Economics
Malthus and Smith
Humans are thinking animals. Hence, the interplay between the theory of the evolution of strategies that humans consciously devise when interacting with one another and the theory of the evolution of strategies of non-human animals play is natural. As a bit of evidence of this interplay, in competitive markets, only managers who implement profit-maximizing strategies survive. Economists have used this evolutionary argument, first introduced by the economist Thomas Malthus, to motivate the axiom in economic theory of profit maximization. Here is the interplay: Malthus influenced theories of evolution not only within economics, but also in evolutionary biology. "In October 1838, that is, fifteen months after I had begun my systematic inquiry, I happened to read for amusement Malthus on Population, and being well prepared to appreciate the struggle for existence which everywhere goes on from long- continued observation of the habits of animals and plants, it at once struck me that under these circumstances favourable variations would tend to be preserved, and unfavourable ones to be destroyed. The results of this would be the formation of a new species. Here, then I had at last got a theory by which to work" (Charles Darwin, from his autobiography, 1876). While economic theory, in large part through Thomas Malthus, has influenced the theory of evolutionary biology, the influence has gone in the other direction also. Most recently, in this interplay between economic theory and evolutionary theory, the theory of evolutionary stable strategies created by the great biologist John Maynard Smith has been used by economists and game theorists to explain the evolution of strategies in human interaction. This interplay between economic theory and the theory of evolution will continue.
- James A. Dearden, Professor of Economics