Bionomics, Economy as Ecosystem - Michael Rothschild

[Saluki]

I'm about half way through this book and it's a really interesting read. It's a look at business development through the lens of biology /evolution instead of the standard mathematical/physics model.  A lot has been written in the past 20 years about "behavioral economics" and how it doesn't fit with the classical "rational man" narrative in most economic models. This book was written in 1990, but he cites a study done in the 1980s where they analyzed the articles written for The American Economic Review and found that 1/2 of them contained no data at all, just mathematical models.  Another 25% contained data that someone else gathered.  Only 1% analyzed data that was gathered by the writer.  While no biologist would publish books and articles without ever going into the woods to see what he was writing about, I don't know of any economists who have made field trips to a factory, an oil field, or a shipping port.  

 

Economics was born in the time of Newton, not Darwin, but the current mania with math and physics may be an attempt to give the field legitimacy.  Taleb says that majors like "social science" and "culinary science" are BS, because you don't need to call a real major "Physics Science". It's a marketing thing.  So maybe the emphasis on physics and math instead of biology isn't just marketing, but it's also wrong. The advancement of technology and the competition in business have more in common with biology and evolution than they do with physics. Concepts in biology like genetic drift (why Australia has so much strange wildlife) and Silicon Valley and it's culture are easier to form an explanation for than anything we can come up with in math. Niches in an environment that give one species an edge feel a lot like moats.  

 

Looking forward to the rest of the book, but if you are looking for a book that is not usually talked about but has some interesting ideas, this is a good one. 

[Saluki]

I'll give this a bump.  I finished reading the book and it's definitely worth a look if you are the type of person who thinks about mental models.  The biological processes in living organisms competing for scarce resources is a really interesting way to look at businesses and niches.  Competition and cooperation amongst different species is similar to what happens in business contexts. Even the concept of parasites has parallels in the economic world (criminals, bureaucrats, people who game the welfare system etc) .  

 

The flawed early economics that you learn about, such as Marxism and the evenly rotating economy, are now taken with a grain of salt, but the concept of the rational person (homo economicus) still persists. Behavioral economics is chipping away at the traditional beliefs, but looking at it through a biological lens is a quick and easy shortcut. If you believe in a rational man, then there should be no such thing as someone who dives on a grenade to save his friends, or jumps in front of a car to save their child.  But if you think of it from a biological perspective: which traits are more like to make the species survive, not the individual, then it's more logically consistent. 

 

I read quite a bit and learn a lot of facts from books, but it's rare that I read something that changes the way I look at things.  This is one of those rare gems. 

[schin]

6 hours ago, Saluki said:

I'll give this a bump.  I finished reading the book and it's definitely worth a look if you are the type of person who thinks about mental models.  The biological processes in living organisms competing for scarce resources is a really interesting way to look at businesses and niches.  Competition and cooperation amongst different species is similar to what happens in business contexts. Even the concept of parasites has parallels in the economic world (criminals, bureaucrats, people who game the welfare system etc) .  

 

The flawed early economics that you learn about, such as Marxism and the evenly rotating economy, are now taken with a grain of salt, but the concept of the rational person (homo economicus) still persists. Behavioral economics is chipping away at the traditional beliefs, but looking at it through a biological lens is a quick and easy shortcut. If you believe in a rational man, then there should be no such thing as someone who dives on a grenade to save his friends, or jumps in front of a car to save their child.  But if you think of it from a biological perspective: which traits are more like to make the species survive, not the individual, then it's more logically consistent. 

 

I read quite a bit and learn a lot of facts from books, but it's rare that I read something that changes the way I look at things.  This is one of those rare gems. 

 

Interesting... I'm going to buy myself this for Xmas. Thanks for the recommendation.

[John Hjorth]

Somehow, this topic, started, and so far, driven by @Saluki since September 2023, has skipped my attention, which @Saluki took the effort and time to gentle and polite to bring to my attention today, caused by this post of mine here in the books forum . [Thank you for that!]

 

It is about the difference between Normative Economic Theory and Positive Economic Theory [I would personally call it 'Observable Economics'], vs. Practical Idealism, of which the latter is actually discussed a lot here on CoBF! 

 

-Michael Rothschilds book hereby also added to my wishlist.

Edited December 15, 2023 by John Hjorth

[KJP]

On 12/13/2023 at 3:45 PM, Saluki said:

I'll give this a bump.  I finished reading the book and it's definitely worth a look if you are the type of person who thinks about mental models.  The biological processes in living organisms competing for scarce resources is a really interesting way to look at businesses and niches.  Competition and cooperation amongst different species is similar to what happens in business contexts. Even the concept of parasites has parallels in the economic world (criminals, bureaucrats, people who game the welfare system etc) .  

 

The flawed early economics that you learn about, such as Marxism and the evenly rotating economy, are now taken with a grain of salt, but the concept of the rational person (homo economicus) still persists. Behavioral economics is chipping away at the traditional beliefs, but looking at it through a biological lens is a quick and easy shortcut. If you believe in a rational man, then there should be no such thing as someone who dives on a grenade to save his friends, or jumps in front of a car to save their child.  But if you think of it from a biological perspective: which traits are more like to make the species survive, not the individual, then it's more logically consistent. 

 

I read quite a bit and learn a lot of facts from books, but it's rare that I read something that changes the way I look at things.  This is one of those rare gems. 

 

You may be interested in the books and papers that have come out of the Santa Fe Institute and people associated with it, e.g.:

https://www.sfipress.org/books/complexity-economics

https://www.santafe.edu/research/results/working-papers/complexity-economics-a-different-framework-for-eco

 

 

[Saluki]

On 12/18/2023 at 10:50 AM, KJP said:

 

You may be interested in the books and papers that have come out of the Santa Fe Institute and people associated with it, e.g.:

https://www.sfipress.org/books/complexity-economics

https://www.santafe.edu/research/results/working-papers/complexity-economics-a-different-framework-for-eco

 

 

Thanks.  I'll add this to my queue.