josh@cs.rutgers.edu (08/09/90)
Evolutionary Economics
by Howard Baetjer
On April 23-24, the Center for the Study of Market Processes in
conjunction with the Washington Evolutionary Systems Society held a
conference entitled "Evolutionary Economics: Learning from
Computation." An outgrowth of the Center's Agorics Project, the
conference explored the overlap among evolutionary economics, computer
modeling of complex evolving systems, and machine learning.
Our first speaker was Peter M. Allen of the International
Ecotechnology Research Center in England. Allen described the
complex, non-linear, dynamic interrelationships between economic,
environmental, and cultural factors. Using computer models of the
Nova Scotian shelf fisheries that ran as he spoke, Allen demonstrated
that it is the non-average detail of time and place which drives
evolution, and that there can be no equilibrium in a dynamic economy.
John H. Miller of the Santa Fe Institute spoke on classifier systems
and genetic algorithms. These evolutionary machine learning
techniques incorporate a feedback system by which they adjust to
success or failure. The feedback system is based on economic
principles: in classifiers, for example, successful rules essentially
"pay" other rules for useful information.
Paul Werbos of the National Science Foundation spoke on neural
networks, another machine learning technique incorporating economic
principles. With neural networks, as with classifier systems, there
is a kind of payment back through the system by which success is
rewarded and the system evolves.
Mark S. Miller, chief architect of the Xanadu Operating Company in
Palo Alto, California, spoke on Agoric Open Systems, a logical next
step in the evolution of computational systems from closed and
centrally controlled to open and evolving. Miller discussed
computational processes built on analogs to market principles of
property rights and competitive bidding (e.g. for processor time and
space in core main memory). Such processes allow for greater
complexity and efficiency in computer systems.
Other important guests were Robert W. Crosby of the Washington
Evolutionary Systems Society, who helped organize the conference, and
Jack Corliss of the Computer Systems Research Facility at Goddard
Space Flight Center, who showed a startling videotape of complex
evolutionary dynamics.
The conference made clear that examining the characteristics of these
various methodologies can help us better understand economic
processes. It also suggested possible applications of these various
methods that may help us build a more integrative approach to economic
problems.
(Howard Baetjer is a PhD candidate at the George Mason University
Department of Economics. He is a member of the Agorics Project,
directed by Prof. Don Lavoie. This article is reprinted from the
newsletter @UX{Praxis}. The Project may be contacted at the Center
for the Study of Market Processes, phone 703-323-3483, fax
703-764-6323. For papers on Agorics, see the Japan Prize article in
this issue.)