«Making economics more relevant: an interview with Geoffrey Hodgson GEOFFREY M. HODGSON (Watford, England, 1946) is research professor at the ...»
Similar arguments apply when we move to social evolution. The overarching framework is just that: it does not provide the detailed answers. You get explanatory value out of it by adding particularities— particular mechanisms, particular contexts, particular processes—within that framework. The important thing is that the framework helps us to understand key processes in a very complex situation. With varied interacting agents we can see though the tangled mess and identify some key processes at work. Among other things, we need to understand how business firms evolve and how human institutions interact with the natural environment. The agenda is potentially huge.
In which sense is your recent work on generalized Darwinism an elaboration or a generalization of your earlier writings on evolution?
That is, the move from evolution to generalized Darwinism, is it just a terminological modification or does it imply major conceptual differences as well?
As early as the 1980s, Veblen influenced me greatly in terms of incorporating Darwinian and evolutionary ideas. I was surprised to discover that evolutionary economics had a different conception of what evolution meant and the Darwinism issue was mostly on the fringes. For example, in their 1982 book An evolutionary theory of economic change, Richard Nelson and Sidney Winter mention Darwin once in passing, and not for any analytical insight. They list a whole series of intellectual mentors but Darwin is not one of them. As another example, take the USA-based Association for Evolutionary Economics. I learned that the ‘evolution’ in their title does not mean Darwinism, despite their declared Veblenian origins and affinities. It simply means development. And when the International Schumpeter Association was formed in 1988, and announced the Journal of Evolutionary Economics, ‘evolution’ meant Schumpeter more than Darwin. Schumpeter himself however makes little reference to, or use of, Darwin.
It was rather strange that evolution suddenly reappeared in the social sciences, and in economics in particular, and yet it was unclear what it meant and the prominent Darwinian meaning was sidelined. My 1993 book Economics and evolution asked: What does this term mean
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GEOFFREY HODGSON / INTERVIEWand on what grounds might it be adopted in social science? As case studies in that book I look at Schumpeter, Veblen, Hayek, and others. I did not argue there for a generalized Darwinism framework—I became persuaded by that shortly afterwards. Various people, including Daniel Dennett (1995), triggered my fascination with that line of inquiry.
I have been interested in evolutionary ideas for a long time, but I always wanted to know what this term meant. I find that Darwinism provides us with the only satisfactory general framework for understanding the kind of processes we are looking at in human society over the long term.
There seems to be a current trend in social science of borrowing ideas and concepts from biology, such as Darwinism. Do you think that biology can be a fruitful source of ideas for the social sciences, and are there further biological ideas and concepts that you find particularly interesting?
I am with Alfred Marshall here. He saw biology as the Mecca of the economist. Biology is important for the social sciences because in both cases we have highly complex, variegated, interacting systems. The success of scientific explanation in biology, in its highly complex domain, is a lesson for economists.
But that does not mean that we should slavishly imitate everything we find out in biology. There are lots of analogies that do not work.
There is nothing in society like the gene: the way replicators work in the social domain is very different from genes and other biological replicators. They both pass on information from entity to entity, but the mechanisms and the nature of that information are very different. We should not collapse economics into biology either by slavish imitation or by believing that biology offers the key to understanding everything social. Far from it. We have a lot of interesting work to do concerning biological influences on human behaviour but we still have to explain things partially in terms of culture and institutions.
So there are limits to biology as well. Another limit, which people often mistakenly raise as an objection, is that humans have important capacities which are absent in other species: deliberation, conscious prefiguration, intersubjective understanding, conjecturing what others think and intend, and trying to anticipate their behaviour through such conjectures. All this means that humans are special and the abstract apparatus of generalized Darwinism is inadequate. We have to build into VOLUME 3, ISSUE 2, AUTUMN 2010 84
GEOFFREY HODGSON / INTERVIEWthat framework additional assumptions that are specific to human society. Here we learn much more from social theory, philosophy, psychology, and anthropology. Those answers become vitally important.
So the extremely important observation that humans are different in terms of their mental capacities has to be taken into account in the evolutionary analysis. But this does not mean that you throw Darwinism out of the window. It means that you have to incorporate additional, more specific theories into its framework.
Could there be other inspirations from biology that are not yet exploited? Surely yes! One of my PhD students is working on the notion of niche construction. He takes the idea from biology, looks at the biological debates, and develops a taxonomy of different uses of the term and sees whether they are applicable to business niche construction. He compares preceding theories of the firm and observes that they often downplay relevant processes of interaction between businesses and their environment. So we can get inspiration of all sorts from biology. But generalizing Darwinism is not dependent on raiding everything from the biological store. We can often get insights from other sciences too. We can get insight from anthropology, complex systems theory, and even from some forms of mathematics. This is a way that science progresses: by combining ideas from different domains, synthesizing them, and obtaining new understandings.
Unlike many other institutionalist economists you have been sensitive to methodological questions throughout your work. For example you have written extensively on the issue of methodological individualism (Hodgson 1986; 2007). Is there a danger that a multidisciplinary account such as you just suggested will lead to a whole variety of serious methodological difficulties?
I will respond on methodological individualism and then answer your question on methodological problems. In 2007 I published an article on methodological individualism in the Journal of Economic Methodology. I argue there that everyone in the social sciences, as far as we are aware, ends up explaining social phenomena in terms of both individuals and relations between individuals. Kenneth Arrow says much the same thing in the American Economic Review (1994). For Arrow, even general equilibrium explanations involve structured relations between agents.
We know of no exception to this rule. We always have to explain in terms of individuals and relations among individuals. When social
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GEOFFREY HODGSON / INTERVIEWtheorists mention structure they mean relations between individuals. So every successful explanation in the social sciences involves some combination of individuals and structures. There are forms of Marxism where individuals are pushed out of the picture. But structure alone cannot explain things, and anyway without individuals there can be no structure.
Methodological individualists are extremely shady and imprecise about what they mean by the term. There are several definitions of methodological individualism and some protagonists shift from one meaning to another. I ask a methodological individualist: Do you believe that explanations can and should be in terms of individuals alone? Or do you believe explanations can and should be in term of individuals and relations between individuals? If they are foolish enough to take the first option—involving individuals alone—then I say: Please show me one successful example of such an explanation. So far I have not been shown one.
Concerning the second option, my argument is: Why call this methodological individualism? There are two explanatory elements in this story which are both foundational: individuals and relations between individuals. So, if you call it methodological individualism you are stressing half of the story. A structuralist could call this methodological structuralism and be equally in error. It is an equal bias, in the opposite direction. Both would be wrong. They would commit the same error of stressing one explanatory element and not the other.
Should we follow Joseph Agassi (1975) and call it institutionalist individualism? Here I question why one term is a noun and the other an adjective. Why not individualist institutionalism? Again the symmetry of explanatory elements, ‘institutional individualism’ is biased in its choice of adjective and noun. Overall, methodological individualism suffers from a deep ambiguity. By saying precisely what it means we can get rid of a lot of fog and confusion. We can transcend silly debates which are caught up in ambiguity and may have other agendas behind them.
You ask what problems we face as institutionalists in understanding institutions from a methodological point of view. Following work in that area in the 1980s and 1990s involving Anthony Giddens, Roy Bashkar and others, a key question is the relation between the individual agent and social structure, and in what sense there is mutual determination of one by the other. But social theory has become unpopular because it is perceived to have got down in the wrong kind of issues, methodological VOLUME 3, ISSUE 2, AUTUMN 2010 86
GEOFFREY HODGSON / INTERVIEWindividualism being an example. I think that this rejection of social theory is over-hasty and mistaken. Many sociologists and social scientists said: ‘A plague on both houses! This is getting us nowhere! Let us escape from this mess and just build models, gather data or whatever’. That is a foolhardy reaction, because neither theory nor empirics are possible without implicit or explicit methodological underpinnings. I think a number of critics have observed that when people try to ditch these issues they end up bringing them in through the backdoor. We cannot escape from these fundamental problems of social science.
I argue that evolutionary theory helps us in this area too. Some social theorists offer a model of the social world where agents just appear with beliefs. They may give us a rich story about interaction between agents, mutually constitutive agents and structures, and agents facing constraints bequeathed by history. All this is important, but they give us an inadequate account of the origins and development of the human agent. They commit the same error as Marxism, omitting a causal account of agency itself. There is here an evolutionary story in terms of the development of the individual—how individuals have developed in particular cultural and institutional settings—and there is an evolutionary story about how these dispositions are transmitted, genetically and otherwise, through time. Marxists, critical realists, and many other social scientists ignore that.
We have been talking already about the fragmentation of institutional economics. On the one hand, there is certainly a lot of epistemic plausibility to the idea of exploring a problem from different points of view, and few people would object to pluralism in some form. On the other hand, I have the concern that this pluralism has a potentially problematic downside with respect to achieving cumulative progress in the field, both theoretically and empirically. Do you see any danger of this sort and, if so, how do you think it should be dealt with?
Some people are against pluralism. Some economists define their subject in a way which excludes whole domains of alternative inquiry and alternative methodologies. But let us move on to your main question. When the pluralism debate was reignited in the mid 1990s, I was a participant. There was a conference in Bergamo in Italy. Uskali Mäki, Sheila Dow, Wade Hands and others participated. A book, Pluralism in economics, edited by Andrea Salanati and Ernesto Screpanti
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GEOFFREY HODGSON / INTERVIEW(1997), came out of it. Several contributions in that book made the point that there is an ambiguity in the concept of pluralism. Does it refer to pluralism in the mind of a single individual, or to pluralism in the academy? People seemingly unaware of these earlier contributions—and of that book in particular—have reiterated the same point over and over again that was raised right at the beginning.
My view is that pluralism in a single head is a recipe for nonsense, because if you hold contradictory ideas then you can logically crank out all sorts of absurd propositions. So I am not some kind of new-age philosopher who believes that you can get on with conflicting ideas. We do have conflicting ideas, but we have to try and reconcile them. Science sometimes adopts different assumptions in different domains. But eventually scientists have to worry about that, as economists worried about the discrepancy between general equilibrium and Keynesian theory. They resolved that in a wrong way, but nevertheless they were right to worry about it. So pluralism in a single head is something to be fought against and overcome. I am against that kind of pluralism. Even if I may be inconsistent sometimes myself, I would like to be corrected and to move towards a consistent position.
But I am in favour of pluralism in the academy. Pluralism there is important for making progress in science. Without a variety of views, everyone is locked into one groupthink way of seeing the world, and things do not change. We know from the history of science that things change when someone brings in new ideas and these clash with the old.