Higher selection processes in evolutionary economic change

Virtually all models of economic change are based on a Darwinian picture of a world where change is gradual, smooth, and where economic survival depends on being more efficient. This paper, drawing from current controversies in evolutionary biology, presents a broader interpretation of evolutionary change in which competitive selection is only one possible reason for economic survival. Economic change is presented as a hierarchical process. At one level, change takes place through the accumulation of small changes based on competitive selection at the margin, as described by standard economic theory. At higher levels, survival depends on processes over which the agent being selected has no control.This paper was written while the author was a visiting researcher at the Institute for Economic Research (IFO) in Munich. Support from the German Academic Exchange Service is gratefully acknowledged. Helpful discussions and comments were contributed by Paul Hohenberg, Joel Mokyr, Lothar Scholz, and James Stodder.