Self-organization

The question examined in this chapter is how individuals are to be looked upon when we understand them as self-organizing systems. This perspective is associated with a view of the economic world as an evolutionary system of change rather than as a static structure of unchanging relationships. This change in perspective places new emphasis on an issue central to understanding what individuals are: how they are to be reidentified in systems of change that affect themselves as well as the world they occupy. We have already encountered this issue in connection with the analysis of present bias in behavioral economics, because there people fail to act rationally because they do not behave as the selfsame individuals through time. In that case, the reidentification issue is narrower, because the world itself is not treated in an evolutionary way but is seen as a stable backdrop – indeed, one in which policy makers believe they can determine what rationality requires, and thereby make it possible for people to act “as if” they are single individuals through time. Clearly, things are significantly more complicated in an evolutionary world in which both individuals and the world are constantly changing. This chapter then argues that an alternative line of thinking in recent economics beginning in the 1950s with Simon – who rejected Edwards’ Behavioral Decision Research view of what psychology brings to economics – takes this more comprehensive view of change in economic life and produces an individual conception, which I term an evolutionary-relational conception, that makes a key contribution to our thinking about individuals in the form of the idea that they are self-organizing systems.

How individuals can change and paradoxically still be reidentified as the selfsame individuals, all in a world that is also changing, is not a question that has been central to evolutionary economics. Rather, the focus there has been on how thinking in evolutionary terms changes our understanding of entire social economic systems. This more aggregative perspective may reserve a role for individuals in general, but often has little to offer regarding what happens to specific individuals in evolutionary processes. For example, most of evolutionary game theory sets aside the question of particular individuals’ persistence to focus on the persistence of types of individuals, as inspired by the classic hawks and doves game (cf. Maynard Smith 1982); and Joseph Schumpeter’s use of the idea of creative destruction describes turnover in the population of individual entrepreneurs as a consequence of their actions as a type of agent in capitalist economies (Schumpeter 1942). However, this perspective seems incomplete, because if types of individuals endure in evolutionary processes, then individuals of those types must also endure, at least to some degree. Thus, I suggest that a more complete evolutionary economics also needs to explain the nature of individuals in evolutionary systems, which requires addressing the basis on which they may be said to endure, if this can indeed be argued.