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(1910-1993)
Kenneth Ewert Boulding
 
: Journal of Post Keynesian Economics, Fall96, Vol. 19 Issue 1, p83, 18p
Khalil, Elias L.
KENNETH BOULDING: ECODYNAMICIST OR EVOLUTIONARY ECONOMIST?
Kenneth Boulding had no trouble crossing the divides separating evolutionary biology, ecology, Keynesian economics, conflict studies, socioeconomics, and environmental economics. He was consumed by a love of knowledge and a passion for constructing a general theory of human behavior and social systems. This paper focuses only on the relevance of his employment of ecological principles to the understanding of socioeconomic dynamics. This should be relevant to economists who have recently become interested in chaos theory, nonlinear dynamics, and positive feedbacks (e.g., Day, 1982, 1983; Baumol and Quandt, 1985; Semmler, 1986; Barnett et al., 1989; Baumol and Benhabib, 1989; Goodwin, 1990; Brock et al., 1991; Benhabib, 1992; Bak et al., 1993).[1]
The main thesis of the paper is that, while Boulding claimed to have offered an evolutionary account of economic change, he has mainly presented an ecological account of transformation of artifacts. The paper argues that there are at least two kinds of temporal change, noted by Nicholas Georgescu-Roegen, among others, that need to be distinguished in order to situate Boulding's contribution properly. One kind, studied by ecodynamics, examines transformations as exemplified by market fluctuations, where the principles of ecosystem equilibrium might be helpful. Another kind, studied by evolutionary theory, scrutinizes processes of development of economic organizations such as firms and national economies where the principles of evolutionary biology might be suitable.[2]
This paper maintains that, in order to make sense of Boulding, one must see his view of temporal change as within the ecodynamical research area, rather than within the evolutionary/developmental one. The two kinds of temporal change are not alternative perspectives of the same object but, rather, deal with two different objects. The two objects are not differentiated by evolutionary game theorists, who use the neoclassical optimization approach, and also by Schumpeterian and Keynesian economists, who stress nonergodic feedbacks (e.g., Arthur, 1989, 1990; Anderson et al., 1988; Day and Chen, 1993; Radzicki, 1990; Rosser, 1991, 1992, 1993). Boulding himself is not clear about the difference between the two research areas in most, but not all, occasions. He confusingly appeals to developmental biology (the rise of an embryo from the fertilized egg) as a substantive heuristic of the production of goods and services. It is true that he does invoke organismic metaphors, Darwin's theory of natural selection, and terms such as "evolution" to describe the transmutation of knowledge and social organization (Boulding, 1981, 1989a). However, when Boulding goes beyond metaphors and offers insights about the role of knowledge and its transformation, he falls back onto the ecological dynamics framework.
On one occasion, Boulding recognizes that his ecodynamics is different from the evolutionary/organismic view.[3] In a reflection on his work, Boulding (1985-86, p. 3) notes the difference between two kinds of approaches in general systems theory. He identifies James Miller's 1978 volume as the epitome of that branch of general systems research interested in the physiology of social organization.[4] In contrast, Boulding locates his 1978 book as representing the other branch of general systems research, which is concerned with ecological and market dynamics. Boulding expresses the hope that these two branches of scientific discourse will be united in the future, since they seem "highly complementary."
The proposed distinction between ecodynamics and evolutionary economics can be related to Joseph Schumpeter's (1949) famous distinction between growth and economic development. Growth involves the quantitative measurement of change of capital stock, human labor, resources, and output. Schumpeter (1954) probably correctly maintained that equilibrium economics is legitimate if it is restricted to the study of growth. In contrast, development entails the study of how growth is related to the underpinning cultural and legal institutions, major technological paradigms, and the forms of business organization.
This paper maintains that, while the two modes of conception are radically different, they do not exclude each other, since each addresses a different phenomenon. It might be more beneficial, at least at the theoretical level, to keep them separate. However, they might be joined in the case of applied economics, where one cannot ignore how market interaction (ecodynamics) influences the path of evolution of the firm and the economic society at large. But economic theory would benefit from keeping, at first approximation at least, the two kinds of analyses apart. There is a great tendency to confuse them because of the temptation of Ockham's razor.[5]
The next section elucidates Boulding's basic concepts. The third section discusses Boulding's three sagas. This is followed by a section that argues that Boulding is not an evolutionary thinker but rather an ecodynamicist. We then show that ecodynamical change differs from evolutionary change by going back, via Georgescu-Roegen, to Aristotle's distinction between mechanical movement and development. The conclusion relates the distinction to the current confusion surrounding the notion of increasing returns as handled, among others, by Brian Arthur, Douglas North, and Paul Krugman.
Boulding's basic concepts
One can safely ignore Boulding's discussion in Ecodynamics of the evolution of the universe. But his discussion of population dynamics (ch. 3) and ecological dynamics (ch. 4) inform his categories more than his survey of biological evolution (ch. 5). This paper strictly reviews Boulding's categories concerning societal dynamics.
Artifacts
Boulding (1978, p. 121) argues that the key to the understanding of ecodynamics is the study of artifacts: "Social dynamics can be thought of primarily as the evolution of human artifacts." But he defines artifacts in a peculiar way:
Human artifacts not only include material structures and objects, such as buildings, machines, and automobiles, but they also include organizations, organizational structures like extended families . . . tribes, nations, corporations, churches, political parties, governments, and so on. Some of these may grow unconsciously, but they all originate and are sustained by the images in the human mind. [Boulding, 1978, p. 121]
Boulding seems to confuse tools, which are usually called artifacts, with organizations.[6] It is true that organizations, like tools, are made by and for humans. But there is one difference. The leader of an organization has to appeal to the members' loyalty to a common goal in order to keep the organization intact. This is not the case with the engineer in relation to the artifact he or she creates. Also, organizations are entities motivated by strategies that stand somewhat independently of the goals of the constitutive members (Khalil, 1996a). To wit, the existence of organizations does not usually depend on the identities of particular members. While IBM today is the same individual as IBM a half century ago, the people who comprise it have changed.
Boulding's definition of artifacts is even broader than that for organizations. He continues and states that human beings are also artifacts:
Even human beings themselves are in considerable part human artifacts, shaped by cultures in which they grow. . . . I am as much a human artifact as the chair I sit on and the house that shelters me. [Boulding, 1978, p. 122]
Again, it is true that children, like tools, are shaped by sociocultural variables. But children develop gradually into more autonomous persons with self-articulated goals, while tools cannot develop on their own. This is the case irrespective of the particular theory one holds with regard to the nature of human society.
Boulding even considers trees, horses, and grasses as "biological artifacts." But such organisms are not manipulated by external agencies, as is the case with tools employed by monkeys and humans. Likewise, it is baffling to dub rocks "geological artifacts." No active will has helped in the formation of rocks.
But Boulding's confusion dissipates once it is clear that he is not constructing an evolutionary theory. He is not interested in making distinctions between the unit of evolution (such as genome, organism, or troop of organisms), on the one hand, and the environment, on the other. Such a separation and the identification of the unit of evolution are at the heart of controversy in evolutionary biology (Brandon and Burian, 1984).[7] Boulding is, rather, concerned with production activity, which underlies human artifacts and organisms (ecological artifacts): Both are produced by a plan, whether knowledge or DNA:
[T]he process by which a fertilized egg becomes a chicken is not essentially different from the process by which knowledge in the minds of automobile company members is transformed into an automobile. [Boulding, 1981, p. 25]
Boulding ignores the difference between the two products, organisms and tools, and dubs them "species." This would be a jumble if Boulding were interested in evolutionary phenomena, where he has to separate the organism from its environment. But it makes sense to ignore the distinction between the two insofar as "ecological relationships" are the focus:
Human artifacts enter into ecological relationships with each other and with biological artifacts. The automobile is competitive with the horse and has reduced its number. . . . It is a predator with regard to oil supplies because it is diminishing their quantity to the point where in a few decades both species face extinction. [Boulding, 1978, p. 122]
Boulding's treatment of resources, firms, organisms, and automobiles as logically equivalent "species" has obviously nothing to do with how biologists define "species."[8] The categories are, rather, lumped together as "artifacts" because of Boulding's particular ecodynamicist question: What are the effects of the introduction of automobiles on the niches of rabbits, oil deposits, or railway companies? Or what are the consequences of air pollution on the population of eagles, pine trees, and houses? To answer these questions, one does not need to draw the familiar boundaries called by evolutionary theory among entities and their environment.
Human knowledge
Boulding makes an important qualification in his treatment of all forms within the ecological space as equivalent artifacts. He maintains that the introduction of the human brain on the stage of natural history has drastically changed the scene because of the image-making capability of the brain to fantasize and act on new possibilities:
It is this extraordinary capacity of the human brain for making images not only of the world outside it, which it sees as reality, but also, in fantasy, of innumerable worlds of the imagination, which distinguishes it from even the highest brains of nonhuman animals. [Boulding, 1978, p. 127]
For Boulding, the products of the human brain, human artifacts, are different from biological and physical artifacts. The brain generates knowledge on how to produce things that differs from inherited know-how, that is, the DNA. Such knowledge can imagine immediately its artifact, while the DNA cannot. Therefore, knowledge can manifest itself without the need for phenotype, while such phenotype is essential for the manifestation of the DNA genotype.
With the introduction of human knowledge, Boulding (1978) insists that "[i]t is important to recognize that there are two different genetic processes at work in the world." Nonhuman development is controlled by non-Lamarckian "biogenetic structure" of DNA (the genosphere), while human production operates according to Lamarckian "noogenetic structure" (the noosphere). The latter involves the neurological system, which makes it possible for higher organisms, and especially humans, to learn and transmit knowledge from one generation to the next. Such learning in human history becomes so dominant that the biogenetic structure cannot account for the variety of human artifacts.
While the idea of image or growth of knowledge makes Boulding come closer to evolutionary thinking, it does not make him an evolutionary thinker. For Boulding (1978, pp. 124-127), the creative act of the image in the production of artifacts still, to a great extent, parallels the biological production of organisms from fertilized eggs. The production of artifacts, such as automobiles, undergoes the steps of replication, recombination, redefinition, and realization. Replication entails the transmission of information via oral and written language. Recombination involves the joining of different competencies and specializations in, for example, the making of automobiles. Redefinition amounts to the introduction of technological innovation and discovery. Realization improves the system of communication transmitting directives on how to accomplish a plan. But there is one capacity not found in nonhuman spheres. It is the human mind's imaginative ability, which replaces the blind force of natural selection in the nonhuman sphere. The human mind has the "capacity for forming complex images of the future, as a product perhaps of the larger capacity of forming images of space and time" (p. 132).
Probably influenced by Auguste Comte, the nineteenth-century French philosopher, Boulding (1978, pp. 134 ff.) records the stages of development of the human mind from folk to literary and finally to scientific knowledge. Folk knowledge consists of images of ordinary life and the immediate sensations concerning one's environment. Literary-philosophical knowledge entails speculative stories about causes behind sensual experience. In contrast, scientific knowledge amounts to a system of organized learning in light of systematic observations and testing. The scientific enterprise has become a subculture in the past five hundred years, certainly assisted by tools of measurement and technology.
Each stage in the development of human knowledge has ushered in a major expansion of human niches. While folk knowledge is associated with the paleolithic and early neolithic niches, literary-philosophic knowledge is related to the rise of civilization. Finally, the triumph of the scientific mind is accompanied by the commercial and industrial revolutions in Western Europe in the past few centuries.
Boulding's three sagas
Boulding maintains that human history can be understood as the incessant interaction of different artifacts. He presents three major clusters of such interactions, each of which is also composed of three other groupings (what he calls the "trinity of trinities" [1978, p. 211]).
The first cluster, or saga, consists of the interrelations of things, organizations, and people. The first artifact, "things," consists of raw, finished, and part-finished
material artifacts from a vast phylum of species beginning with the simplest stone tools and wooden sticks, going to fires, which we must count as human artifacts, skins, shelters, and bone implements, developing in an almost endless variety of forms of increasing complexity to the spacelab and the latest computer. [Boulding, 1978, p. 212]
The second artifact, "organizations," ranges from the human family to modem complex societies. Boulding insightfully notes that a key element in the explanation of the latter is the distinction between the person and the role:
An organization can be defined as a structure of roles linked by lines of communication. The role rather than the person is the essential unit of the organization. Persons occupy roles and behave accordingly, but the same role may be occupied by different persons in succession or indeed occasionally by artifacts such as a machine. [Boulding, 1978, p. 212]
Finally, the third artifact, "people," introduces the element of population size into the ecological space. An excess amount of population or population movement induces technical and organizational changes, one of which was the neolithic revolution. People also form human capital, which accounts for the generation and transmission of knowledge. Such knowledge intermediates the interaction between organizations and things.
From the evolutionary standpoint, there is a difficulty with Boulding's thesis about the equivalency of people, organizations, and things. People, unlike organizations, cannot act as an individual because the category expresses merely the aggregation of body masses, not necessaerily organized to attain a goal. Furthermore, things stand asymmetrically to persons and organizations. Organizations and persons can manipulate things, but things cannot manipulate organizations and persons. From the ecological standpoint, however, one might entertain the logical equivalency of organizations, people, and things. It is only from the viewpoint of ecological competition that Boulding can maintain that the interaction between things and organizations makes it "hard to say which is the leader in the movement":
We certainly cannot take the simplistic view that it is always material artifacts which create the social organizations or that it is always the social organizations which create the material artifacts. Each reacts on the other in a constant process of positive feedback. Did agriculture produce the village or did the village produce agriculture? We do not really know. [Boulding, 1978, p. 215]
Boulding's second saga consists of knowledge, energy, and materials. The first category, "knowledge," plays a central role in Boulding's image. But he warns that we should not forget energy and matter as the substrate on which knowledge works. The trio of knowledge, energy, and matter are essential ingredients in the functioning of organizations and their ability to interact with the environment.
The third and most interesting saga is one of Boulding's major themes, which he introduced earlier in an article and elaborated later in a full-length book (Boulding, 1962, 1989b; see also Pfaff, 1976). It is about the trichotomous distinction among three systems that act as "social organizers" of the human ecology. They consist of the "threat system," "integrative system", and "exchange system." The threat system exemplifies political power; the integrative system represents one-way exchanges (gifts, philanthropy, and government transfers) that cement communal cohesion; and the exchange system is the sphere of economics proper. An important pulse in Professor Boulding's work is the containment of the threat system by expanding the integrative system.
Assessment
In Boulding's three sagas, "everything depends on everything else" (1978, p. 224). But the human capacity to produce images is the central actor in his human ecology--a thesis that can be traced back to his most read book, The Image (Boulding, 1956).
Boulding frequently described the mutation of knowledge as "evolutionary." But human knowledge, for Boulding, is ultimately an artifact no different from buildings and chairs. While he allows knowledge to change through learning, there is no criterion for its learning (like the neo-Darwinian optimization of fitness criterion [Khalil, 1993a, 1993b]), or for its progress. So the temporal change of human knowledge is basically the outcome of the human mind processing information as a result of its symmetrical interaction with people and chairs. This can make sense only if society is seen primarily as an ecosystem of externally related chairs and people. In this manner, learning is simply portrayed as self-feeding adjustment as the organism enters new experiences with its ecological surroundings.
One of Boulding's (1934) early publications, which put him on the map of economics, is a critique of Frank Knight's theory of capital using an ecological approach. Boulding borrows the population model from ecology in order to illustrate his theory of capital as a fund rather than a flow. Capital goods are presented as a population with different vintages; they enter and exit the capital fund like births and deaths of organisms in a population. Frank Knight (1935) made Boulding famous overnight when he published an article with the subtitle "Mr. Boulding and the Austrians." Boulding (1936) explicitly objected to Knight's theoretical treatment of capital as a flow that can be switched easily from one industry to another in response to changes of relative rates of profit. Boulding's thesis about the distinction between flow and fund persisted in his writings throughout his career (see Boulding, 1993). The thesis, which came to be called the balance sheet approach to national income accounts, permeates his most important contribution to economics, A Reconstruction of Economics (1950).[9]
If one subscribes to one thesis of the sociology of knowledge literature--namely, that one's early orientation lays the direction of one's path of intellectual development--then it is clear that Boulding's concepts of capital and national income accounts shaped his more elaborate vision of the transformation of artifacts in human ecology. The vision is not evolutionary for the simple reason that it lacks the identification of the unit of evolution. Such a lack was recognized by Boulding when he related the anecdote of the question of H.W.B. Joseph, his Oxford philosophy tutor in the 1930s: "What evolves, Mr. Boulding, what evolves?" (see Siguenza, 1981, p. 146). Boulding's answer, that human artifacts from automobiles to knowledge are the units of "evolution," cannot be taken seriously. Boulding's concept of artifacts is so broad as to include everything in the ecological space. And for a unit of evolution to act as a unit, it must be separated from the environment--a position upon which rico-Darwinian and non-Darwinian (such as neo-Lamarckian [Khalil, 1993a]) theorists concur (Brandon and Burian, 1984).
The unit of evolution has to be contrasted with an environment, possess a certain organic cohesiveness, and act according to a strategy in order for it to evolve. Automobiles and chairs do not qualify in any sense. They clearly lack organic connectedness and strategy. Furthermore, automobiles and human knowledge do not stand on the same logical plane. Only one presupposes the other. In addition, knowledge is not a purposeful unit; it is not even a unit. While knowledge can stand independently of its creators, as illustrated by printed matter and electronic data bases, it is meaningless independent of the receiving subject.
In order to account for the evolutionary process, evolutionary theory must start with units or individuals. Although the claim cannot be defended here, organizations as households, firms, and political communities are good candidates to be considered as individuals. In order to elucidate the cohesiveness of such units, the theory must start with the organic composition of the division of labor recognized by James Miller (1978).
Back to Aristotle via Georgescu-Roegen
Nicholas Georgescu-Roegen's distinction between two kinds of temporal change might shed some light on the fundamental difference between Boulding's ecodynamical and Miller's organic (evolutionary) kinds of temporal change. Georgescu-Roegen (1971, p. 197) differentiates between "irreversible" and "irrevocable" change. Both are certainly "non-reversible" change in the sense that they are not like reversible phenomena that "follow the same course phase by phase in the reverse order," like the movement of a pendulum in a zero-friction container or the rolling of a billiard ball on a zero-friction surface.
The first kind of non-reversibility, "irreversibility," amounts to cyclical motion where the object "can return to any previously attained phase." Georgescu-Roegen illustrates irreversibility with the flow of vehicles in a traffic circle and the tree losing and gaining its leaves. Other examples abound from the pace of the heartbeat to sleep and mood fluctuation.
In contrast, irrevocable motion involves "processes that cannot pass through a given state more than once." This includes the aging process that characterizes all living entities and technological development.[10] Irreversible dynamics is the result of statistical improbability, while the irrevocable process is the outcome of ontological impossibility. For example, a hurricane does not reverse its path because of complicated factors, but it is not impossible for it to do so. In contrast, it is impossible, even theoretically, to reverse the aging of cells and organisms.
Aristotle makes an important distinction that may shed light on Georgescu-Roegen's contrast between irreversibility and irrevocability. In book 5 of The Physics, Aristotle differentiates between movement (kinesis) and development (metabole, which is about internal processes of change). It seems that movement depicts reversible/irreversible change, while development portrays irrevocable change. With regard to movement, "we may . . . add that the 'forms' and 'conditions' and 'place,' which are all goals of movement, are themselves without movement" (Aristotle, 1980, vol. 2, p. 11 [Physics, book 5, ch. 1,224b, 5-15]). This is the case because "no quality or place or magnitude either causes movement or experiences it"; movement is merely the passing of a subject between a starting point and a goal, that is, between what Aristotle calls "contraries."
With regard to development, the form of the subject undergoes transition as in genesis--what Aristotle calls the unqualified "coming into being." In unqualified transition, the form undergoes a mere negation from A to its contradictory not-A. In qualified transition, the form undergoes "'coming to be this or that' from being not this or that." "Thus the transition of x from 'not-white' to 'white' is a coming-to-be of white; whereas the transition of x from simple non-existence to existence is an unqualified coming into being" (Aristotle, 1980, p. 15).
Some of Aristotle's examples of development are obviously faulty--for example, when he considers the rise of temperature of a subject as "development"--similar to the perishing of an organism or the development of an oak tree from the seed. Nonetheless, his distinction of movement and development is important. The distinction amounts to the observation that development is about relations and "relations cannot 'move'": "From all this it follows that genesis cannot be a movement, for, if it were, the non-existent in its transit to existence would have to move" (Aristotle, 1980, p. 17). To start with, "anything that moves must have position, which the non-existent cannot have, since it is not anywhere." "Neither can perishing," likewise, "be a movement; for the opposite of a movement is either movement or rest, whereas the opposite of perishing is genesis" (p. 19).
It seems reasonable to identify "movement" with the issue of reversibility since it is with respect to external contraries or poles that do not move. Similarly, it appears convincing to identify development with irrevocability since it is about processes of form either coming into being or perishing. Such processes are irrevocable because they do not involve movement of the subject between external contraries, but rather the transition of form from what is potential to actual and into nonexistence.
Boulding's ecodynamics is obviously about a particular kind of change, namely, movement. It is not about the flourishing of capacity or development from the general to the particular. Insofar as the economy exhibits both kinds of change, it is erroneous to absorb Boulding's ecodynamics (and maybe equilibrium economics) within the paradigm of evolutionary economics.
Conclusion
This paper maintains that Boulding's theory of change is mainly ecological as opposed to evolutionary. The ecological/evolutionary divide runs along, respectively, the difference between the Keynesian multi-plier-accelerator model that determines effective demand, on one hand, and the trajectory of technological/institutional regime underpinning production, on the other (Khalil, 1995a). The two kinds of change are confused probably because ecodynamical change and evolutionary change are characterized by recursive, nonergodic feedbacks. Stated simply, however, the ecodynamical/Keynesian type of change is about fluctuations around a trend, while the evolutionary type is about the trend itself. Thus, they are not alternative approaches. To distinguish them, I suggest calling the evolutionary kind of change "non-ergodic development," while dubbing the ecodynamical kind of change "nonergodic dynamics."
Aside from other differences, the works of Brian Arthur (1989, 1990), Douglass North (1990, ch. 11), and Paul David (1985) generally exemplify the evolutionary approach concerning nonergodic development. Their work deals with how an initial investment in a certain, and maybe less efficient, technological/institutional framework makes it entrenched as a result of learning-by-doing and increasing returns. Thus, nonergodic development deals with the fundamental, underpinning process of division of labor in society.
In contrast, the ecodynamical approach concerning nonergodic dynamics focuses on market cumulative causation. Such self-feeding causation takes the form of spatial polarization as well as temporal fluctuation. The best-known work with regard to spatial polarization is Paul Krugman's (e.g., 1991) theory of geographical core/periphery bifurcation. Krugman traces the rise of core/periphery to increasing returns to the extent of production an idea highlighted earlier by Allyn Young and Nicholas Kaldor. Krugman shows how highly fixed costs and costs of transportation induce firms to concentrate their investment in a few plants and in regions close to the population center. The move toward such a center spurs ecodynamical change, which makes the center more attractive to other firms--which prompts nonergodic, uneven regional growth.[11]
With regard to temporal fluctuation, David Levine's (1981) theory of the business cycle is a good example.[12] The theory shows how investments tend to be bunched together because economic activity feeds on itself: A rise in investment generates a boom, while a slowdown turns into a recession. The macro externality stems from ecodynamical interaction. The investment of one company is the particular demand facing other companies; it does not necessarily translate into a greater demand facing the company that made the initial investment.
There is one fundamental difference between the two kinds of non-ergodic feedback. The evolutionary trend exhibits a single unfolding of the potentiality of the underpinning technological/institutional regime of production. The betterment of one group, region, or historical period arises from the creation of new wealth. Nonergodic development involves a positive-sum game. In contrast, the Keynesian ecodynamical fluctuation around the trend necessarily exhibits a dual-track activity (bifurcation). The growth of one region or income class is accomplished by impoverishing another region or income class. Or the overshooting of output beyond potential GDP entails the undershooting of output in the following temporal sequence. The Keynesian nonergodic dynamics of bifurcated feedbacks are by definition symmetrical and, hence, amount to a zero-sum game.
Boulding (1985-86) recognized the ecological/evolutionary dichotomy of theoretical tools. He would probably be ready to admit the limits of the ecodynamical view. It simply cannot explain the change of the fundamental technological/institutional regime of production. At best, it is about the ecodynamical change around the trend. Likewise, the evolutionary approach cannot account for the ecodynamical fluctuation of the market. The ecodynamical and evolutionary tools of analysis are distinct since they deal with different aspects of economic activity. Boulding has bequeathed for us, inter alia, the ever-pressing burden of resisting the temptation to allow one theoretical tool to swallow the other.
1 Chaos theory, which focuses on sudden discontinuities, has even recently attracted the attention of some historians (Reisch, 1991; Roth, 1992; Beyerchen, 1992/93; cf. Khalil, 1995b).
2 To be clear, evolutionary biology should not be identified exclusively with the neo-Darwinian approach--as much as economics should not be delimited by the neoclassical paradigm. Evolutionary theory encompasses other traditions such as the neo-Lamarckian, developmental, autopoiesis, and structuralist ones (Khalil, 1993a, 1993b).
3 While the term "ecodynamics" is awkward, it is more appropriate than "ecological economics." The latter term has been appropriated by economists who apply the laws of thermodynamics and matter/energy influx, rather than the maximization of preferences, to the study of the interface of the economy and the environment. While Boulding (1966) is one of the founders of ecological economics, the subject matter of ecological economics is different from the modeling of the internal dynamics of the economy as an ecosystem.
4 In an encyclopedic volume, James Miller (1978) reviews the cross-level invariance of functions of organizations. He identified nineteen functions across seven levels of organizations. The suggested seven levels consist of the cell, organ, organism, group, organization, society, and supranational system. The nineteen functions include the reproducer, boundary, ingestor, distributor, converter, producer, matter-energy storage, extruder, motor, supporter, input transducer, internal transducer, channel/net, decoder, associator, memory, decider, encoder, and output transducer. For instance, the boundary function is performed at the seven levels, respectively, by the cell membrane, capsule of viscus, skin, sergeant-at-arms, and guards at the other levels. In the same order, the decider function is performed by the regulator gene, sympathetic fiber of the sinoatrial node of the heart, part of the cerebral cortex, head of family, executive office, national government, and council of ministers or government of supranational state. Thus, there are no functions at higher levels of organization that do not have parallel existence, even in a rudimentary fashion, at lower levels. This can be taken to mean, which cannot be demonstrated here, that there are no emergent novelties as we travel from lower to higher organizations. Instead, we witness the abstract elaboration of functions that can be found, although in more primordial forms, at lower levels.
5 I elaborate elsewhere on the distinction between the two phenomena that invoke the two kinds of theoretical tools (Khalil, 1990a, 1992, 1995b, 1996c). One phenomenon, called "natural complex," is about organizations such as firms and states and their developmental processes. The other, dubbed "natural system," is about structures such as market equilibrating patterns and their ecodynamics over time.
6 Friedrich Hayek also equates organizations with artifacts in his dichotomy between spontaneous order (cosmos) such as markets and designed order (taxis) in which he lumped firms, artifacts, and socialist economies (see Khalil, 1996b).
7 To be clear, neo-Darwinian theorists generally distinguish between the "unit of evolution," such as the population genetic pool, and the "unit of selection," which is debatable--whether it is exclusively the gene (Richard Dawkins) or it also includes the organism (Ernst Mayr), and further encompasses the group of organisms (David Wilson and Elliott Sober). But the distinction is specific to the neo-Darwinian framework and should not concern us here.
8 Stated briefly, there are two main views on the definition of species, the biological species concept and the morphological species concept. The former, identified with Ernst Mayr (1987), classifies organisms as part of the same species if they interbreed successfully. Obviously the definition runs into problems when it comes up against asexually reproducing species, conspecific organisms that are separated by geography, and fossil organisms (see Sreshefsky, 1992). In contrast, the morphological species concept (also known as the classical or typological concept), traced to Linnaeus (Carl von Linne), classifies organisms according to their apparent similarities. Obviously this runs into troubles when there is sharp sexual dimorphism (males look very different from females), when organisms belong to subspecies of same species, and when organisms belong to different species but have very similar morphology.
9 Four decades after the publication of A Reconstruction of Economics, Boulding writes:
[T]he reconstruction [was] around two major theses. One was that capital was more important than income, especially from the point of view of the household, where the use of household capital is much more important than consumption.
The second reconstruction was a macroeconomic theory of profits, originating from Keynes' Treatise on Money and his concept of the "widow's cruse." This is what in later years I came to call the "K Theory," as it originates in the work of Keynes, Kalecki, Kaldor, and Kenneth (myself). [Boulding, 1989c, p. 376; see Boulding, 1985, p. 5; Rimmer, 1989]
10 However, I dispute strongly whether the entropic degradation as described by the second law of thermodynamics fits in this category. I believe, but cannot demonstrate here, that the entropic change belongs to the irreversible category (Khalil, 1990b).
11 In this light, Krugman's (1991) appeal to the work of Brian Arthur's increasing returns is misguided. While both are interested in path-dependent change, Arthur and North are concerned as well with the evolutionary process of technological trajectory, not with the spontaneous rise of market structures.
12 Although David Levine, incidently, mistook his theory of the business cycle for a theory of capital accumulation (Khalil, 1987).
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