ArticlePDF Available

Abstract and Figures

We propose a new approach to evolutionary socio-economic dynamics base around competition between five "utopias" as central ideas about which to order society: capitalism, socialism, civil liberties, nature and nationalism. In our model, citizens contribute economic resources to support their preferred utopia, ans social dynamics are explained as a co-evolutionary process between these competing utopias. We apply the model to analyze aspects of socio-economic and political change in the US during the second half of the 20th C (1960s-present). Applications for theoretical and empirical research are suggested.
This content is subject to copyright. Terms and conditions apply.
REGULAR ARTICLE
The economics of utopia: a co-evolutionary model
of ideas, citizenship and socio-political change
Isabel Almudi
1
&Francisco Fatas-Villafranca
1
&
Luis R. Izquierdo
2
&Jason Potts
3
Published online: 6 June 2017
#Springer-Verlag Berlin Heidelberg 2017
Abstract We propose a new history-friendly approach to evolutionary socio-economic
dynamics based around competition between five utopiasas central ideas about which to
order society: capitalism, socialism, civil liberty, nature, and nationalism. In our model,
citizens contribute economic resources to support their preferred utopia, and societal
dynamics are explained as a co-evolutionary process between these competing utopias.
We apply the model to analyze certain aspects of socio-economic and political change in the
US from the 1960spresent. We carry out a history-friendly analysis inspired by such
episodes as the outbreak of civil movements in the 1970s, the rise of neo-liberalism in the
1980s, and the channels through which America has engendered an age of fracture.Further
applications for empirical and theoretical research are suggested.
Keywords Utopia .Citizen .Subsystem .Political economy .Co-evolutionary modeling
JEL classifications B52 .O57 .P16 .P51 .Z10
J Evol Econ (2017) 27:629662
DOI 10.1007/s00191-017-0507-7
Supplementary material: https://luis-r-izquierdo.github.io/utopia
The reader can replicate all simulation results presented in this paper by using the computer program provided
in the supplementary material. This program can be run using NetLogo (Wilensky, 1999).
Wilensky, U. (1999). NetLogo. http://ccl.northwestern.edu/netlogo/. Center for Connected Learning and
Computer-Based Modeling, Northwestern University. Evanston, IL., open source software available at
http://ccl.northwestern.edu/netlogo for free.
*Jason Potts
jason.potts@rmit.edu.au
1
University of Zaragoza, Zaragoza, Spain
2
University of Burgos, Burgos, Spain
3
RMIT University, Melbourne, Australia
1 Introduction
The standard way to develop a more history-friendly economic model is to embed economic
actions within a broader context of institutions, politics, government, culture or the natural
environment. This constructs a more realistic economic model by imposing institutional,
political, cultural or environmental constraints on all economic agents (Denzau and North
1994; Beland and Cox 2011; Leighton and Lopez 2013; Acemoglu and Robinson 2013;
Rodrik 2014). In this paper we propose an alternative approach in which these constraints do
not appear independently or universally, but are first understood as competing idease.g.
the idea of the free market, the idea of state control, the idea of civil liberty or group rights,
the idea of nature, and so forth. We assume that competing ideas on the good societyas
alternative sets of guiding principles and values regarding the priority of the role of the state,
the dominion of nature, the market economy, the management of common problems, or the
expression of group identity, or what we call utopiaswill appear to each individual as a
dominated rank ordering. Each agent conceives a utopia as a society in which their preferred
idea is indeed the dominant one. The extent to which the agent contributes economic
resources to advance that utopia against competing utopias is the measure of their activity
as a citizen.
We propose a new analytic approach to the evolution of socio-political and economic
systemsan evolutionary political economyby exploring the co-evolutionary dynamics
of competing utopias. In this framework economic, social and political institutions are
dynamic evolutionary consequences of competing utopias, or ideas about the rank ordering
of the good society and the willingness of citizens to back these ideas with their own
economic resources. In a market utopia, for example, the ideas of private property, free
enterprise and profit as an objective indicator of success are the dominant ordering principles
in society, and those of the state, civil liberty, culture and/or the environment are subordi-
nated. In an environmental utopia, the idea of nature is the dominant ordering principle in
society, with the state, civil liberty, culture and the market subordinated. In this context, we
assume that individual economic agents make differential contributions of effort and
economic resources in pursuit of their own conception of a utopia, defined as a world in
which one of those ideas dominates the other ideas. To the extent that one idea can dominate
another as a social ordering principle, then utopias compete. Each agent conceives their own
utopia, but the extent to which they contribute to that utopia with effort, time, money and
other resources, and thereby benefit others pursuing a similar utopia, may differ. By
choosing a utopia, and then committing effort and resources to it, each citizen plays a role
in the co-evolutionary process of utopia competition. Thus, preferences over ideas (which
coevolve with socio-institutional change) as ordering principles define utopias, and citizens
uneven contributions to distinct utopias generate utopia competition. This approach thereby
furnishes both a co-evolutionary theory of societal, political and institutional evolution as
idea-competition, and an evolutionary theory of the economic agent as a citizen.
To formalize our approach, a co-evolutionary replicator dynamics model is developed in
Section 3. In Section 4we undertake a history-friendly computational analysis (Malerba
et al. 1999,2016) that draws upon historical facts from the US during 1960spresent. This
analysis develops a recent idea-centered view of history by Montgomery and Chirot (2015)
who identify four main ideas that have shaped the modern world, plus an anti-enlightenment
movement; a total of five ideas. These are the utopias we use in our model. We implicitly
assume that ideas and institutions co-evolve through feedback processes, but the line of
630 Almudi I. et al.
causality in our model runs from the succession of ideas to corresponding changes in social
structures. This is why we focus on utopia competition as a key driver of social change. Our
history-friendly analysis uses historical analysis of the evolution of American socio-political
and economic ideas during the last five decades to parameterize a robust representative
setting from which we run the model and reproduce the rise of market-oriented ideas and the
erosion of fundamentalist thinking in the US. Our model also indicates how these processes
emerged and developed. In addition, the robustness analysis of the results, and the additional
analysis in the Appendix, point out to certain factors that suggest future research lines.
Section 5summarizes some of these suggested lines of progress when we consider our
present model as a benchmark step. Section 6concludes by making the case for evolutionary
political economy as a new analytic approach to historical analysis.
2 New concepts: Ideas, citizens, utopias and subsystems
Using evolutionary economic theory and models (Metcalfe 1998; Malerba et al. 2001), we
present a wholly new approach to political economy built around the concept of citizen as an
economic agent that may foster (to a higher or lower degree) the diffusion of specific ideas
regarding the good society. These ideas define different utopias that compete through a co-
evolutionary dynamic process. Our approach departs from standard models of political
economy in several fundamental ways. First, we eschew Social Choice economics (Arrow
1951;Sen1970,1999;Taylor2005) where collective outcomes derive from preference
aggregation and axiomatic bargaining theory. Instead, our co-evolutionary model derives
macro outcomes from group competition and population dynamics.
Second, we eschew Public Choice economics in which political institutions are
conceptualized as markets (Downs 1957; Buchanan and Tollison 1984). Our approach
is not based around voting mechanisms (cf. Buchanan and Tullock 1962;Caplan2007),
and the essential role of a citizen is not that they vote, but their propensity to contribute
effort and resources to the ideas that govern and shape society, and furthermore to shape
the ideas of others. Thus our approach is based around idea (or utopia) competition
(Keynes 1936, Leighton and Lopez 2013).
Third, our approach is also not Institutional, in either the habits and routines sense
(Veblen 1898, Commons 1934, Hodgson 2015), or the rules of the game sense (North
1990; Williamson 2000), or in the sense of historical exegesis or circumstance (North and
Weingast 1989; Acemoglu and Robinson 2012). Instead, we conceive of the ordering
principles of society as emerging from a complex systems conception of governing ideas,
as in Boulding (1978) and Gowdy (1994). These co-evolving guiding ideas, or alternative
utopias, ultimately would engender the resulting productive activities, organizations and
institutions. In our model, citizens are economic agents that contribute resources to the
development of their particularly chosen utopia. Our new approach to political economy
develops a framework in which agents are both economic actors and citizens.
It is clear that our approach to political economy is not standard. There are two
interrelated questions here: why do we seek a new non-standard approach, and how do
we justify these new concepts? Both questions have the same answer: namely, we seek to
develop a political economy centered on the evolution of competing ideas,
1
as the ordering
1
Ideas at this scale are constitutional meso-rules (Dopfer et al. 2004;Potts2007; Dopfer and Potts 2008).
Economics of Utopia: A co-evolutionary model 631
principles of a society, which ultimately bring about the corresponding institutional changes.
An idea-centered view of history is not new to economic history and political economy
(Keynes 1936, Hayek 1960, Rodgers 2011, Leighton and Lopez 2013). However the
specific formulation we work with is from Montgomery and Chirot (2015), who characterize
modernity in four big ideas that they associate with: Adam Smith (on free markets), Karl
Marx (on collective property), Charles Darwin (on nature and evolution), and the debates
between Thomas Jefferson and Alexander Hamilton (on democracy and civil liberty). They
contrast this with the anti-enlightenment responses of nationalism, religion and other cultural
group-based ideas.
For the purposes of this paper, as inspired by Montgomery and Chirot (2015), we
consider five subsystems, each expressing a fundamental idea as an organizing princi-
ple of society: viz. a market subsystem (M); a state subsystem (S); a civil liberties
subsystem (L); a group identity subsystem (G); and a nature subsystem (N).
2
Later we
will refer to Π= {M, S, L, G, N} as the set of all five subsystems.
A group identity utopiawhich we denote as subsystem Gis atavistic and based on
in-group preferences, whether these derive from religion, ethnicity or nationalism (e.g. see
Kohn 1944;Mosca1939, for oligarchies). A free-market utopiasubsystem Mis the
idea of order arising from individual pursuit of value through exchange. Montgomery and
Chirot (2015) associate this with the ideas of Adam Smith as expressed with the values of
economic liberalism. A civil liberties utopiawhichwedenoteassubsystemLis
associated with civil society-led collective action. Montgomery and Chirot (2015)asso-
ciate this with the debates at the founding of the US constitution between Thomas
Jefferson and Alexander Hamilton. A state utopiasubsystem Sis the expression of
centralist order and communal property, which Montgomery and Chirot (2015) associate
with the ideas of Karl Marx. A nature utopiasubsystem Nis a conception of man as
part of nature and therefore subject to natural forces, which Montgomery and Chirot
(2015) associate with the ideas of Charles Darwin.Thesefiveareabroadset,covering:
pecuniary coordination (M), communal property (S), civil liberties (L), human systems as
part of nature (N), and human identity groups (G). As a first pass, these are the major
ordering principles of society. Additionally, as Montgomery and Chirot point out, we
consider that once an idea emerges, it can generate variations around the prior original
conception (what we call the initial core-ideas). To be specific, we assume that the core-
ideas in each subsystem are: the Market utopia moves around private property, individual
self-interest, market efficient allocation of resources and price coordination mechanisms;
the State utopia focuses on commitment to communal ownership and public property
rights, centralized allocation and equality; the Civil Liberty utopia deals with the origins of
the Social Contract, civil activism, the emergence of democratic Constitutions and the
Institutions involved; the Group Identity utopia rests on identity similarities and the
resistance to change, the status quo, traditions; and finally the Nature utopia deals with
the relationships between humans and nature and the process of natural selection. In
Section 4we identify for each utopia two variations around the initial core ideas (a weaker
and a stronger version surrounding the core). Therefore, we assume that citizens not only
choose a specific utopia to contribute to, but also position themselves in one of the three
2
This particular set of five is somewhat arbitrary there could be more or fewer. Our economic actor/citizen is
(directly or indirectly) affected by the state of all of the subsystems but, as citizen, our agents seek to promote
one of these subsystems in preference to others.
632 Almudi I. et al.
possible branches of the utopia, modulating their contribution and commitment (between
low, medium and high contribution levels). Specifically, we assume that low efforts
corresponds to adherence to the weaker version of the utopia; medium efforts correspond
to the citizen identification with the core ideas; and high efforts represent identification
with the stronger version of the utopia.
Finally, we assume that citizens get changing payoffs from
3
(Fatas-Villafranca et al.
2011):
(i) Their own contribution to the favored subsystem/utopia (a good for the citizen)
(ii) The state of the favored subsystem (the perception of being effective in their
supporting actions increases the agentssatisfaction)
(iii) An externality derived from other agents contributions to their utopia. Includes
positive and negative externalities, depending on perceptions of stronger or
weaker commitment from peers. Heterogeneous boundedly-rational citizens as-
sess whether they are contributing too much (bearing excessive opportunity
costs), or too little (benefiting from more committed peers which defend common
core-ideas, but also being at risk of their utopia losing social prominence).
Competitive citizenship through differential contributions to ideas affects the inter-
nal and inter-systemic evolution of subsystems, thus shaping economic payoffs. In turn,
citizens can revise their degrees of contribution, and even they can change their
supported utopia as they observe the chosen utopias, contributions and pay-offs of
other citizens. In this way, they influence the relative size, power and presence of
different worldviews in the overall socio-economic system. We use this approach to
propose a theory of socio-economic dynamics and change that can be traced through
the differential citizen involvement in and contribution to competing subsystems.
An idea-centered view of history need not imply a philosophical or rational tourna-
ment to determine truth. Rather, it can be formulated as an evolutionary economic
process if agents direct resources to support and develop their utopia, and seek to
persuade others to abandon their utopias and join theirs. This is not simply to assume
that preferences are endogenous and that institutions evolve. It is to seek to formulate a
specific mechanism by which both evolutionary preference dynamics and evolutionary
institutional dynamics are outcomes of a deeper process of idea dynamics, which we
formulate as a co-evolutionary competition between ideas through the agency of
citizens making contributions toward their utopia.
3Themodel
3.1 Citizenship and subsystems
We develop a multi-population dynamics model driven by differential citizen contri-
butions to one of five utopias, or subsystems. The agent is characterized in our model
by their degree of citizenship when promoting their chosen utopia (with citizenship
3
In Fatas-Villafranca et al. (2011), 2009) we revise the behavioral economics and psychology literature upon
which we draw to pose our changing-payoff functions, and our formal updating proposal (below).
Economics of Utopia: A co-evolutionary model 633
capturing lower-to-higher intensity of engagement with the pure-core ideas of the
selected utopia; higher adherence leads the citizen to allocate more resources to utopia
promotion). This degree of citizenship may be represented by the proportion of their
total resources (including money, time, effort) devoted to fostering their desired utopia
at time t.
4
To simplify, we suppose that citizens position themselves in one of three
discrete settings: low (x
1
), medium (x
2
)orhigh(x
3
) levels of contribution, such that 0 <
x
1
<x
2
<x
3
< 1. To further simplify, we assume that (x
1
,x
2
,x
3
) are identical in all
subsystems. The total population of citizens in a subsystem is distributed among these
three alternative behavioral patterns at any time. For each subsystem πΠat t,with
Π= {M, S, L, G, N}, let sπ
it be the share of citizens within subsystem πwhose level of
contribution is x
i
. For example, among the citizens contributing to the market utopia, sM
1t
is the share of those whose level of contribution is x
1
.Naturally,0sπ
it 1, and isπ
it ¼1
for all πΠ.
3.2 Citizen payoff
We include gains and (implicitly) costs in each citizens payoff. This payoff depends
on: (i) the level of individual citizenship; (ii) the relative size in society of the citizens
favored subsystem, a motivation akin to strongly-partisan citizen utility; (iii) a double-
externality effect (through which citizens feel bad, or on the contrary, they benefit from
other citizens being less committed, or more committed in support of the corresponding
social utopia). Citizen payoff functions capture lower to higher levels of permeability to
these externalities. This relative sensitivity to partisan-motivations vs externalities turns
out to be a key parameter in the model (see below and Appendix).
Regarding (i), we assume that the level of participation, engagement and commit-
ment in pursuit of a utopia through political, civil and social discussions, participation
and actions is an endogenous source of utility for each citizen, and is thus in effect a
consumption good. This assumption is consistent with intrinsic motivation theory (Frey
1997,2001; Ryan and Deci 2000) in which individuals have goals that motivate actions
in the belief that they are intrinsically good. But the assumption is also consistent with
an extrinsic motivation where citizens care about their social reputation among those
who share a similar sense of identity (Akerlof and Kranton 2000).
With respect to factor (ii), it is clear that agents devote their resources and ideas to
improve, reinforce, and extend the utopia associated with their favored subsystem e.g.
building up new organizations and institutions that support the utopiasideals,
appearing in the mass media, and in shaping other citizensminds. Thus we propose
that when the favored utopia increases its relative size and presence in society (gaining
supporters), this represents a source of satisfaction for the agent (a perception of self-
realization and efficiency in action). As we will see, this partisan motivation may be
mild or strong.
Regarding (iii), we incorporate the opportunity cost of citizenship into the payoff.
Less-committed peers erode a citizens utility by their lower adherence to the core-
utopian principles, while more-committed peers contribute to their utility. As explained
4
It is difficult to calibrate and measure the level of effortin effective terms, since it is composed of
observable (time, financial and material resources) and non-observable (e.g. personal abilities, effort, skills,
connections, knowledge) variables.
634 Almudi I. et al.
in Fatas-Villafranca et al. (2009), Fatas-Villafranca et al. 2011), we assume local
externalities since behavioral and cognitive proximity are crucial when agents
payoffs are shaped by the behavior of others. A simple way to capture these
local effects is by adding a double-local externality component to the citizen
payoff. Thus, more committed peers generate a positive externality on others,
whereas less committed peers generate a feeling of opportunism or, somehow, a
negative externality in more committed ones. We incorporate a parameter
regulating the relative intensity of these local externalities (permeability to local
intra-subsystem commitment). Formally, we can represent effects (i) to (iii)
above in the following payoff functions uπ
it for citizens within subsystem π
whose level of contribution is x
i
:
uπ
1t¼γπ
t1φðÞþφsπ
2t

x1
uπ
2t¼γπ
t1φðÞþφsπ
3tsπ
1t

x2
uπ
3t¼γπ
t1φðÞþφsπ
2t

x3
ð1Þ
where γπ
tis the share of subsystem πΠ(proportion of supporters) in society
(so 0γπ
t1, and πΠγπ
t¼1), and parameter φ[0, 1] captures the intensity
of the externality effect (permeability to peers behavior and opinion). This
parameter incorporates a certain bias in citizen payoff regarding strong-
partisan motivations (low φ) vs high permeability to local externalities (high
φ). We can see in (1) how citizens behaving in a specific way perceive
(positive or negative) local externalities from more or less committed peers
(see Fatas-Villafranca et al. 2009,2011).
In addition, we can define the average level of citizenship within each subsystem as
xπ
t¼isπ
itxi. The average payoff within each subsystem at tis uπ
t¼isπ
ituπ
it.
Finally, it is clear that, the average level of citizenship in society at twill be
xt¼πΠγπ
txπ
t.
3.3 Intra-subsystemic evolution
Citizens in our model can endogenously change their level of citizenship in pursuit of a
utopia, and they can also choose a different utopia. Consider first a change in the level
of citizen contribution. We have assumed that citizens within each subsystem are
heterogeneous in behavior (commitment levels) and receive a specific payoff attached
to their contribution level. In cases where citizens perceive that they may benefit from
changing their levels of contribution, we expect agents to update their behavior. More
precisely, fπ
ij denotes the rate at which citizens contributing x
j
switch to behavior x
i
(within subsystem π) in pursuit of more satisfactory behavioral patterns. The switching
rate is:
fπ
ij ¼θmax uπ
iuπ
j;0

;θ>0
where θ> 0 captures the ease of this behavioral change. We assume that, given the
valuation criteria in (1), when a citizen from behavioral group imeets another from J
within subsystem π, she discovers the possibility of adopting behavior x
j
. Then, by
comparing her present satisfaction uπ
iwith the level uπ
jenjoyable in case of contrib-
uting x
j
, the citizen may decide changing behavior. We are considering boundedly-
Economics of Utopia: A co-evolutionary model 635
rational citizens that gradually move in the direction of an endogenously-changing,
non-unique, higher-valuation. If we assume that δsπ
isπ
j

;δ0;1ðÞgives the prob-
ability for a random and independent interaction between one citizen with contribution i
(share in the population sπ
i) and other one with behavior j(share sπ
jÞin a small interval
Δt,the flow of citizens from jto iwould be given by (Hofbauer and Sigmund 1998):
δsπ
isπ
jfπ
ijΔt
and the change in the proportion of citizens with behavior x
i
would be:
Δsπ
i¼jδsπ
isπ
jfπ
ijfπ
ji

Δt
where
fπ
ijfπ
ji ¼θuπ
iuπ
j

Therefore, the continuous time-evolution of the proportion of citizens with contri-
bution imay be described by the equation (Fatas-Villafranca et al. 2011):
dsπ
i
dt ¼jδsπ
isπ
jfπ
ijfπ
ji

¼δsπ
ijsπ
jθuπ
iuπ
j

¼θδsπ
iuπ
i−∑jsπ
juπ
j

Thus, we can represent the evolving intra-subsystem distribution of citizen contri-
butions by the replicator dynamics system:
sπ
it
˙
¼sπ
it uπ
it uπ
t

i;πΠð2Þ
This intra-subsystemic dynamics (from which changing distributions of behavioral
patterns, and different trajectories for the average level of citizenship emerge) operate
as a social learning mechanism for the five subsystems (utopias) that co-exist in (2).
3.4 Inter-subsystemic dynamics and co-evolution
We assume now that subsystems (utopias) with strong citizen support, and higher than
average citizen commitment/pro-utopian action, will gain relative presence in society.
More precisely, we close our co-evolution model by proposing a replicator system of
five differential equations, coupled in a bi-directional way with systems (2) above,
5
which can be written as follows:
γπ
t
˙
¼γπ
txπ
txt

πΠð3Þ
To explain the coupled dynamics, let us note that, from (2), different paths for the
average level of citizenship within each subsystem xπ
t¼isπ
itxiemerge. These paths
determine the dynamics in (3) in such a way that subsystems with xπ
t>xt,thatis,
utopias with higher than average citizen support, tend to gain relative presence in
5
See Hofbauer and Sigmund (1998) and Almudi et al. (2012) for analysis of coupled dynamic systems.
636 Almudi I. et al.
society (γπ
t
˙
>0 in (3)). Thus, we are considering that citizens may change their utopia
since they live in a society in which different levels of utopia support co-exist, and
utopias with higher than average support (xπ
t>xt) attract supporters ðγπ
t
˙
>0Þ.
In turn, notice that increasing (or decreasing) relative social presence γπ
t

influ-
ences the intra-subsystem payoffs in (1) and, thus, condition the intra-utopian dynamics
in (2); which, again, influences the inter-subsystem dynamics (3); and so on. These
coupled dynamic systems generate an emergent pattern of transformation and socio-
political change. The Appendix to this paper provides further details on the mechanics
of the model and shows the type of emergent results that we may expect. As we will see
(in Section 4and the Appendix), as a result of this co-evolutionary process, the relative
social presence of each utopia will endogenously change and we can obtain evolving
trajectories with different profiles (smoothness towards conformity; fluctuating evolu-
tions; permanence of different utopias; etc.). In the following section, we carry out a
history-friendly analysis of the model. We provide supporting results in the Appendix
for many of the socio-economic interpretations and results presented in Section 4.
4 History-friendly simulations for the US
Given the nonlinear and complex nature of the model, we carry out a first approach to
the study the model dynamics by performing a representative experiment modeled on
US society through the second half of the twentieth Century. We follow the History-
Friendly methodology described in Malerba et al. (1999,2001,2008,2016). In 4.1, we
describe the core-ideas, origins and structure of the five subsystems (utopias) that
compose our model as guidelines for our case study. In 4.2, we delineate initial settings
departing from historical sources for the US. We run the simulations and present
intervals of robustness for the results. The general trends that our model generates
from the robust initial setting qualitatively fit with the corresponding historical facts. In
4.3, we show that, even though we depart from a specific (i.e. history-friendly) initial
setting, there is a wide neighborhood of parameter values and initial conditions for
which the same results apply. We also present counterfactual results and partial formal
results (in Appendix) that suggest future research lines.
4.1 A brief history of utopia competition in the US
We define five specific utopias as systems of concepts, beliefs and bodies of thought
eventually materialized in real structures that have shaped the modern world and,
specifically, American society. These utopias will correspond to the five subsystems
(populations of citizens supporting the same utopia) in our model. We argue that, within
each utopia, we can specify three different interpretations of the core-ideas (from mild,
to strong interpretations and adherence to the core), which can be assimilated to our
model degrees of commitment (i.e. lower to higher degrees of citizen contribution and
adherence to the core corresponding to mild efforts/adherence x
1
, medium effort/
adherence x
2
, and high citizen adherence and utopian contribution x
3
).
As Montgomery and Chirot (2015) explain, once an embryonic set of utopian ideas
appears, we observe the dynamic configuration of interpretations of these ideas. Thus
the Market utopia focuses on private property, individual self-interest, efficient
Economics of Utopia: A co-evolutionary model 637
allocation of resources and price coordination mechanisms (this is the core that can be
defended and pursued with lower to higher intensity x
1
<x
2
<x
3
); the State utopia
focuses on commitment to communal ownership and public property rights, centralized
allocation and equality; the Civil Liberty utopia deals with the origins of the Social
Contract, civil activism, the emergence of democratic Constitutions and the Institutions
involved; the Group Identity utopia focuses on identity similarities and the resistance to
change, the status quo, traditions (with variants); and finally, the Nature utopia deals
with the relationships between humans and nature and the process of natural selection.
In each utopia, we will start by delineating what we consider the embryonic original
ideas leading to the utopian core, and, then, two different developments and interpre-
tations of said ideas. The different interpretations correspond to citizen intensities of
commitment and promotional efforts regarding the core utopian ideas ( 0 < x
1
<x
2
<x
3
< 1). In all the utopias we identify the highest level of commitment (x
3
)withthe
strongest adherence and support (effort, resources etc) for the pure-core ideas; the
medium level (x
2
) for the mid-interpretations and support of core ideas; and low level
(x
1
) with mild interpretations of core ideas.
Market utopia For the free-market utopia, we find the embryonic and mid-core ideas
in Smith-like classical thinking according to which the self-interest of men can be
trusted as a fair and productive way to allocate resources and organize society.
Individual self-interest, entrepreneurship and spontaneous market order (the invisible
hand) were deemed better than central governments or privileged (ancient-regime)
social strata to manage the economy. We can identify Smithian ideas with our x
2
(medium embryonic/original degree) of commitment to the free-market utopia; in fact,
although classical liberalism believed in markets as self-regulating and moral systems
of social organization, they were not laissez fairedoctrinaires. They detected an
elastic range of activities where authorities and non-pecuniary motivations should
operate.
We believe that two (almost opposite) interpretations of this mid-core classical idea
have emerged and diffused (to different rates and through different channels)
during modern US history (Harvey 2005). The first is Keynesianism (which we
associate with a weak level x
1
of commitment with free market ideas). Inspired
by the Great Depression, a stream of thinking that starts with Keynes develops
through economic theorists such as Tobin, Samuelson, Krugman and Stiglitz,
who defend market societies but caution that markets can fail and aggregate
demand can be weak, and so governments can re-equilibrate and stabilize
economies by stimulating demand and fixing market failures. They also ad-
vance the idea that market economies require international political cooperation
and financial regulation.
The second development of classical liberalism that we detect in the US is the
emergence of strong supporters of the pure-core ideas of individual economic freedom,
rationality, market optimality and perfect order. We refer to Friedman (1962), Hayek
(1960), and other Chicago School economists of the free-market utopia. This level of
attachment to the free-market vision claims that almost everything central authorities
could do with respect to prices, allocations and economic life (except protecting the rule
of law, private property and maintain a stable currency) is socially harmful. This can be
assimilated to our level x
3
maximum-strong support of the free market utopia: a stream
638 Almudi I. et al.
of thought which displayed very strong individual efforts and citizen commitment to
promote free-markets, and which is often related to neo-liberalism.
State utopia Another core body of modern thinking traces back to the ideas of Marx.
This trend of thought argues that capitalism tends towards overproduction, unevenly
distributed wealth and unavoidable unemployment. It is argued that the capitalist
owners of the means of production seek to exploit the working class proletariat. The
envisioned utopian solution for this unfair situation rests on abolishing private property
through a communistic revolution. Then, communal property, the sharing of the means
of production, and the industrial advances would allow everyone to develop their
human potential. We assimilate this Marxist view of collective property with our
medium level (see below) of support x
2
for the state utopia.
A mild version of these core ideas (that we represent by x
1
) would be reformist
socialist parties and (trade) unionism. For these organizations, capitalism does not
inevitably impoverish the proletariat but can be gradually reformed (without revolution)
towards an equalitarian centralized society. By 1914, the leading socialist parties and
labor movements in Europe and in the US had moved Marxist ideas toward peaceful
social action, in the US culminating in Roosevelts New Deal programs established in
the 1930s. On the other side, the most pure (extreme) version of the communitarian-
statist utopia (x
3
), can be found around the Lenin-Bolshevik-Stalinist orientation and its
influences all over the world. A tightly controlled intelligentsia, and a perception of a
way to the Marxist-best-world through repression, led to a path that combined the
socialist-centralized-equalitarian future, with the use of strong efforts to erode enemies.
Montgomery and Chirot (2015), and Lipset and Marks (2000) discuss why socialist
ideas failed in the US.
Civil liberties utopia The idea underlying this utopia is that fundamental rights and
individual freedoms in general are consubstantial to human beings. These human
fundamentals should be limited only through unanimous constitutional agreements to
facilitate common coexistence through collective choice mechanisms. The center-core
issues around this utopia are related to the Institutional forms a society should adopt in
order to guarantee the aforementioned fundamental freedoms. The Jefferson-Hamilton
debates represent an embryonic core which we relate to an intermediate position with
respect to the role that government should have in limiting individual liberties. This
position may correspond in our model with a level of citizen commitment with a
libertarian utopia x
2
. The strongest version of this utopia (x
3
) would be the anarchism
ideals, since they strongly held the idea of self-governed societies with a very weak
state, or even in the limit state-less societies, and voluntary institutions and civil
organizations. Finally, the mild version of this utopia could be associated with the
defense of a Central Democratic State which seeks to limit and control individual
freedoms, as for example in France, in order to achieve an adequate coexistence in
society, while seeking to defend human fundamentals. This mild level of commitment
with civil-liberty is represented in our model by x
1
.
Group identity utopias Citizens who pursue collective utopias consider that belong-
ing to the same imagined communities(Anderson 1983) and preserving common
beliefs and traditional values, particularly those associated with group identity (e.g.
Economics of Utopia: A co-evolutionary model 639
ethnic, religious, national, cultural), are the core of civilized human action (Mitchell
1996). Nevertheless, in-group/out-group distinctions, a deep aspect of human evolu-
tionary heritage (Bowles and Gintis 2011), can be a matter of degree. Drawing on the
typical definition of traditional-nationalism, people ruled by the same state are really
part of a large family sharing a common culture, values, traditions and even (occasion-
ally mythic) common ancestry (Kohn 1944). This nationalism can be identified (as we
will justify) with a medium level of commitment and effort x
2
. Extreme feelings of
identity group, together with a large resistance to change can result in forms of
Fundamentalism (x
3
in our model). Finally, smaller groups of reference with specific
singularities, that normally try to defend their status quo in society, can be assimilated
to forms of elitism (oligarchies, Mosca 1939). This would concentrate around a low
level of group identity x
1
.
Natural or environmental utopia DarwinsOrigin of Species definitively changed
relations between humans and nature. His theory posed that all living organisms on
Earth share a common ancestor, and all are all subject to natural selection. The core idea
is that those better-adapted forms of life increase their probability of survival.
Increasing adaptation to the environment implies further possibilities for kinship to
continue. We can identify these core ideas with a moderate (mid) level of commitment
with natural selection and the survival of the fittest (x
2
).Coming from evolutionary
theory two almost opposite strands emerge. The first argues that rational humans can
invent sophisticated solutions for natural and social problems. Science and reason can
overcome the natural selection process by literally shaping nature, with human societies
being the most sophisticated product of evolution capable of controlling even nature
itself (Montgomery and Chirot 2015). We call this strand Scientism with a very strong
support of the primacy of the fittest (x
3
). A second strand argues that humans are small
in the universe and their imagined capacity to control nature is hubris. This is
Environmentalism x
1
6
. A map of the five main utopias in US society is in Table 1.
4.2 The US case: From the Great society to the age of fracture
In this section, we delineate a history-friendly initial setting (Malerba et al. 1999)that
represents the co-existence of different utopias in the US during the 1960s in a stylized
way. We justify and propose the setting and then, by running the model from this initial
scenario, we obtain time paths that are qualitatively consistent with the evolution of
American utopias during the past four decades. Analysis of these results within our co-
evolution model allows us to reflect on possible driving forces of Americasrecent
social change. The initial setting is not a unique representative point; on the contrary,
we can define a wide neighborhood of values for parameters and initial conditions
around the initial setting for which the simulated process holds. So our results are
robust to significant changes in initial conditions and parameters that qualitatively fit
the historical departure point (see robustness analysis in section 4.3 below).
6
On the key influence of Darwinian ideas in political and philosophical thought, see Dewey (1910) and Jones
(1980).
640 Almudi I. et al.
The 1960s in the US saw burgeoning diversity, intense socio-political creativity, and mass
collective action in many realms of American life (Rodgers 2011;Watson2000). Table 2
illustrates what US President Lyndon Johnson called the Great Societyis composed of
traits of freedom, equality, liberation, democracy and nature that are, when taken together,
well balanced through a significant presence of different ideas.
7
Sociologists and political
theorists widely report that US society has evolved during the last four to five decades
towards a more fluid and atomistic contemporary society in which market models govern
social and political discussions about a wide range of concerns (Abbot 2005; Fukuyama
1992,2006; Huntington 1996;LipsetandMarks2000;Sennett1998). This is not to say that
the US have evolved into a paradigm of free-market liberalismclearly it has notbut
rather that market ideas, whether promoted or opposed, are a dominant organizing principle
for political and social discourse and analysis. Concepts of efficiency, rational choice and
consumer society have widely colonized sociology and policy studies (Becker 1993; Downs
1957). The historian Daniel Rodgers (2011) argues that US society has over this period
followed a path increasingly dissolved into its utility-maximizing atomistic parts, a process
he calls the age of fracture. To synthesize the features of the 1960s (initial setting), we
consider Table 2.
Note that in Table 2the civil-liberties (L) utopia prevails (γL
0¼0:3), with the market
(M) and the traditionalist group identity utopia (G) representing γM
0¼0:25 and γG
0
¼0:2 of the total population respectively. Although at a lower scale, environmental (N)
and even pro-statist (S) utopias were also significant at that time. We also consider that
the levels of effort and commitment were such that everybody devoted from 10 to 30%
of personal resources to a specific worldview (i.e. x
1
=0.1;x
2
=0.2;x
3
=0.3).Wedo
not bias the intensity of intra-subsystemic externalities in the payoff functions (i.e. φ
=0.5). Admittedly, the values for the parameters shown in Table 2are somewhat
arbitrary. We include a robustness analysis in the next section to show that the same
qualitative results are obtained if many other values in the vicinity of those shown in
Tab le 2are employed. We now examine the intra-subsystem shares depicted in Table 2.
Market utopia The models and policy prescriptions of the Keynesian-Neoclassical
Synthesis were generally taught in most influential American Universities until the mid-
1970s. Paul SamuelsonsFoundations and his textbook Economics incorporated Keynesian
fundamentals into a Neoclassical scientifically modern framework. At the same time, the
Tinbergen Econometric project was fully developed to guide US macroeconomic policy
(developed by Klein, Tobin and Modigliani). In Table 2, we assign a 0.65 [0.55 + 0.1] intra-
subsystem share for American Keynesianism with moderate liberalism traces during the
7
Although we seek to provide a stylized representation in Table 2, Page and Shapiro (1992; Ch. 3-5) present
numerical info compatible with Table 2.
Tab l e 1 Utopias/Level of contribution and commitment to the core ideas
Citizen level Market State Civil Liberties Group Nature
x
1
(mild) Keynesians Socialism Centralism Elitism Environmentalism
x
2
(mid) Liberalism Marxism Jefferson Nationalism Darwinism
x
3
(strong) Neoliberalism Stalinism Anarchism Fundamentalism Scientism
Economics of Utopia: A co-evolutionary model 641
1960s. It is notable that during the 1960s, the neoliberal ideas that would dominate the last
quarter of the twentieth Century were already on the table (Harvey 2005). In fact, two highly
influential books of the 1980s were written in the 1960s: Constitution of Liberty (1960) by
Hayek and Capitalism and Freedom (1962) by Friedman. Initially, they did not gather many
followers, although an active embryonic proto-neoliberal mass around the Mont-Pelerin
Society, Frank Knights Chicago, and so on existed. It therefore seems reasonable to
instantiate a relatively small proportion of intra-subsystem support (0.35) to promoting
pro-market neo-liberalism in the 1960s.
State utopia The counterculture movement emerged during the 60s in the US pano-
rama. This meant that a refreshed Unionism, Socialism, and diverse forms of American
(pseudo) Marxism (intelligentsia in the University movements and so on) called to
action and spread across the country (Abbot 2005; Lipset and Marks 2000). We
represent the State utopia by considering 0.4 of (intra-subsystem) Socialism supporters,
0.35 of (pseudo) intellectual-Marxism defenders, and 0.25 radical pro-state supporters;
not much within a subsystem that represents 15% global opinion (see Table 2).
Civil liberties utopia The Cold War dominated the American political thinking of the
60s until the end of the 80s. Freedom and the defense of the Democratic System and
individual rights were both public and civic-social affairs (Fukuyama 2006; Sennett 1998).
Democracy and civil society activism were at the forefront of US society at that time. We
represent this situation in Table 2by assuming a significant share of US society defending
the Free-Democratic system as an envisioned form of the good societyin any of its forms,
Centralism or Federalism (intra-subsystem share 0.3 + 0.35). The 60s were also times of
radical political disruptions and civil society open demonstrations: new citizen movements
pro-civil rights, the anti-war and anti-nuclear movements, the gay liberation and anti-racial
segregation groups, the free school movement, feminism, and a range of counter-cultural
movements. These trends erupted from civil society in pursuit of new rights that defended
unprecedented anti-status quo views in America. We represent those liberty movements by a
share 0.35. Recall that we will show later that our simulation results are robust to significant
changes in Table 2initial setting.
Group identity utopia The Cold War also inoculated a strong sense of American
nationalism (Abbot 2005). We represent this by assuming that the Group utopia (G)
Tab l e 2 The great society - initial setting
S
10
S
20
S
30
γ
0
Market 0.55 0.10 0.35 0.25
Civil liberties 0.30 0.35 0.35 0.30
State 0.40 0.35 0.25 0.15
Group 0.35 0.35 0.30 0.20
Nature 0.35 0.30 0.35 0.10
x
1
x
2
x
3
φ
Market 0.1 0.2 0.3 0.5
642 Almudi I. et al.
holds 20% of social support, with nationalist supporters being 0.35 (intra-subsystem
share). At the same time, McCarthyism, which can be seen as a form of fundamental-
ism, was part of the American hidden politics of the 1960s and 70s - e.g. FBIssecret
COINTELPRO, Watergate and Iran-Contra scandals. Thus, we represent fundamental-
ism (essentially political but also reactionary US ideologies) in Table 2with an intra-
subsystem share of 0.30. We consider also 0.35 of oligarchy defenders.
Nature utopia The space race, with the Apollo project at the forefront, reached a
milestone with the 1969 Moon landings. Several space missions and an increased
interest in studying the outer space and, eventually, conquer it took place during the
1950s, 60s and 70s. These new realities even stimulated more the post-WWII pro-
rational science spirit so that we can assume a significant 0.35 of Scientist/Rationalist-
supporters within the Nature (N) strand. The conquest of space gave humanity for the
first time a new planetary view, which coincided and amplified the emergence of the
Environmental movement. Again, two books marked this period: Silent Spring (1962)
by Rachel Carson and the Limits to Growth (1972) by the Club of Rome (Meadows
et al. 1972). The World Wildlife Foundation was founded in 1961 and the
Environmental Protection Agency began in 1970. Nature clearly moved into the
socio-political arena at the 1960s. We have considered 0.35 of supporters for
Environmentalism, and 0.3 intra-subsystem share for mid-utopians (see section 4.1,
above).
If we consider Table 2as a plausible representation of the 60s American distribution
of utopias, what properties emerge in our model? Can we find explanations for the sub-
processes underlying the historically-observed emergent trends? How plausible and
sensitive are the properties that we obtain? By running the model from Table 2we
obtain the time evolutions shown in Figs. 1and 2.
As can be seen in Table 2and Fig. 1, society departs from a reasonably balanced
situation in utopias. Figure 1shows that the State utopia declines since the beginning,
whereas the market utopia starts declining, but only for a short time. The Nature utopia,
Group identity and pro-civil liberties supporters begin gaining share in society, but this
turns out to be just a transitory evolution. And this happens at a time in which free-
market support seems to decline for a while. The rise of the Libertarian utopia
accelerates during a significant lapse of time, but the declines of Nature and Group
utopias open a space for the Market utopia. Then, a contest between Civil Liberties
Utopia and Market Utopia is accompanied and driven by an intensified degree of
Fig. 1 The triumph of the market
Economics of Utopia: A co-evolutionary model 643
commitment and debate in society (see Fig. 2). Finally, the Market society eventually
triumphs with a final decline in the social degree of citizenship.
To understand the sub-processes underlying the global trends in Figs. 1and 2,weshowin
Fig. 3the (Market intra-subsystem) struggle between Keynesians and Neoliberals (e.g. the
1970s, the crisis of Keynesian thought and the intense influence of Neoliberals from the
1980s to the mid 90s, and the prevalence of Chicago School positions in theoretical and
policy realms). In terms of the model, Fig. 3shows the defeat of old-Keynesians (sM
1t)
leading to the temporary victory of radical free-Market ideas (sM
3t) (e.g. the rational expec-
tations revolution and RBC models in the 1970s; Reaganism; Thatcherism; Supply-side
economics and the cascade of Chicago Nobel Laureates through the mid-90s). Nevertheless,
as we can observe in Fig. 3, a new emerging synthesis led by intermediate intellectual
positions from the mid 90s onwards (sM
2t) (e.g. MIT scholars and doctrines, New-Keynesian
models of mainstream inspiration, IMF and monetary policy in the 2000s) arise and ends up
being the Market utopia consolidator in Fig. 1. Notice in Fig. 3the decrease in the path sM
1t
slowly first and inexorable thereafter, the increase of sM
3twith a rapid phase of decline
afterwards, and the slow rise in sM
2t.
If we interpret now Fig. 3at the light of Eq. (1) and the dynamics (2), we find that,
despite of the initial Keynesian pre-eminence, according to our model, the dominant
position (in terms of higher initial pay-off) was not Keynesianism, but Neo-liberalism.
As we show in Fig. 4, Keynesianism and, even more so, moderate liberal positions,
generated a low pay-off. Why?
To understand Fig. 4, we consider the expression of pay-off functions (1) for the
market case uM
it .Crucially,the externality component is highly favorable for neolib-
erals.
8
Also notice, on the one hand, that the global intra-market debate is very
polarized. A high initial proportion of Keynesians are not very committed to the market
they have low ×1- and extract a low uM
10 from that source. Keynesians also get low
positive externalities from moderate influences, i.e. low sM
20.Keynesiansgenerateno
erosion on the neoliberalspay-off, since both groups are too distant in the ideas arena;
therefore, Keynesians do not affect directly uM
30. On the other hand, neoliberals are not
challenged strongly in the proximity of their ideas low value for sM
20; they are not
eroded by debate with moderate pro-markets. In addition, they are committed to the
8
See the initial intra-subsystem shares in Table 2withalowvaluefor sM
20; this implies that the neoliberal mass
can develop in its niche with almost no direct challenge from close-moderate positions; they perceive a very
low negative externality from sM
20.
0.10
0.15
0.20
0.25
0.30
0 20 40 60 80 100 120 140 160 180 200
x
t
t
Fig. 2 Average degree of citizenship and commitment in society (x
t
)
644 Almudi I. et al.
free-market utopia and enjoy a high and almost ever-increasing pay-off γ
t
(1 φ)x
3
.
This is consistent with the path uM
3t. According to Fig. 4, neoliberal success engenders,
through a positive local externality φsM
3tsM
1t

on moderate pro-markets, the rise of
uM
2tand the success of sM
2tin Fig. 3.
Does our simulation model fit reality? The late-1970s saw a crisis of ideas and the
loss of intellectual authority and influence of the Keynesian thesis, defenders and social
prescriptions. Some supporters were perceived as being only loosely connected to
market ideas and therefore receptive to socialist ideas.
9
Meanwhile, the success of
Monetarism analysis and practice, and the debate on the Phillips curve led by Friedman
and others created the conditions under which supply-side economics, individual
rationality, atomistic utilitarian and for-profit competition, market self-coordination,
and Pareto-optimality ideas appeared as the right way to reach social understanding and
the good society. Thus, during the 1980s, with almost no challenge from close
positions, policy recommendations of fresh-water New Classical Macroeconomics
and the Chicago school (inflation-targeted policies, constrained fiscal policies,
deregulation and liberalization) were supposed to lead the economy back to its natural
state. Nevertheless, the very strength of this new paradigm itself, together with crisis in
parts of the world (Latin-America and Transition economies) swung the Neoclassical
pro-market paradigm again into a rejuvenated moderate vision of imperfect markets,
price stickiness and information problems; this led to the medium-road new-saltwater
consensus of mainstream Neo-Keynesian/DSGE inspiration. Here we see a real story
close to the simulation results from Table 2.
Now, how to explain the decline in civil liberty ideals and civil society activism in
Fig. 1? To understand this process, we present the intra-subsystem dynamics of the
Libertarian utopia subsystem in Fig. 5.
In terms of Eqs. (1)and(2), there is an initial debate within the (L)-subsystem
between those supporting direct civil action, those in favor of medium Jeffersonian
ideals, and supporters of Democratic Centralism (Table 2). Centralists (i=1) are the
sub-group that ends up leading the way towards a (failed) Civil Liberty utopia (Fig. 5).
This seems to have been so in the US and in most Western nations. During several
decades, democracy has become a corporatist-bureaucratic version of itself increasingly
less committed to direct action and increasingly centralized. More precisely, as apparent
9
See the Mises-Keynesian debates on the viability of socialism, e.g. Paul Samuelsons failed predictions of
the future of the Soviet Union in the first edition of Economics.
0.00
0.20
0.40
0.60
0.80
1.00
0 20 40 60 80 100 120 140 160 180 200
sit
t
Market Subsystem
S2
s2t
s1t
M
M
s3t
M
M
Fig. 3 Intra-subsystem dynamics within the Market supporters
Economics of Utopia: A co-evolutionary model 645
in Figs. 5and 6, note both: (i) the rise of centralism that erodes through the negative
externality the attractiveness of Jeffersonism; and (ii) the decline of direct action
(sL
3tdecreases so that highly committed citizens lose size; thus, the positive-
externality they projected on mid-level Jeffersonians vanishes). Then, libertarians and
Jeffersonians decline, leaving the Centralist group as a weakly committed (L)-
supporter.
Note that the triumph of the Market subsystem (Fig. 1) emerges from an almost
opposite process, as described in Figs. 3and 4. Within the market utopia, extreme
neoliberal supporters beat weak pro-market Keynesians, injecting a net positive exter-
nality (high citizenship pro-market momentum) on renewed market moderates (group
2-supporters). This is enough to engender an average degree of effort for pro-market to
defeat pro-civil liberties supporters (L-supporters that, since almost the very beginning,
were the Centralists, see Fig. 6).
Finally, observe that the underlying dynamics corresponding to the decline of
Nature, State and Group identity are qualitatively similar to Figs. 5and 6. Under these
conditions, it is natural that people looking for freedom, individual self-realization, and
socio-energizing forces found a new expression in support of pro-market ideas. Market
supporters in the model show a much higher degree of commitment and promotion
dynamism than L-supporters. We depict this in Fig. 7below, which reveals the
stronger activism of pro-markets as compared with Demo-civil liberties sup-
porters. As Figs. 2and 7show, the latest phase of the simulation shows a
marked decline in citizen activism; it seems as if the market utopia (one
specific worldview) had consolidated its position (Fig. 1) generating a fluid
age of fracture, characterized by the atomistic decomposition of a US market-
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
0.18
0 20 40 60 80 100 120 140 160 180 200
uit
t
Market Subsystem
u2t
u1t
M
M
u3t
M
M
Fig. 4 Intra-subsystem pay-offs for Market supporters
Fig. 5 Intra-subsystem dynamics within the Civil Liberties (L) subsystem
646 Almudi I. et al.
driven society in which individual rationality, economic calculus and pecuniary
motivations prevail over deeper social fundamentals.
4.3 Robustness analysis.
In this Section we carry out a robustness analysis for the Great Society Scenario
(Table 2). Our objective is to show that our simulation results are not exclusive for
the specific parameter setting shown in Table 2; on the contrary, the same qualitative
results are obtained within a sizable set of parametric values. Naturally, to demonstrate
such a statement rigorously, first we must formally define what constitutes the same
qualitative resultsfor us. We consider that the essence of the dynamics observed in the
Great Society Scenariocan be summarized in the following two results:
&Result 1: The market subsystem prevails. Formally, we impose what we call
condition 1: t
1
such that γM
t1>0:999; i.e. at some point the Market subsystem
gains a support greater than 99.9%.
&Result 2: In the battle for dominance, the main competitor of the Market utopia is
the Civil Liberties utopia. Formally, we impose what we call condition 2: t
2
<t
1
such that γS
t2;γG
t2;γN
t2<0:05 and γM
t2;γL
t2>0:05; i.e. at some point before the
market utopia triumphs, the support for the State, the Group and the Nature utopias
all fall below 5% and, at the same time, the Market and the Civil Liberties utopias
both enjoy a support greater than 5%.
Fig. 6 Intra-subsystem pay-offs for Civil Liberties-supporters
0.10
0.15
0.20
0.25
0.30
0 20 40 60 80 100 120 140 160 180 200
x
t
t
xt
π
L
xt
M
Fig. 7 Market versus Civil Liberties degree of commitment
Economics of Utopia: A co-evolutionary model 647
The goal of the robustness analysis is to identify a wide range of parameter values
for which conditions 1 and 2 are satisfied. To do this, we conduct a one-factor-at-a-time
analysis first, and a multiple-factors-at-a-time subsequently.
4.3.1 One-factor-at-a-time robustness analysis
The one-factor-at-a-time experiment departs from the default values set in the Great
Society Scenario (Table 2) and consists in changing the value of each of the parameters
of the model, one at a time (i.e. whilst keeping all the others at their default value), in
order to compute the range of values for which the two conditions above remain valid.
Tab le 3shows the results for parameters sπ
i0and γπ
0.
Tab le 3shows, for each one of the 15 parameters sπ
i0and 5 parameters γπ
0, the range
of values within which conditions 1 and 2 prevail in the one-at-a-time experiment, and
the length of this range as a % of the maximum admissible range for that parameter
10
.It
is noteworthy how high these percentages are for most parameters.
We also conducted a one-at-a-time experiment for the other parameters {x
1
,x
2
,x
3
}
and φ. In order to explore a wide range of combinations of levels of contribution {x
1
,
x
2
,x
3
}, we define parameters αand βand use the formula: {x
1
,x
2
,x
3
}=α{1, (1 +
β), (1 + 2β)} to generate different combinations. Thus, parameter αregulates the
proportion of resources that society devotes to their ideals in general, whilst parameter
βregulates the differences in contributions between the different levels of commitment
in each Utopia. As an example, the contributions in the Great Society Scenario {x
1
,x
2
,
x
3
} = {0.1,0.2,0.3} correspond to values α=0.1, β=1.
The robustness of our simulation results to parameters αand βis complete, i.e. they
can take any value within the admissible range
11
(one at a time) and the simulation
results are qualitatively the same as in the Great Society Scenario.
12
The robustness of
the simulation results to parameter φis also very high, i.e. any value of φin the range
[0.19, 1] will lead to the same qualitative results as in the Great Society Scenario (see
Tab le 4). Note that all results stated up to know can be clarified and extended for the
more-formally oriented reader in the Appendix to the paper. We also refer to the
Appendix to complete the interpretation on some counter-factual findings below.
10
Note that there are a few constraints that must be taken into account when changing the values of the
paramete rs in Table 3, namely: isπ
i0¼1 for all πΠ,andπΠγπ
0¼1. To ensure that the restriction isk
i0
¼1 is maintained when adding a certain (positive or negative) value δto the default value sk
j0

DV
of any
parameter sk
j0, we subtract δ/2 from the default value sk
ij0

DV
of the other two parameters sk
ij0. Similarly,
when adding a certain (positive or negative) value δto the default value γk
0

DV of any γk
0, we subtract δ/4
from the default value γπk
0

DV of the other four parameters γπk
0so that the restriction πΠγπ
0¼1is
maintained. This procedure implies that the range of admissible values that can be explored for a particular sk
j0
is often smaller than [0,1], since we must also honor the conditions sk
ij00. To be precise, the admissible
range when changing a particular sk
j0is 0;sk
j0

DV þ2minisk
ij0

DV

. The same argument appli es for
γk
0and the conditions γπk
00. The admissible range when changing a particular γk
0is
0;γk
0

DV þ4miniγπk
0

DV
hi
.
11
Only values of αand βthat make 0 x
i
1 are admissible.
12
The effect of changing the value of αis merely a change in the time scale. This can be easily proved
analytically conducting a change of variable t
=α·t. The lowest value of βthat we have ch ecked is 10
5
.
648 Almudi I. et al.
As an example of a counter-factual finding, we show as an example a parameter
setting that does not generate the same qualitative results as the Great Society Scenario.
To do this, we change the value of φfrom 0.5 to 0.18 (see Figs. 8and 9). This
parameter suggests interesting counter-factual insights for our case (more on this in
Appendix): for any value of φ0.18 the Civil Liberties utopia dominates (keeping the
rest parameters at their default value).
Figures 8and 9show how, according to Eqs. (1), (2)and(3) in the model, for low
values of φ, the intense momentum reached by libertarian activities in the US 1960s
70s would have persisted and intensified, leading to a lower role for the market utopia
in society and a larger role for the L-subsystem. This is a counterfactual exercise that
exceeds the scope of this paper but suggests lines for future empirical research. On the
other side, the discussion in the Appendix may allow us to better understand the role of
parameter φ. It seems to be determinant in conditioning the prevalence of certain
utopias, and even the co-existence of diverse worldviews in the societal system
(see Appendix). Here, and to maintain the history-friendly tone of the paper, let
us just show that the dynamics of the model do not necessarily end up with
one single utopia dominating the others. Trivial cases where all utopias would
coexist include those where they are parameterized in the same way (their intra-
subsystemic dynamics are the same, and γπ
t¼0:2;t;πΠ).Butitisalso
possible to identify non-trivial scenarios where various utopias would coexist
with different degrees of support. Thus, Table 5shows a setting where the
number of utopias that coexist with stable (and different) degrees of support in the long
run is five (i.e. all) if φ= 0.02, four if φ= 0.03, three if φ= 0.04, two if φ= 0.05, only
Tab l e 3 One-factor-at-a-time Robustness Analysis
S
10
S
20
S
30
γ
0
[] % [] % [] % [] %
Market [0,
0.75]
100% [0,
0.26]
37% [0.21,
0.55]
62% [0.09,
0.65]
86%
Civil liberties [0.01,
0.62]
61% [0.10,
0.94]
88% [0.23,
0.75]
55% [0.19,
0.70]
73%
State [0.09,
0.90]
90% [0.16,
0.85]
81% [0,
0.46]
48% [0,
0.35]
64%
Group [0.13,
0.95]
86% [0.24,
0.92]
72% [0,
0.42]
42% [0,
0.31]
52%
Nature [0.07,
0.95]
93% [0.15,
0.93]
78% [0,
0.55]
58% [0,
0.23]
33%
Tab l e 4 Linear Robustness Analysis: α,β,φ
αβφ
[] %[] %[] %
(0, 1/3] 100% (0, 4.5] 100% [0.19, 1] 81%
Economics of Utopia: A co-evolutionary model 649
one (i.e. the Nature utopia) if φ= 0.07, and again only one, but a different one (i.e. the
Market utopia) if φ=0.1.
There are other scenarios where the dynamics never stabilize. As an example,
Fig. 10 shows the intra-subsystemic dynamics of any of the five utopias when they
all start with sπ
10;sπ
20;sπ
30

¼0:47;0:11;0:42
fg
and γπ
0¼0:2, and the levels of
contribution are {x
1
,x
2
,x
3
} = {0.1,0.2,0.3}.
4.3.2 Multiple-factors-at-a-time robustness analysis
Now consider a sizable neighborhood of parameter values around the Great Society
Scenario for which the same qualitative results (Conditions 1 and 2) are obtained. To
define this neighborhood, we have grouped all the model parameters into 5 sets: sπ
i0,γπ
0,
α,βand φ. In contrast with the one-at-a-time-factor, here we vary several parameter
values at the same time; we alter any one parameter value within each of the five groups
at the same time
13
.Table6shows parametric ranges within which Conditions 1 and 2
hold when (at most) one change within each of the 5 parameter groups is induced.
As an example, the following parameter setting would lead to results qualitatively
identical to the Great Society Scenario:
sM
10 ¼0:550:05 ¼0:5
(and consequently sM
20 ¼0:10 þ0:05
2¼0:125;sM
30 ¼0:35 þ0:05
2¼0:375)
γL
0¼0:30 þ0:05 ¼0:35
(and consequently γM
0¼0:250:05
4¼0:2375;γS
0¼0:150:05
4¼0:1375;
γG
0¼0:200:05
4¼0:1875;γN
0¼0:100:05
4¼0:0875)
&α= 0.2 and β=2
(and consequently {x
1
,x
2
,x
3
} = {0.2, 0.6, 1})
13
As explained before, any change in a parameter sπ
i0or γπ
0forces us to alter the value of other parameters to
ensure that the constraints isπ
i0¼1forallπΠ,andπΠγπ
0¼1 are preserved.
Fig. 8 Counterfactual run with φ=0.18 inTable2
650 Almudi I. et al.
&and φ=0.50.05 = 0.45.
Note that the variety of possible settings for which the qualitative results of
the Great Society Scenario hold is remarkably large. Focusing only on (e.g.)
possible levels of contributions, results are qualitatively the same for values: {x
1
,x
2
,
x
3
} = {0.001,0.002,0.003} (obtained with α= 0.001 and β=1), x1;x2;x3
fg
¼1
3;1
3;1

(obtained with α=1/3andβ=1),or{x
1
,x
2
,x
3
} = {0.05,0.15,0.25} (obtained with α=0.05
and β= 2). Thus, the results obtained for the Great Society Scenario are robust within a truly
sizable neighborhood of parameter settings.
4.4 Some general interpretations.
Before we move to the next section, here we provide an overall interpretation of the
model dynamics inspired by what we have obtained above, and the results in the
Appendix. This reflection does not seek to be exhaustive; we just intend to clarify
interpretations and suggest future theoretical research. Thus, considering what we said
in Sections 3and 4, and in the Appendix, it is clear that parameter φ, which fixes within
the citizen payoff (1) the bias between strong-utopian partisanism vs permeability to
externalities, plays a key role in the model. In the standard setting (Table 2)wechose
the intermediate value φ= 0.5. However, as we have seen, with high degrees of strong
utopian-partisan bias (low φ), more than one subsystem may engender a high average
degree of citizenship (especially those subsystems with high initial share, and a
Fig. 9 Counterfactual run φ= 0.18;intra-subsystem evolution of Civil Liberties Subsystem
Tab l e 5 Initial setting for different scenarios where various utopias can coexist with different degrees of
support, depending on the value of φ
S
10
S
20
S
30
γ
0
Market 0.30 0.30 0.40 0.20
Civil liberties 0.29 0.31 0.40 0.20
State 0.28 0.32 0.40 0.20
Group 0.27 0.33 0.40 0.20
Nature 0.26 0.34 0.40 0.20
x
1
x
2
x
3
0.1 0.2 0.3
Economics of Utopia: A co-evolutionary model 651
significant initial proportion of highly committed citizens), and they may end up co-
existing in society after a transition process (with equal levels of average commitment
in the stationary state; see Appendix). More complex behaviors emerge in the case of
high permeability to local externalities and relatively low partisan motivations (high φ).
In these cases, complex dynamics may emerge, since citizens are highly sensitive to
peers behavior and they revise (accordingly) their commitment level. Notice that, as in
this model intra-population revisions of behavior co-evolve with inter-population
changes, the overall dynamics are highly connected to the existence of convergence
to similar average levels of commitment among subsystems, see expression (3)
Section 3. For two or more utopias to co-exist, they must engender identical levels
of average citizenship.
5 Future developments
Having reached this point, we believe that our co-evolutionary approach to political
economy is congruent with previous works in evolutionary economics, and it may
inspire future research connecting this line of thought with evolutionary game theory,
agent-based stochastic models, and network theory. Let us devote this section to
suggest possible future developments of our model along these lines.
Firstly, let us anticipate that the complete mathematical exploration (even in this
simple version) of the model is a highly challenging (although extremely interesting)
task. As we have seen in the Appendix, population dynamics methods and evolutionary
Fig. 10 Example of unstable intra-subsystemic dynamics
Tab l e 6 General Robustn ess Analysis
S
10
S
20
S
30
γ
0
Market 0.55 ± 0.05 0.10 ± 0.05 0.35 ± 0.05 0.25 ± 0.05
Civil liberties 0.30 ± 0.05 0.35 ± 0.05 0.35 ± 0.05 0.30 ± 0.05
State 0.40 ± 0.05 0.35 ± 0.05 0.25 ± 0.05 0.15 ± 0.05
Group 0.35 ± 0.05 0.35 ± 0.05 0.30 ± 0.05 0.20 ± 0.05
Nature 0.35 ± 0.05 0.30 ± 0.05 0.35 ± 0.05 0.10 ± 0.05
αβφ
(0, 1/3] [1, 2] 0.5 ± 0.05
652 Almudi I. et al.
games machinery for large-multiple populations in co-evolving settings might be
combined to extract results. But it is not simple at all. In fact, notice that although
our present model is simple (almost intuitive) in its representation of reality, it displays
multiple equilibria and qualitatively different (often complex) dynamics, because of the
multiple (positive/negative and local/global) feedbacks that it includes. As we have
proved in previous works (Fatas-Villafranca et al. 2007,2009,2011), even analyzing
the (much simpler cases) of fully isolated intra-subsystem dynamics, the mathematics
were highly challenging, and the results surprising and complex. Regarding our present
co-evolution model, it is remarkable how the simple combination of intra-
subsystem deterministic dynamics, just by linking them through a simple (but
in the center of co-evolution) replicator process, generates intriguing, complex
and non-trivial dynamic outcomes. We believe that our model is an exemplar of
simple (non-complicated) but intrinsically complex model. Complexity arises
from co-evolution and positive/negative feedbacks at local/global levels. Thus, a
suggested path for future research (not only in political economy, but also in
traditional evolutionary approaches to innovation and industrial dynamics) may
consist of coming up with stylized and simple evolutionary representations of
different phenomena (Metcalfe 1998; Vega-Redondo 1996), and then, including
pertinent local positive/negative feedbacks and co-evolutionary mechanisms, so
that the resulting structure may be addressable from the most innovative
machinery in population dynamics theory (Sandholm 2010). New results to
deal with deterministic and stochastic evolutionary models of this type have
appeared during the last decade (Almudi et al. 2013).
Secondly, as in recent parallel efforts in evolutionary economics to deal with macroeco-
nomic issues through agent-based models (e.g. Dosi et al. 2010), the history-friendly spirit of
our model could be preserved (ála Malerba et al. (2016)) and even moved forward
(following Di Guilmi et al. (2017)) by applying the Master Equation (ME) methodology
to obtain results in so-called granular models -with heterogeneous agents, interactions
among meso-subsystems, stochasticity and aggregate emergent properties. The ME meth-
odology draws basically on a differential equation for the probability distribution of the
underlying process (which represents the development of a domain-specific granular system,
as stated above); then, two methodological approaches exist: it is possible to either approx-
imate solutions as computed by (e.g.) Aoki (1996), or, alternatively, the ME can be used to
identify the moments of the corresponding stochastic process. In both cases, political
economy issues inspired by our current model could be addressed, and emergent macro-
dynamics (average levels of contributions, persistence of diversity in the socio-political
realm, etc.) would be obtained from granular micro-foundations involving uncertainty,
heterogeneity and scattered interactions. This line of progress is clearly comparable with
our model assumptions and results.
Finally, it seems possible to develop our modeling proposal along the lines of the
theory of complex social networks (Vega-Redondo 2008). Our current model incorpo-
rates incentives and pay-offs, gradual and ongoing interactions among heterogeneous
agents that may update their positions as time goes by, and local/global interactions
driving the emergent dynamics. As Jackson (2008) suggests, these are good wickers on
which we can start building up random networks with economic meaning, small world-
structures, scale-free networks and even multilayer networks, where distinct layers
could correspond to alternative utopian views, and diffusion/search along and across
Economics of Utopia: A co-evolutionary model 653
layers would engender dynamics comparable to the ones we obtained. We believe that
the combined use of these suggested lines of progress could promote the theoretical
development of evolutionary political economy by establishing bidirectional links with
complexity theory,networks,statistical physics and evolutionary games. In any case,
for the time being, we just suggest these fascinating alternatives as possible avenues of
advance which follow from our stylized history-friendly co-evolution model as a
benchmark for future studies.
6 Conclusions
We have introduced a new history-friendly modeling approach to the study of
long run societal transformations as the outcome of high-level competition
between ideas that furnish the overarching ordering principles of a society
(Montgomery and Chirot 2015). We have called these utopias, and characterize
our approach as that of co-evolutionary utopia competition, which is an emer-
gent outcome of differential citizen support and economic contribution. We have
set out the underlying analytical model, and illustrated this with a stylized case study of
the rise of free-market liberalism in the US, and the relative defeat of socialist and other
utopias. In Almudi et al. (2017), we use the same approach to examine the rise of
environmentalism in the context of climate change.
By specifying a socio-economic order as made of subsystems, a utopia as a
preference for the dominance of a particular subsystem, and citizenship as the agents
private contribution to a subsystem, we have developed a replicator-dynamics model to
study historical patterns of idea-competition. Our co-evolutionary subsystems-based
model of long-run historical economic change differs from the broad suite of institu-
tional approaches since our approach is built around an agent of change the economic
actor as a citizen engaged in idea competition, drawing upon their own economic
resources. We can thus characterize indices of historical change in support of ideas, as
we have illustrated with our vignettes on US societal transformations. This approach
models ideas as engaged in evolutionary competition, and maps this to not only agents
choosing to support different utopias, but also to choose their level of contribution,
which we represent in three discrete levels (low, medium and high). This enables us to
(qualitatively) check the plausibility of our model with respect to certain historical facts
of the US society.
We believe this offers a useful extension of the history-friendly approach into the domain
of big-history and of the recent turn toward idea-centered history. We further suggest this
approach may be useful in seeking to integrate evolutionary political economy with both a
richer conception of the economic agent as a citizen, and also an endogenous approach to
institutional dynamics. We have also suggested possible formal developments from our
current work. In fact, we believe that our proposed model may be considered as a first
prototype in formal evolutionary political economy against which future developments, with
more complex idea-topologies, could be added.
Acknowledgements We would like to thank Daniel Chirot, J. Stan Metcalfe, Scott Montgomery and
Richard R. Nelson for their very helpful comments on previous versions of this work. We also thank two
anonymous referees.
654 Almudi I. et al.
Appendix
In this appendix, we present further insights on the intra-subsystemic dynamics of the
model, and on the way these dynamics co-evolve giving rise to the overall dynamics of
utopia competition. The exhaustive mathematical exploration of the model goes beyond
the scope of this paper. Nevertheless, we want to highlight here some possible lines of
progress in the formal exploration; likewise, we present certain results which clarify the
mechanisms supporting our socio-economic insights in Section 4. We do not incorpo-
rate these results in Section 4because, perhaps, they might interrupt the history-friendly
style of discussion of the paper.
As we show in this Appendix, it is interesting to note that, although we have
presented the model as a co-evolution framework that contributes to evolution-
ary political economy in line with population dynamics thinking, we can use
machinery from evolutionary game theory to better understand the dynamics
and the results. This is a typical way to proceed in population models (see
Weibull 1995; Hofbauer and Sigmund 1998; Sandholm 2010). Thus, in this
appendix, we show, firstly, how the intra-subsystem dynamics can be
decomposed for future analysis in two extreme subgames and infinite mixes
of these subgames. This procedure allows us to better understand the role of
parameter φin the model and in our results (persistence of various co-existing
utopias, etc). Afterwards, we consider these insights to reflect on the overall
replicator process (expression (3) in Section 3) which is interlinked (in a bi-
directional way) in the model with the distinct intra-subsystem replicators
(expressions (1)and(2)inSection3, and the bidirectional links with expres-
sion (3)). We present new simulations as supporting material for the socio-
economic interpretations in Section 4. The appendix also helps us to pose
possible future developments (departing from the current model as a bench-
mark) as we explain in Section 5.
Insights on the dynamics of the model
Decomposition of the intra-subsystemic dynamics
Note that the payoff for each level of contribution (eq. (1)) can be written as follows:
uπ
1t
uπ
2t
uπ
3t
2
43
5¼γπ
t1φðÞ
x1x1x1
x2x2x2
x3x3x3
2
43
5þφ
0x10
x20x2
0x30
2
43
5
0
@1
A
sπ
1t
sπ
2t
sπ
3t
2
43
5
Thus, at the intra-subsystem level, eq. (2) can be seen as the replicator dynamics of a
population game where players are randomly paired to play a 2-player 3-strategy game
where the payoff matrix is:
γπ
t1φðÞ
x1x1x1
x2x2x2
x3x3x3
2
43
5þφ
0x10
x20x2
0x30
2
43
5
0
@1
A
Economics of Utopia: A co-evolutionary model 655
Let us consider the extreme values of φ.Forφ= 0, we have the following game
(henceforth SG1, for subgame 1):
γπ
t
x1x1x1
x2x2x2
x3x3x3
2
43
5
Given that x
1
<x
2
<x
3
, strategy 3 is dominant, and evolutionarily stable. Thus, the
point s
3
= 1 is asymptotically stable and the system converges to it from any initial
condition with s
3
>0.
15
The speed of convergence will be faster the greater the value of
γπ
t. Figure 11 below shows the phase portrait of the dynamics of this game in the 2-
dimensional simplex.
For the other extreme value φ= 1, we have the following game (henceforth SG2, for
subgame 2):
0x10
x20x2
0x30
2
43
5
In SG2, strategy 3 is weakly dominated by strategy 1.
16
It is not difficult to prove
that the rest points of the replicator dynamics for SG2 are:
1. All points in the line s
2
= 0 (and s
3
=1s
1
).
2. Point: s
2
= 1. This point is unstable, as it is invadable by strategy 1.
Figure 12 shows the phase portrait of the dynamics of this game in the 2-
dimensional simplex.
Therefore, in terms of our model, when φ= 0, and citizens (within their subsystems)
are purely partisans (in the sense that they just care about the rise to prevalence of their
utopia, without paying attention to possible opportunistic behaviors by their peers in
(1)) then, said subsystem tends (in isolated conditions) to a maximum average degree of
citizen contribution. On the contrary, when permeability is absolute (as given by φ=1
in (1)), then citizens perceive (or take advantage of) possible opportunistic behaviors
and the subsystem tends to stabilize (in isolated conditions) in the lowest degree of
citizen contribution. Of course, we have a continuum of possibilities between subgames
1 and 2, but we can infer that the lower the value of φin a subsystem, we should tend to
obtain higher average levels of commitment in said subsystem. Likewise, when φis
high, then low levels of commitment in the subsystem, or fluctuating paths driven by
the ongoing revision of strategies, are expected. In any case, notice that when we
couple the subsystems (considering (1), (2) and (3) together in Section 3), then the
14
The population profile induced by an Evolutionary Stable Strategy is asymptotically stable in terms of the
Replicator Dynamics (Hofbauer and Sigmund 1998;Weibull1995).
15
Note, however, that this does not imply that strategy 3 will be wiped out in the Replicator Dynamics.
Weakly dominated strategies in the Replicator Dynamics may remain present forever. In this particular case,
strategy 3 obtains a strictly lower payoff than strategy 1 at any point in the interior of the simplex, but the
dynamics may lead the process quicklytowards the boundary s
3
=1s
1
, where the selection pressure over
strategy 3 disappears.
656 Almudi I. et al.
shares of the subsystems in society also evolve, and the effect of φin the payoffs gets
mediated by endogenously changing subsystem shares, and intra-subsystem behaviors.
This much more complex situation is the one we see below.
Insights on the overall dynamics
Taking into consideration the decomposition shown in the previous section, and
assuming φ> 0, note that the dynamics of subsystems with very low share γπ
tare
driven by SG2, so in such vanishing subsystems eventually strategy 1 becomes
dominant, strategy 3 may hold some minor share, and strategy 2 effectively disappears.
Fig. 11 Phase portrait of the game SG1, with x
1
=0.1,x
2
=0.2,x
3
=0.3,andγπ
t= 0.5. Rest points are shown
as red circles
Fig. 12 Phase portrait of the game SG2, with x
1
=0.1,x
2
=0.2,x
3
= 0.3. Rest points are shown in red
Economics of Utopia: A co-evolutionary model 657
In the general case, the dynamics of subsystems with a non-negligible share γπ
twill
depend on the value of φ.
Low values of φ
As pointed out above, in subsystems with low share γπ
t, SG2 drives the dynamics, so
eventually strategy 1 becomes prevalent, strategy 3 may hold some minor share, and
strategy 2 effectively disappears.
Fig. 13 Representative example of a situation where two subsystems (Group and Nature) coexist. In these
two subsystems s
3
1, whilst in the subsystems that vanish s
2
0ands
1
is high
Fig. 14 Phase portrait of a game with (x
1
,x
2
,x
3
) = (0.3, 0.45, 0.6), φ= 0.8 and γπ
t= 1. Rest points are shown
as red circles. Rest point (1, 0, 0) has associated eigenvalues 0.33 and 0.06; rest point (0, 1, 0) has associated
eigenvalues 0.45 and 0.21; rest point (0, 0, 1) has associated eigenvalues 0.06 and 0.33; and finally, interior
rest point (0.472, 0.0833, 0.444) has associated eigenvalues 4.58·10
3
±0.095i
658 Almudi I. et al.
In subsystems with high share γπ
t, SG1 drives the dynamics, so strategy 3 is clearly
favored, and the greater the value of γπ
t, the faster the convergence to strategy
3. A greater share s
3
induces an increase in γπ
t, thus creating a self-reinforcing
dynamic.
Which particular subsystem(s) will end up with a significant share γπ
twill depend on
initial conditions. A high value of γπ
t¼0and, particularly, a high value of sπ
3;t¼0will be
key. As a representative example, consider Fig. 13,whereφ=0.03.
Fig. 15 Representative example of a situation where only one subsystem survives (Market). The intra-
subsystemic dynamics of this subsystem are cyclic
Fig. 16 Phase portrait of a game with (x
1
,x
2
,x
3
) = (0.3, 0.45, 0.6), φ=0.16andγπ
t= 0.5. Rest points are
shown as red circles. Rest point (1, 0, 0) has associated eigenvalues 0.126 and 0.004; rest point (0, 1, 0), which
is almost globally stable, has associated eigenvalues 0.054 and 0.036; and finally, rest point (0, 0, 1) has
associated eigenvalues 0.126 and 0.038
Economics of Utopia: A co-evolutionary model 659
High values of φ
As in the previous case, in subsystems with low share γπ
t, SG2 drives the dynamics.
The analysis of the subsystem(s) with significant share γπ
tis more complicated, as both
SG1 and SG2 influence the dynamics. As an example, consider the case where φ=0.8
and there is a subsystem with γπ
t1. This game shows cyclic dynamics, as can be seen
in Fig. 14 (where x
1
=0.3,x
2
=0.45,x
3
= 0.6). Figure 15 shows the overall dynamics
of a simulation run where the Market subsystem prevails, and its intra-subsystemic
dynamics are cyclic.
A final example
In intermediate situations where both SG1 and SG2 play a role in the intra-subsystemic
dynamics of some subsystems, the overall dynamics can be very different from the
extreme cases outlined above. As a final example, consider a model with
x
1
=0.3,x
2
= 0.45, x
3
=0.6,φ= 0.16, and two subsystems with γπ
t=0.5.
In this setting, strategy 2 is dominant, and the associated intra-subsystemic
dynamics can be seen in Fig. 16.
Figure 17 shows the overall dynamics of a simulation run where the conditions
outlined above are approximately met.
References
Abbot P (2005) Political thought in America. Waveland Press, Chicago
Acemoglu D, Robinson J (2012) Why nations fail? Crown Business, New York
Acemoglu D, Robinson J (2013) Economics versus politics: pitfalls of policy advice. J Econ Perspect 23:173
192
Akerlof G, Kranton R (2000) Economics and identity. Q J Econ 115(3):715753
Fig. 17 Representative example of a situation where two subsystems (Group and Nature) coexist. In these
two subsystems s
2
1, whilst in the subsystems that vanish s
2
0ands
1
is high
660 Almudi I. et al.
Almudi I, Fatas-Villafranca F, Izquierdo LR (2012) Innovation, catch up and leadership in science-based
industries. A coevolution model. Ind Corp Chang 21:345375
Almudi I, Fatas-Villafranca F, Izquierdo LR (2013) Industry dynamics, technological regimes and the role of
demand. J Evol Econ 23:10731098
Almudi I, Fatas-Villafranca F, Potts J (2017) Utopia competition: a new approach to the micro-foundations of
sustainability transitions. J Bioecon 19:165185
Anderson B (1983) Imaged communities: reflections on the origins and spread of nationalism. Verso, New
Yor k
Aoki M (1996) New approaches to macroeconomic modeling. Cambridge University Press, Cambridge
Arrow K (1951) Social choice and individual values. Wiley, New York
Becker G (1993) The economic way of looking at behavior. J Polit Econ 101:385409
Beland D, Cox RH (eds) (2011) Ideas and politics in social science research. Oxford University Press, New
Yor k
Boulding K (1978) Ecodynamics. Sage Publishers, New York
Bowles S, Gintis H (2011) A cooperative species. Princeton, Princeton University Press
Buchanan J, Tollison R (1984) The Theory of Public Choice II. University of Michigan Press, Ann Arbor
Buchanan J, Tullock G (1962) The calculus of consent. Liberty Fund Inc, Indiana
Caplan B (2007) The myth of the rational voter. Princeton, Princeton University Press
Carson, R. (1962). Silent Spring. Houghton Mifflin
Commons JR (1934) Institutional economics. Macmillan, New York
Denzau A, North D (1994) Shared mental models: ideologies and institutions. Kyklos 47(1):331
Dewey J (1910) The influence of Darwin on philosophy and other essays. Henry Holt, New York
Di Guilmi C, Landini S, Gallegati M (2017) Interactive macroeconomics. Cambridge University Press,
Cambridge
Dopfer K, Potts J (2008) The general theory of economic evolution. Routledge, London
Dopfer K, Foster J, Potts J (2004) Micro-Meso-Macro. J Evol Econ 14:263279
Dosi G, Fagiolo G, Roventini A (2010) Schumpeter meeting Keynes: a policy-friendly model of endogenous
growth and business cycles. J Econ Dyn Control 34(9):17481767
Downs A (1957) An economic theory of political action in a democracy. J Polit Econ 65:135150
Fatas-Villafranca F, Saura D, Vazquez FJ (2007) Emulation, prevention and social interaction in consumption
dynamics. Metroeconomica 58(4):582608
Fatas-Villafranca F, Saura D, Vazquez FJ (2009) Diversity, persistence and chaos in consumption patterns. J
Bioecon 11:4363
Fatas-Villafranca F, Saura D, Vazquez FJ (2011) A dynamic model of public opinion formation. J Pub Econ
Theo 13:417441
Frey B (1997) Not just for the money. An economic theory of personal motivation. Edward Elgar Publishing,
Cheltenham
Frey B (2001) Inspiring economics: human motivation in political economy. Edward Elgar Publishing,
Cheltenham
Friedman M (1962) Capitalism and freedom. University of Chicago Press, Chicago
Fukuyama F (1992) The end of history and the last man. Free Press, New York
Fukuyama F (2006) America at the crossroads. Yale University Press, New Haven
Gowdy J (1994) Coevolutionary economics: the economy, society and the environment. Springer
Harvey B (2005) A brief history of neoliberalism. Oxford University Press, Oxford
Hayek F (1960) The constitution of liberty. University of Chicago Press, Chicago
Hodgson GM (2015) Conceptualizing Capitalism. University of Chicago Press, Chicago
Hofbauer J, Sigmund K (1998) Evolutionary games and population dynamics. Cambridge University Press,
Cambridge
Huntington SP (1996) The clash of civilizations. Simon and Schuster, London
Jackson MO (2008) Social and economic networks. Princeton University Press, New Jersey
Jones G (1980) Social Darwinism and English thought. Humanities Press, Brighton
Keynes JM (1936) The general theory of employment, interest and money. McMillan, London
Kohn H (1944) The idea of nationalism. Macmillan, New York
Leighton W, Lopez E (2013) Madmen, intellectuals and academic scribblers: the economic engine of political
change. Stanford University Press, Palo Alto
Lipset S, Marks G (2000) It Didnt happen here: why socialism failed in the US. Norton, New York
Malerba F, Nelson R, Orsenigo L, Winter S (1999) History-friendly models of Industry evolution: the
computer Industry. Ind Corp Chang 8:340
Economics of Utopia: A co-evolutionary model 661
Malerba F, Nelson R, Orsenigo L, Winter S (2001) Competition and industrial policies in a history-friendly
model of the evolution of the computer Industry. Int J Ind Organ 19:635664
Malerba F, Nelson R, Orsenigo L, Winter S (2008) Public policies and changing boundaries of firms in a
history-friendly model of the co-evolution of the computer and semiconductors industries. J Econ Behav
Organ 67:355380
Malerba F, Nelson R, Orsenigo L, Winter SG (2016) Innovation and the evolution of industries: history-
friendly models. Cambridge University Press, Cambridge
Meadows D, Meadows D, Zahn E, Milling P (1972) Limits to growth. Universe Books
Metcalfe JS (1998) Evolutionary economics and creative destruction. Routledge, London
Mitchell S (1996) Daily life in Victorian England. Greenwood Press, Westport CT
Montgomery S, Chirot D (2015) The shape of the new. Princeton University Press, NJ
Mosca G (1939) The ruling class. McGraw-Hill, New York
North DC (1990) Institutions, institutional change and economic performance. Cambridge University Press,
Cambridge
North DC, Weingast B (1989) Constitution and commitment: the evolution of institutions governing public
choice in seventeenth-century England. J Econ Hist 49:803832
Page B, Shapiro RY (1992) The rational public. University of Chicago Press, Chicago
Potts J (2007) Evolutionary institutional economics. J Econ Issue 41:341351
Rodgers DT (2011) Age of fracture. Harvard University Press, Cambridge Mass
Rodrik D (2014) When ideas trump interests: preferences, worldviews and policy innovations. J EconPerspect
28(1):189208
Ryan RM, Deci EL (2000) Self-determination theory and the facilitation of intrinsic motivation, social
development and well-being. Am Psychol 55:6878
Sandholm WH (2010) Population games and evolutionary dynamics. The MIT Press, Cambridge
Sen AK (1970) Collective choice and social welfare. Holden-Day, San Francisco
Sen AK (1999) The possibility of social choice. Am Econ Rev 89:349378
Sennett R (1998) The corrosion of character. W.W. Norton, London
Taylor AD (2005) Social choice and the mathematics of manipulation. Cambridge University Press, New York
Veblen, T. (1898) 'Why is economics not an evolutionary science?' Quarterly Journal of Economics, 12(4):
373397
Vega-Redondo F (1996) Evolution, games and economic behavior. Oxford University Press, Oxford
Vega-Redondo F (2008) Complex social networks. Cambridge University Press, New York
Watson P (2000) A terrible beauty: the people and ideas that shaped the modern mind. Weidenfeld and
Nicholson, New York
Weibull JW (1995) Evolutionary game theory. MIT Press, Cambridge
Williamson O (2000) The new institutional economics: taking stock, looking ahead. J Econ Lit 38:595613
662 Almudi I. et al.
... These domain-specific traits condition the agents' degree of adaptation to the environment and the fulfillment of their goals and influence the population structures that emerge from competition (these traits include firm technologies, prices, performances, individual skills and habits). Certain implementations of this concept in alternative economic domains can be seen in Fatas-Villafranca et al. (2008, 2009 and Almudi et al. (2012Almudi et al. ( , 2013Almudi et al. ( , 2017. Now, if we want to move forward (starting out from these concepts as they have been developed by the evolutionary economics tradition), we propose that we need an extended ontological positioning. ...
... In order to develop these arguments and the corresponding policy implications, we organize this section as follows: In Sections 4.1 and 4.2, we explore some of the processes underlying technological change that involve the coevolution between agents devoted to technical practice, institutions and specific bodies of understanding. We propose a stylized growth model in which we use the principle of coevolution as a synthetic device to deal with the aforementioned sources of change (Fatas-Villafranca et al. 2008;2009;Almudi et al. 2012Almudi et al. , 2017. The model suggests important reflections on the complex role of policy-makers within coevolutionary environments (Murmann, 2003;Nelson 2008;Witt, 2009). ...
... In this section, we develop a coevolutionary analysis along the lines of previous models we have presented in Fatas-Villafranca et al. (2008) and Almudi et al. (2012Almudi et al. ( , 2017. Advanced technical tools to dig into the models are used in Fatas-Villafranca et al. (2011). ...
Full-text available
Presentation
We develop the concept of Coevolution in innovative economic systems, explore analytical and empirical developments, connect it with the realm of evolutionary economics and innovation studies, and highlight applications for the turbulent contemporary episodes (Great Recession, Post pandemic times, bottlenecks in postlockdown period, geopolitical tensions)
... These domain-specific traits condition the agents' degree of adaptation to the environment and the fulfillment of their goals and influence the population structures that emerge from competition (these traits include firm technologies, prices, performances, individual skills and habits). Certain implementations of this concept in alternative economic domains can be seen in Fatas-Villafranca et al. (2008, 2009 and Almudi et al. (2012Almudi et al. ( , 2013Almudi et al. ( , 2017. Now, if we want to move forward (starting out from these concepts as they have been developed by the evolutionary economics tradition), we propose that we need an extended ontological positioning. ...
... In order to develop these arguments and the corresponding policy implications, we organize this section as follows: In Sections 4.1 and 4.2, we explore some of the processes underlying technological change that involve the coevolution between agents devoted to technical practice, institutions and specific bodies of understanding. We propose a stylized growth model in which we use the principle of coevolution as a synthetic device to deal with the aforementioned sources of change (Fatas-Villafranca et al. 2008;2009;Almudi et al. 2012Almudi et al. , 2017. The model suggests important reflections on the complex role of policy-makers within coevolutionary environments (Murmann, 2003;Nelson 2008;Witt, 2009). ...
... In this section, we develop a coevolutionary analysis along the lines of previous models we have presented in Fatas-Villafranca et al. (2008) and Almudi et al. (2012Almudi et al. ( , 2017. Advanced technical tools to dig into the models are used in Fatas-Villafranca et al. (2011). ...
Full-text available
Book
Coevolution in economic systems plays a key role in the dynamics of contemporary societies. Coevolution operates when, considering several evolving realms within a socio-economic system, these realms mutually shape their respective innovation, replication and/or selection processes. The processes which emerge from coevolution should be analyzed as being globally codetermined in dynamic terms. The notion of coevolution has been appearing in the literature on modern innovation economics since the neo-Schumpeterian inception, four decades ago. In this Element, these antecedents are drawn upon to formally clarify and develop how the coevolution notion can expand the analytical and methodological scope of evolutionary economics, allowing for further unification and advance of evolutionary subfields. Worked examples or Exercises.
... Given the conditions of the Spanish socio-political regime at the 1950s-1960s (explained in Camprubi, 2014, and the wide variety of technological advances involved competing irrigation techniques, agro-food, civil engineering, energy production in different parts of the country -central Spain vs peripheral regions, all co-evolving with institutional bodies at multiple layers (research institutes, professional associations, politicians), we find here an enlightening class of historical studies compatible with Almudi et al. (2012), with significant implications for developing nations. iv) Fourth, there is a recent stream of coevolution works studying evolutionary political economy issues such as the co-evolution of competing political ideas, citizen groups and sociopolitical changes in contemporary democracies (Almudi et al., 2017). The evolutionary political economy perspective has been initially proposed by Witt (2003) and by Dopfer and Potts (2008). ...
... As we show in Almudi and Fatas-Villafranca (2021), when examining the evolution of societies from a normative perspective, we must look at, both, the results that emergent societal outputs produce on individual well-being, and also to the sustainability of specific paths for the natural environment and the socio-political body as a whole. Sustainable and welfare-enhancing social paths should allow for the coexistence and congruent transformation of all the subsystems considered in Almudi et al. (2017) which combine market dynamic efficiency, social inclusiveness, environmental sustainability, technological dynamism and politic-institutional orderly adaptability 8 to change. The coevolution approach helps to delineate the concrete corridors or parametric regimes for which harmonious coevolutionary dynamics may emerge. ...
Full-text available
Chapter
We define coevolution in innovative economic systems, as a key driver operating among interactive realms within an evolving complex system, in such a way that the respective innovation, replication and selection domain-specific mechanisms become mutually co-determined in a dynamic sense. We hereby develop the concept, and refer to formal implementations and empirical applications which analyze: the coevolution of technology, institutions and organizations in industrial dynamics; multisectoral coevolution and the coevolution of supply and demand in changing economies; the coevolution of market factors, technological traits, strategic options and institutional engines underlying growth and economic development; and evolutionary political economy issues from a coevolution perspective. The coevolution concept can unify methodologies (ABMs, networks and replicator dynamics) used in the analysis of innovation, and it can combine different evolutionary strands of innovation thinking (Schumpeterian economics; Institutional studies; Computational economics; Evolutionary games).
... Finally, the geopolitical tensions and socio-political turmoil that we see in most societies after the turbulent decade, remind us that not all social problems are amenable to technological, market and economic policy-driven fixes (the classic theme in Nelson, 1977;formalized in Almudi and Fatas-Villafranca, 2022). We need to reconsider aspects of political economy from an evolutionary perspective (Fatas-Villafranca 2011; Almudi et al. 2017). The rise of populism and increasing inequalities in the dangerous multipolar world that comes, require that we deal with the dynamics of power (hard political power in the classic sense), very much along the lines of Dosi (1995) and. ...
Full-text available
Preprint
This is an analysis of the wide theoretical context and consequential work of Richard Nelson and Sidney Winter. We assume as a norm for this chapter that we must do an embryological analysis of their texts, and those of contemporary thinkers. We begin by disentangling the avalanche of new ideas in the early individual works of Nelson and Winter. This flow of frames and concepts evolving, and the torrent of new questions that they pose, become interlaced and crystalize during their joint contributions in the 1970s and 1980s. In these decades we can distill the essence and critical development of Nelson and Winter in dialectic opposition with 20 th Century standard economics. The advances achieved during the 1990s and 2000s, with new protagonists coming to the front, lead us to the frontier of evolutionary economics. Then, the sudden irruption of the recession in 2008, and the sequence of shocks that have transmuted the global economy during the last decade, have unchained crucial innovations in evolutionary economics that expand the field far beyond the consolidated "beachhead".
... In fact, recalling what was recently demonstrated by Ndofor et al. [3] on the basis of their 36-year observations of 19 industry sectors, these environments are often chaotic, i.e., featured by a significant degree of a non-linear relationship among elements, together with inter and path dependence. As a fast growing meta-theoretical perspective in social sciences [59][60][61][62], and being generally conceived as the joint and dynamic outcome between industry, managerial, and environmental forces [63][64][65], co-evolution demonstrated effectiveness in capturing all three distinctive features surrounding complexity [66]. ...
Full-text available
Article
What is the state-of-the-art literature regarding the adoption of the complexity theory (CT) in engineering management (EM)? What implications can be derived for future research and practices concerning sustainability issues? In this conceptual article, we critically discuss the current status of complexity research in EM. In this regard, we use IEEE Transactions on Engineering Management, because it is currently considered the leading journal in EM, and is as a reliable, heuristic proxy. From this journal, we analyze 38 representative publications on the topic published since 2000, and extrapolated through a rigorous keyword-based article search. In particular, we show that: (1) the adoption of CT has been associated with a wide range of key themes in EM, such as new product development, supply chain, and project management. (2) The adoption of CT has been witnessed in an increasing amount of publications, with a focus on conceptual modeling based on fuzzy logics, stochastic, or agent-based modeling prevailing. (3) Many key features of CT seem to be quite clearly observable in our dataset, with modeling and optimizing decision making, under uncertainty, as the dominant theme. However, only a limited number of studies appear to formally adhere to CT, to explain the different EM issues investigated. Thus, we derive various implications for EM research (concerning the research in and practice on sustainability issues).
Article
We propose that a deeper integration still between psychology and evolutionary economics has value to offer by offering us a new perspective on the dynamics that underlie the behaviour that drives evolutionary change. We introduce psychological perspectives on the behaviour whereby change is originated and adopted by complex economic systems through a self-organising process of diffusion manifesting in behaviour change. We draw on cognitive, personality, affective, social and behaviourist psychology and neuroscience, and experiment with Jungian analytical psychology. We then draw these perspectives together into an integrated m