumulation would be purely individual, than HT = Hi If H accumulation under full specialisation, than HT = n Hi Except for transaction costs (degree of overlap): HT < n Hi Distributed H goes beyond individuals: external storage Historic evolution: Paleolithic (2.5 M years): no artefacts, no symbols, no external storage, barely a language, mostly mimetic transmission (M Donald) Neolithic (30-40 k years): artefacts, symbolic transmission, development of written language, starting with figures (Goody)

7. Extending the Evolutionary Epistemology paradigm into Economics Evolutionary efficiency: Symbolic transmission is more efficient than imitation, but reduces distributed knowledge Economic transmission of embodied H is more efficient, minimizes the H interface Example: buy a computer Problem with economic transmission: incentives for learning, how to avoid free riding? Embodiment in excludable goods, with private property rights Evolutionary consequences: transmission across individuals: lineages disappear, there is only 1 lineage optimizes use of scarce learning capacity

8. Extending the Evolutionary Epistemology paradigm into Economics 8.Conclusions: 1. Symbolic transmission and Economic transmission of embodied knowledge are stages of evolution beyond genotypic and phenotypic: external storage, increasing evolutionary advantage As such, they are an extension of the EE paradigm 2. Next step: “Active externalism”, “the extended mind”: external knowledge storage and learning becomes active allopoetic system (Hedgehogs), possibly autopoetic (Foxes)? 3. Back to definition to Darwinian selection: selection on basis of “better” or “adequate” knowledge? - With distributed knowledge, neither applies, - Group selection may become an issue (as opposed to individual selection in Darwinism)