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Post-WWII relationships between economics and biology
Historiography has placed Armen Alchian's "Uncertainty, Evolution, and Economic Theory" (1950) at the crossroads of two methodological epi-sodes: the epilogue of the marginalist controversy and the rebirth of evolu-tionary theories in economics. For some, Alchian's was one of the last con-tributions to the marginal analysis controversy, which started with Robert Hall and Charles Hitch's (1939) argument that businessmen do not deter-mine price according to the prescription of the marginal analysis, but use instead a rule of thumb based on the full costs of production. This result triggered a long series of counterarguments and rejoinders, in particular by Richard Lester (1946) and Fritz Machlup (1946). Alchian's argument in the 1950 paper presents itself as a defense of marginal analysis. Alchian from the participants in the Young Scholar session of the European Society for the History of Economic Thought meetings, Strasbourg, July 2007. I thank Béatrice Cherrier and Philip Mirowski for providing me with a copy of the Alchian-Friedman correspondence, and Alice E. Obrecht for her kind assistance in the tran-scription of Alchian's interview. All remaining errors are mine.
This paper aims at bridging a gap between the history of American animal behavior studies and the history of sociobiology. In the post-war period, ecology, comparative psychology and ethology were all investigating animal societies, using different approaches ranging from fieldwork to laboratory studies. We argue that this disunity in “practices of place” (Kohler, Robert E. Landscapes & Labscapes: Exploring the Lab-Field Border in Biology. Chicago: University of Chicago Press, 2002) explains the attempts of dialogue between those three fields and early calls for unity through “sociobiology” by J. Paul Scott. In turn, tensions between the naturalist tradition and the rising reductionist approach in biology provide an original background for a history of Edward Wilson’s own version of sociobiology, much beyond the William Hamilton’s papers (Journal of Theoretical Biology 7: 1–16, 17–52, 1964) usually considered as its key antecedent. Naturalists were in a defensive position in the geography of the fields studying animal behavior, and in reaction were a driving force behind the various projects of synthesis called “sociobiology”.
We highlight the double nature of the relationships between economics and biology, which leads to a double appreciation of these interdisciplinary exchanges. On the one hand, some economists perceived their work as consisting primarily in the development of a research method (a « constitutive metaphor ») rather than of a definite subject matter. Disciplinary frontiers appeared then to be relatively arbitrary and analogies between economic and biological models meant that the metaphor had a wide reach. On the other hand, a number of economists were interested in biology because it supplied concepts that were useful to advance the understanding of pre-identified economic problems. Interdisciplinary relations were valued according to this criterion and contacts with biologists were not further pursued. This weaker link between economics and biology led to more fruitful results, because of its intradisciplinary foundations in problems with a more obvious empirical dimension.
Today, Alchian's "Uncertainty, evolution and economic theory" (1950) is hailed by evolutionary economists as a most important piece, which resumed an evolutionary brand of theorizing in economics after the eclipse of the interwar period. On the other hand, Alchian's article is also cherished by standard economists who consider it to be a powerful defense of the maximization principle in the theory of the firm. Our examination of the early intellectual life of Alchian shows that it was his involvement in military systems analysis at the Rand Corporation that led him to reckon that uncertainty was a fundamental obstacle to marginal analysis. We then demonstrate that Alchian's economic natural selection is a statistical argument which, if phrased in biological parlance, owes its logic to statistical mechanics. This invites to reconsider the strong opposition usually made between evolutionist and mechanist modes of thinking.
Argument The heuristic value of evolutionary biology for economics is still much under debate. We suggest that in addition to analytical considerations, socio-cultural values can well be at stake in this issue. To demonstrate it, we use a historical case and focus on the criticism of biological analogies in the theory of the firm formulated by economist Edith Penrose in postwar United States. We find that in addition to the analytical arguments developed in her paper, she perceived that biological analogies were suspect of a conservative bias – as in social Darwinism. We explain this perception by documenting the broader context of Edith Penrose's personal and professional evolution, from her student days at Berkeley to her defense of Owen Lattimore against McCarthyism. We conclude that in the case under study at least, science and values were certainly intertwined in accounting for her skepticism towards biological analogies – insight we develop in the conclusion about today's relationships between biology and economics.