An Evolutionary Economic Paradigm

David Sloan Wilson
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Guest Introduction.

Today, evolutionary biologist David Sloan Wilson joins the podcast to discuss his recent paper, co-authored with Dennis Snower: "Rethinking the Theoretical Foundation of Economics."

Neoclassical, or orthodox economic theory is based on physics equations that assume the economic system is always trending towards rest, or equilibrium. Their paper suggests replacing physics, the heart of the paradigm, with Darwin's evolutionary science, which sees the economy as a system always undergoing evolution, driven by the triad of variation, selection, and replication.

David is a distinguished professor of biological science at Binghamton University, co-founder of a number of organizations that work to put evolutionary theory into practice, and even a fiction author of Atlas Hugged, a rejoinder to the selfish individualism of Ayn Rand's Atlas Shrugged that emphasizes the role of cooperation in evolution.

Topics include:

  • What replacing the neoclassical "physics of social science" with evolutionary theory brings to the table
  • Why an unregulated economy will not spontaneously self-organize into a more cooperative, improved system
  • The 'multilevel paradigm' of economics
  • Core design principles to manage the cultural evolution of a multilevel economy
  • A synthesis of science and spirituality


Time map.

12:40 - What is the ‘physics of social science’ that neoclassical economics pursued, and how does replacing that with evolutionary science improve things?

17:10 - What is the distinction between the two kinds of complex adaptive systems, and why is it so important?

26:50 - How evolutionary science contradicts the laissez-faire, invisible hand hypothesis.

32:40 - How evolutionary science presents a new direction for the role of mathematical models in economics

38:20 - The multilevel theory claims that the stuff of progress is to ‘increase the functional organization’ of society. What is functional organization?

53:10 - Elinor Ostrom’s core design principles in how communities can successfully manage resources as a commons (rather than a market-provisioned resource), and how these principles can scale up from local communities to designing a global economy.

1:02:10 - What is ‘well-being’, from an evolutionary perspective?

1:07:00 - How might ‘managed cultural evolution’ help us chart a middle way between laissez-faire and central planning?

Links from the conversation.
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Oshan (00:00:17):

Hello, I'm Oshan and welcome to the music mind podcast. Ever since the 2008 financial crash, One thing that has really not recovered is faith in economists or even economics at large, the theoretical foundation of the current paradigm, a body of work known as neoclassical economics took a huge hit and yet not all that much changed the economist. Milton Friedman. One of the main economists in that movement once wrote only a crisis actual or perceived produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around that I believe is our basic function to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable. And so one thing that the crash taught us was that alternatives to neoclassical economics simply weren't developed enough to rise to the occasion when the crash created both a crisis and an opportunity today, I'm joined by the evolutionary biologist, David Sloan, Wilson, who is doing fascinating interdisciplinary work to change that David is a distinguished professor of biological science and anthropology at Binghamton university.

Oshan (00:01:36):

He is the co-founder of a number of organizations that apply evolutionary theory to social questions, including the evolution Institute and pro-social world. David, along with colleagues proposed a theory called multi-level selection, which advocates the importance of group selection and cooperation in evolution in contrast to the selfish gene individualism and kind of exclusively competitive framework that was crystallized in Richard Dawkins idea of, of selfish gene theory. David also wrote Atlas hugged, which is a wonderful fictional retort kind of sequel to Iran's Atlas shrugged, again, taking on the centrality of individualism and making the case for the role that cooperation plays in successful evolution. But today, David and I are talking about a paper that he recently co-authored along with Dennis Snower, who's a, a big time economist at the ke Institute. The paper is titled rethinking the theoretical foundations of economics, and it begins sketching, a wholesale alternative to neoclassical economics.

Oshan (00:02:40):

They call it the multilevel paradigm and it's built on the foundation of David's multi-level selection theory that uses the, the importance of cooperative groups and evolution, as opposed to that atomized individualism to kind of rebuild the, the edifice of economic theory. The paper is a huge undertaking. The first one clocks in at 70 pages, and it's only part one of what will be a three part series sketching out their theory. And, and while there already exists a number of critiques of neoclassical economics, and also proposed alternatives, what makes this paper so interesting to me is grounding it all the way down in biology and then scaling it up via evolutionary principles to the economy, right? Their theory. Isn't just some armchair alternative. It's built on patterns that have been tested and tried by evolution for millennia as always. Thank you to everyone who shares the show on social media helps it reach new audiences or leaves reviews on apple podcasts. Thank you, especially to the Patreon supporters who make this possible. If you find value in the show and have the means, you can become a supporter by giving as little as $2 a month. The stability of which helps me invest in research, audio quality and allocating more time to the project. You can find all of that at JRO, or there's a link on the show page, which you'll slash podcast. All right. Here's my conversation with David Sloan Wilson.

Oshan (00:04:11):

So David Sloan Wilson, welcome to the musing mind podcast. And thanks so much for being here.

David Sloan Wilson (00:04:16):

Thanks to you.

Oshan (00:04:17):

So let's start with the obvious question, which is you are a highly accomplished evolutionary biologist, but for a number of years now, almost a decade, it seems you've been publishing papers with economists and, and about economics. And just this past year, you released the first installment of a three part series with Dennis Snower and economist, which proposes a new paradigm for economics, which you call the multi-level paradigm. Now, it it's clear from your work that you're not one to remain siloed within a kind of disciplinary boundary. You've approached this study of evolution in a very interdisciplinary way, but what brought you to get so involved with economics? The so-called dismal science?

David Sloan Wilson (00:04:59):

Well, I guess it preceded in a number of stages first began as a biologist. But of course, nothing in biology makes sense, except in the light of evolution. So within biology evolution provides a passport to the study of all subjects. At that time it was confined to genetic evolution and had little to say about human cultural evolution, but that's now changed. And I was part of that expansion. So within evolutionary biology, I'm known, I I've made two contributions. One is the, the evolution of altruism. And so the fundamental problem of social life is, is how does altruism and all forms of pro sociology evolve. And then, and then the expansion of evolutionary science do include all things human. And when you put those together, then all of a sudden you're studying human cooperative groupings of all sorts religion. So I published a book in 2002 Darwin's cathedral, religion from a evolutionary perspective, and then somewhat later economics. So there's a kind of a very brief explanation as to how a humble biologist who started out studying zoo plankton ended up rethinking the theoretical foundation of economics.

Oshan (00:06:21):

<Laugh>, that's really interesting. So biology was kind of the ground zero for your interest in evolutionary science. And ever since you've been taking the perspective that evolutionary science provides kind of beyond biology into different domains and especially into kind of human cultural domains where it can help make sense of things. I mean, so much of your work seems to be about advocating that evolutionary principles apply in cultural spheres, just as much as genetic.

David Sloan Wilson (00:06:49):

Well, one of my passions is that actually explain the meaning of nothing in nothing about acts makes sense, except in the light of evolution. And that first manifesting itself for X equals biology and only now manifesting itself for X equals all things, human.

Oshan (00:07:06):

The anchor for our conversation today will be this paper on, on rethinking the theoretical foundations of economics. And in this, you essentially swap out Newtonian physics as the basis for economic theory, and you swap in evolutionary science and elaborate what happens to economics when you do that. But before getting into that, I want to situate this all in a broader context. And I think that one of the reasons that talking about an alternative economic paradigm is so popular at the moment is because there is this disillusionment that, that seems to be reaching something of a critical mass. I don't think that we have sufficient coherence around either what the economy is for what it is supposed to do and how we track, whether it's achieving those goals. And it, it's pretty old news at this point to say that, you know, GDP alone is a poor proxy for a desirable economic system, you know, mere growth without attention paid to what kind or in what direction and what sectors or at what cost.

Oshan (00:08:03):

Doesn't give us sufficient kind of normative compass for, for designing a successful economy. And one of the things that I really appreciated about your paper especially relative to many of, kind of the other alternatives floating around is that I think you give a really pragmatic idea of what the economy should do at least at the level of principles and how we might direct the system's evolution or growth to achieve that normative direction. And this has a lot to do with, with specific ideas that will elaborate, I think, throughout the conversation functional organization growing the boundaries of units of selection wellbeing. But I, I wanna start at the outset maybe with a bird's eye view and ask you from the perspective of evolutionary science, what is the economy for, what should it do and, and what does economic progress look like?

David Sloan Wilson (00:08:50):

Yeah, well, I have my co my co-author Dennis Snower to thank for much of that and just to introduce him, he is a very highly regarded economist. He was president of the keel Institute for world economics. That's the Institute in Germany that helps to organize the G 20 and the T 20 and the G seven summit meetings. And so this is very much world scale economic. He's, he's, he's a consummate economic insider, and that provides real an insider. Yeah. I mean, otherwise I'd just be some yet another barbarian, you know, outside the outside the gate. And so when you come at it from the outside, then it's clear that an economic system is something which is a whole system. And of course, and is nested within a, a larger social system, which in turn is nested within a, a natural system. And that's like probably the most natural way to think about an economic system, but it's not the Orthodox view or the Orthodox view. I'll turn that back to you because I know that you have Orthodox economic training and, and and so you know, why is it that Orthodox economics is not like that?

Oshan (00:10:12):

Yeah. Maybe, maybe before wrestling with the question of why neoclassical economics struggles to see that interrelation between society, culture, the environment and economic processes. I think we should establish a, a very minimal but working idea of what it is. So just briefly neoclassical economics, otherwise known as Orthodox or mainstream or traditional we can think of it as the set of concepts and theories that for roughly the past hundred years, you would find in undergraduate and graduate textbooks and the group of claims that peer reviewed studies in economics treat as consensus. And I don't want to dwell too much on what those theories or concepts are because there's a lot of that out there. I think the best source on this is Eric hawker's book the origin of wealth, right? But the gist of it is that neoclassical emerged as an attempt to create something that, that you wrote a lot about actually, and will come back to a physics of social science.

Oshan (00:11:16):

And, and this is literal, there was a, a failing economist by the name of Leon Walras in the late 18 hundreds. And while he was kind of flunking out of his career as an, as an academic economist in reconsidering his life he was reading a physics textbook and in it, he saw the equation for equilibrium systems and that kind of served as this spark, where he realized that he could borrow this equilibrium equation and build on it to devise a kind of mathematically precise form of economics that could model and predict the economy. And ever since then, you know, we've kind of, there's been new and improved theories in that same language of equations that have been added and refined to this body of work. And I, I wanna focus on this because the foundation in physics equations is kind of this central component of that in your paper.

Oshan (00:12:06):

And this multi-level paradigm that you're proposing with Dennis that the foundational switch is to abandon the physics equations at the heart of it all. And instead replace them with the Darwinian triad of variation and selection and replication kind of as our basic understanding of how the economy evolves. And, and also to note implying that it evolves at all right, because using an equilibrium equation to model the economy applies that it's natural state is to be at rest and innovation and dynamism are anomalies. But anyway, so in, in your view, what does it mean to have a physics of social science and what does replacing that with Darwinian evolution bring to the table?

David Sloan Wilson (00:12:49):

Yeah, well, you can understand in the, in the 18 hundreds, why the allure of physics of social behavior would be so alluring given, you know, new Newtonian physics and its AMA amazing ability to, to predict the orbits of the planets and, and things like that. And so the whole idea that you could build a mathematical system that was that predictive of the physical world, please let's do that for economics. And so it's easy to appreciate the allure of that, but it, it just turns out to be just the I wrong starting starting point. But when you, when you go down that road, what do you do? Well, you have to tweet individual people of some kind of a Adam and, and and so, and how does this atom behave? And there you get utility maximization and all the assumptions that are finally referred to as homo economicus as, as as forced upon you in order to build this mathematical edifice and so many and also, you know, markets at equilibrium.

David Sloan Wilson (00:13:54):

If you look at the, the assumptions about both human nature and the social environment inhabited by humans. So much of it is forced upon you in order to build a system of mathematical equations. And that is persisted to this day. So for the very same reason that Darwin's theory of evolution was like a hugely different paradigm than physics physics gives you the periodic table evolution gives you all the diversity of endless forms, most <laugh> most, most beautiful. And so for the same reason that natural selection stands apart from physics, this plays itself out O ocean and philosophy. And I know that you have a philosophy background, but up until about the 1970s, philosophy of science was essentially philosophy of physics and, and physics was like supposed to be the goal standard of science at all. Other topic areas should be emulating.

David Sloan Wilson (00:14:57):

But about that time, a new breed of philosopher came around, including my colleague Elliot sober. And they said, no, wait a minute. There's something about evolution, evolutionary science. That's really different than physics does not have to play by the same rules as physics requires a different philosophy. And so then philosophy of biology emerged as something that was not like some kind of poor cousin to philosophy of physics. And so like being physics bound, as opposed to evolution oriented plays itself out in more than one area plays itself out in economics, in philosophy and complex system science, I think has the same dynamic where developed mostly at first by physicists and the evolutionary implications of complex system. This is something we can talk about is, is, is about as new for complex system science as it is for economics and the phrase complex adaptive systems and how we need to distinguish between two meanings of complex adaptive systems as part of this paper that we're talking about. And something I eager to discuss during this conversation.

Oshan (00:16:21):

Yeah, let's, let's open that up a little bit, cuz this distinction you make is, is so rich and I'm really surprised I haven't heard it before. And that's part of your point, I think, in, in trying to spread the good news, right? This distinction between CAS complex adaptive systems, two and one and it's increasingly popular nowadays to throw complexity science at everything. We mentioned the field of complexity economics. It has its own critique and alternative for neoclassical. But you've introduced this distinction between, or at least popular as yet. I don't know where first comes from two kinds of complex systems. And this is important because it seems like from an evolutionary perspective, CAS one systems are the goal and this is where the system itself is adaptive. The system is the unit of selection, but from the existing paradigm of economics, you know, classical what we have and what we designed for. So these things are very interwoven, our CAS two systems where you have a system composed of individuals each following their own respective adaptive strategies. So could you, could you elaborate this a little bit, give us a quick idea of what these two systems are and why that distinction is so important.

David Sloan Wilson (00:17:24):

Yeah, happy to and and we really want to pay it proper attention. So I'm not gonna try to rush through it. So what I try to establish is that first of all, economics, and just about everything else needs to stand upon a foundation that's provided by complex system science and evolutionary science, two bodies of knowledge. Then I say that the most general of those is complex system science because because of course complex systems could then can be either physical complex systems or living complex systems. So that's the more general, however living complex systems are such a special subset of all complex systems that they require their own theory. And that some of the things we need to know are specifically evolutionary not to be had by general complex systems theory. They, they require specifically evolutionary concepts and the key phrase complex adaptive systems illustrates that.

David Sloan Wilson (00:18:29):

And I invite everyone listening to this to go to Wikipedia and go to the entry on complex adaptive systems and you'll get a big long list of them. And that list includes such things as traffic patterns the warfare the immune system, the stock market, and a B colony. And and those are all thoroughly mixed up. Well, the two meanings of complex adaptive system that we need to know about are the first one, a complex system that is adaptive as a system, as a system. Examples of that would be a single organism, the immune system, the brain, a B colony. These are complex systems that are adaptive as a system. The second meaning is a complex system composed of agents following their respective adaptive strategies. Okay. A complex system composed of agents following their respective adaptive strategies. An example would be traffic patterns warfare the point the stock market was the other one that I, that I mentioned.

David Sloan Wilson (00:19:44):

And the distinction is of course not made in that long list. They're thoroughly jumbled up. And why is the distinction so important? It's because every positive change effort is an attempt to create a CAS one system, a system that is, that is adaptive as a system. And every pathology that we're confronted with is a CAS two system, a system composed of agents following their respective adaptive strategies very often across purposes with each other. And so the policy issue, the policy issue across all topic domains is how do we convert CAS two systems into CAS, one systems and general complex systems theory. It does not provide the answer because it's too general. If you look at the major concepts of general complex systems theory, such things as basins of attraction and systems at disequilibrium and, and you, you know, extreme interdependence and sensitive dependence on initial conditions.

David Sloan Wilson (00:20:51):

And all of these things apply to both CAS one and CAS two systems. And, and it's just not the case that CAS two systems robustly self-organized into CS. One systems, there must be a process of selection at the system level adaptation at any level. It requires a process of selection at that level and tends to be undermined by selection at lower levels. That's multi-level selection. At a nutshell, it says specifically evolutionary concept. That's needed to explain how we get CAS one systems and all of this is new. It's new for complex systems theory. It's new for economics, it's new for any area in the social sciences, including such things as clinical psychology. So it has this tremendous, you know, nothing about X makes sense, except in the light of this is what we're talking about. And it is very little known.

Oshan (00:21:57):

Would it, would it be going too far to paint as an example, I'm just thinking of this. If you have a, a normally functioning human body, this could be an example of a CS one system, the, the body on the whole is adaptive, but then when you get an instance of cancer, when you have a cell that is following its own, self-interest irrespective of, of the larger system's needs, the cancer undermines the conditions for that whole body to, to thrive. Would that be an example?

David Sloan Wilson (00:22:21):

That is definitely an example of multi-level selection. And so let's spend a little time on, on that, or should I, I, I use I use the game of monopoly to get this across super fast. So if you think of playing the game of monopoly, that's a process of competition among individuals within a single group. You're trying to beat out everybody, get all the real estate drive, everyone else bankrupt. And so what we have is we have a process of competition leading to an absence of cooperation. There's no context for cooperation in a game of monopoly, other than the losers teaming up to beat the current front runner so that they can compete among themselves. And so there's a social environment with very little scope for cooperation. Now, ma imagine playing a monopoly tournament in which the trophy goes to the team that collectively develops its real estate the fastest.

David Sloan Wilson (00:23:14):

Now you can see that there's still a process of competition, but it's between groups, it's between groups. And then that selects for teamwork within the group. That's the only context. There's no point in beating your teammate anymore. Not no, no nothing to be gained, everything favors functioning as a team to beat out other teams. And now that's good, but there's no context for between team cooperation is there for that. We'd have to have some new layer of, of selection among teams of, of teams. And so, so evolution is like that evolution, the, the, the competition can take place at different scales. And when it's among individuals within a single social group, it selects for monopoly like behavior disruptive self-serving behaviors. When selection is at the group level, then it favors teamwork at the scale of the groups. But that's just a form of collective selfishness.

David Sloan Wilson (00:24:16):

As far as between group interactions are concerned. And so if you wanna have higher levels of cooperation, you need higher levels of, of selection is not hard to wrap your head your head around it. And so, so against that background, we can take something like cancer, and we can see that it's exactly the process of two level selection in which the organism is the group and the cells are the agents within the group. Most of the cells are cooperative cells. That's why we function like an organism and a cancer cell is basically a cheater it's growing at the expense of the cooperative cells and it's proliferating without contributing to the economy of the body. And that is successful from an evolutionary perspective from within group selection, natural selection is all about the differential proliferation. And so cancer cells are perversely adaptive when it comes to selection within groups, evolution has no foresight.

David Sloan Wilson (00:25:18):

So the fact that cancer cells are ultimately gonna bring about their own demise is beside the point. We can say the same for our species, that if we managed to drive ourselves extinct <laugh>, then we would've evolved ourselves to extinction just like a cancer cancer. And the only reason that that we're good at defending ourselves against cancer is because selection at the individual level over hundreds of millions of years, selecting for individuals well defended against cancer, surviving and reproducing those that succumb to, to cancer. And so that logic of multi-level selection is playing itself out for cancer. And then if we frame shift upward it plays itself out with the eternal struggle between basically disruptive self-serving behaviors and cooperative behaviors and in social groups.

Oshan (00:26:12):

Yeah. And we should point out too. You, you write explicitly about this in the paper that a, a, a quick reading of Adam Smith of, of his, you know, the famous theory of the invisible hand is essentially the claim that if we maintain the correct market conditions of the economy, being a CAS two system, where everyone follows their own respective adaptive strategies or their own self-interest what happens is the system self organizes naturally into the CAS one system what's best at the individual self-interest level harmonizes with what's best for the whole system. And your claim here is, is that evolutionary science has flatly denied that and showed the opposite that there is no guaranteed evolution from one state to the other that that has to be a managed process. And I, I think that's such a great point. And we'll dig into that. Yeah,

David Sloan Wilson (00:27:00):

Let me, maybe I can just consolidate that right here. Or Sean, because the naive rendering of the invisible hand is that basically the lower level pursuit of self-interest by individuals or corporations robustly benefits, the common good. We could all basically do what we want. And it'll self for the benefit of the whole that's, what's profoundly untrue. I mean, profoundly, deeply Bess searchingly untrue <laugh>. But yet, yet, yet there is a version of the invisible hand that's invisible, and it goes like this. We must act in two capacities first as designers of whole systems. That's the opposite of the invisible hand. We must have the welfare of the whole system in mind to design that system. But the second capacity is to be participating within that system that we designed. And for that you do not have to have the welfare of the whole system in mind ourselves.

David Sloan Wilson (00:28:05):

For example, they don't have the welfare of the organism in mind. They're just responding to local circumstances. That's how they evolve. And if you look at a system that's been well designed, a human system, that's been well designed either inadvertently by natural selection or more consciously by, by human agency. In either case, if the whole system works well, take a traffic system, for example, in a city, if it's not designed, then it just doesn't function well at the whole level of the whole system, all, all the individuals, making their separate driving decisions, results in chaos at the, at the system level. If you, if you design the system, that's where operating in the first capacity. Well, you have to have the whole system in mind in order to design it. Where do you put the street lights? How do you time it? How do you do this and that, but once that's built, then drivers are just making their local decisions, aren't they? Mm. Yeah. And so, and they're, they're let as if by an invisible hand, well, the invisible hand was us acting in the first capacity. <Laugh> <laugh>

Oshan (00:29:08):

I realize it is our own hand.

David Sloan Wilson (00:29:10):

There's yeah, that's right. That's right. It's the visible hand, or it actually is an invisible hand when, when saw a product of blind cultural evolution. So there's many things that work and nobody invented them, prick kayak made that, had that insight.

Oshan (00:29:26):

Yeah. It's interesting too. There's a phrase in, in the design world that, you know, the best design is invisible. It's transparent. You can't see it. Yeah. And so it's the exact same kind of principle at play here. One thing that I found really sharp about your critique of neoclassical was that you didn't stop at kind of ridiculing the assumptions. And this is important because I, I find that very often critiques that do kind of miss the point, right? A lot of the critiques out there will take the approach of explaining what the assumptions are like perfect competition, complete information. The economy has an equilibrium system with no externalities and then kind of ridicule how far disconnected from reality. These are, and then say, you know, aha, I have got you, your assumptions don't actually match the real world. So neoclassicals debunked. And I've always found this a little premature because if you were to speak with a neoclassical economist who by and large are kind sweet, brilliant humans, they would agree that their assumptions are very unrealistic, that their models are some might even say that they're wrong in terms of describing reality.

Oshan (00:30:29):

But as you point out in the paper, the point of a model, isn't exactly, it's not to be right. It's to be useful. There's that famous quote that goes, all models are wrong, but some are useful. And the new classical claim is that their models are, are exactly that, that they're useful. That in order to think about the best ways to navigate the real complex economy, these hyper simplified models help us think it through to kind of understand core principles. And in the critique section of your paper, you kind of attack the grounds that it's models are, are useful. And I wanted to ask you to expand on this. And one thing that I'll the, the last thing I'll add, which I thought was so brilliant was a passage from the essay where you wrote the standard portrayal of economic agents in neoclassical and behavioral economics is compatible with the American psychological Association's definition of psychopathy, right?

Oshan (00:31:15):

As a synonym of antisocial personality disorder, which is a pattern of disregarding or violating the rights of others, a person with antisocial personality disorder may not conform to social norms, may repeatedly lie or deceive others, or may act impulsively. This implies that the first fundamental theor of welfare economics identifies the conditions under which a population of psychopaths can satisfy each other's consumption, demands efficiently through voluntary exchange. Yeah. Since people with psychopathic personalities represent no more than 1% of the population, this is clearly not a useful description of people's actual patterns of thinking, feeling and behaving. And then the final point you say the important question, however, is whether the economists portrayal of economic agents is a suitable simplification for explaining why people in market economies manage to satisfy consumers' demands without central coordination. So my understanding of, of the multi-level paradigm, which draws on multi-level selection theory is that rather than describing a population of antisocial psychopaths, the basic theory sees humans as fundamentally social and social groups is an important unit of analysis in the models we use to make sense of the world. So tell me a little bit more about this, this movement from anti-social individuals to social creatures and groups.

David Sloan Wilson (00:32:33):

Well, you said a lot there that we need to unpack, or should we, we're still in good time here. So we don't have to to rush, let's go back to this idea that, you know, all models are incorrect. Hmm. And you know, the, the classic paper there is by Milton Friedman and what is it? 1953, his positive economics paper in which he concedes that the assumptions of neoclassical economics are ridiculous, but he says, nevertheless, people behave that way and firms behave that way. And he actually trots out an evolutionary argument. I've written a little paper on this that we can provide in your, in your notes. And he says, you know, I mean I mean, trees act as if they're solving differential equations when they orient their leads towards light, but they didn't, you know, that they're not really doing that.

David Sloan Wilson (00:33:20):

A billionaire to pool player acts as though we solving differential equations when he makes a bank shot, but that's just by hours and hours of, of practice and firms act, act as though they're maximizing their utility. But that's just because the ones that didn't have gone extinct and trumpeters creative destruction is, has taken place. And so he he's actually relying on an evolutionary very simplistic evolutionary argument to explain why it is that the, that the models of Neo classical economics can be correct. Despite having ridiculous assumptions. If you look at any other subject area, and it doesn't matter whether it's biology or the social sciences, or even weather forecasting, what you do is in the first vault models are much more humble. They're not the kind of Olympian model of neoclassical economics. You build models around very specific topics. We call this small world modeling in the paper.

David Sloan Wilson (00:34:23):

If I'm a biologist, I wanna, I, I wanna know, you know, how does a fish select its food? And so I'm gonna, I'm gonna build a model of optimal foraging theory. And before I get very far with it, because of all the simplifying assumptions I make, I better test that against reality real fast. And so I do, that's an experiment takes place, and then that modifies the model, but there's a, an authentic dialectic between the model and the test, the model and the test and that, that iterates itself again and again and again. And that little model has to be, is only a suitable for a given context. And so if, if I switch the context, I have to switch the there's a whole family of, of small world models that have to be developed. That's how it really takes place. And it's against that background that you can say that all models are wrong and so on and so forth, but only because of this, first of all, small world modeling and true dialectic between the, the, the modeling and the, and the empirical test weather forecasting is like that. And a social forecasting is like that. Some, a rapid dialectic between gathering data and testing at gathering data and testing. So that's, what's needed for economic modeling and that the Olympian model is, is a joke. And to say that, you know, all models are false. And so therefore we can proceed in this way. It's a joke.

Oshan (00:35:51):

And, you know, it's, it's really interesting because this is something I wanted to get into the way that you outline, how the use of models and end of math, actually in evolutionary science suggests kind of a, a direction that economics can take it. You made this really interesting point that the assumptions of neoclassical economics as they've come under fire remain rigid and inflexible precisely because they were first coded in equations as math. In the paper you wrote that, you know, relaxing, the assumptions is difficult or impossible because it makes the math difficult or impossible. This is the sense in which formal mathematical models become a straight jacket rather than an enabler of productive inquiry. And by contrast, you point out that with evolutionary science and, and Darwinian theory at its core, not only is it, is it very simple, but it's linguistic that the theory starts with words, not math

David Sloan Wilson (00:36:41):

<Laugh> that’s

Oshan (00:36:42):

Right. And that in fact, you know, it's actually interesting, there's kind of an, an inverse relationship of how these two employ math neoclassical began with math and is now trying to break outta that straight jacket imposed by the equations. Whereas evolutionary science began with words and only later developed kind of formal mathematical models. And as you just laid out as a result, the math has been maybe contained a little more used in these specialized cases, kind of tested against empirical science to kind of keep things reigned in. So do, do you think that this way that evolutionary evolutionary science uses math, is this kind of a direction that economics can go?

David Sloan Wilson (00:37:17):

Totally, totally. And I think it brings us back to philosophy if you go to any definition of, of theory such as Oxford English dictionary, it's, it gives us definition. And then as an example, it gives Darwin's theory of evolution. <Laugh>, that's, that's the, that's the example of the, of the theory that's proven to be so very powerful. And it is exactly, as you said, it started out with words, Darwin didn't mathematically model, and he didn't, and he didn't need to. So basically the evolutionary perspective provides a, an entirely different conception of theory. So, and it's the appropriate one. So that's part of what comes with this paradigm shift.

Oshan (00:38:00):

Yeah. And, and so maybe this is a good point to get into one of the most important ideas. As I saw it, that, that we should really spend some time with to understand this, the kind of, what happens to economics when you put evolution at the center. And, and this is this idea of functional organization, and, and you've touched on kind of things adjacent to this this, the basic idea behind multi-level selection theory. And, and it really helps us understand what progress is within this multi-level economic paradigm. In, in the paper you wrote that progress, the advancement of individual and collective wellbeing arises in the process of cultural selection. In response to variation, we will argue that achieving higher levels of functional organization is a vital driver of progress. So let's start here. What is functional organization?

David Sloan Wilson (00:38:47):

I find myself wanting to give a little bit of historical background and talking among other things individualism, because it said that that, that basically what unites all schools of economics is that they're all forms of individualism. And, and very often individualism is modified with the term methodological methodological individualism. And it turns out to be a very diverse subject. Jeffrey Hodgson is a very distinguished scholar of the social science who's economics and evolution who's who's written about this, but crudely, it is the, it is the axiomatic statement that the individual person or the individual is some kind of fundamental unit of analysis, and that all things social must be understood in terms of individual thought and action. And so the individual is the functionally organized unit before individualism, there was functionalism. This is the tradition of Emil Deim and others, which treated societies as the whole organisms.

David Sloan Wilson (00:39:54):

And of course, societies are made up of individuals, but you can't reduce society to individuals. Quite the contrary individuals function in the context of societies, individuals consist of cells, but you can't reduce everything about individuals to the cells. So functionalism was this axiomatic belief that the society is, is the unit of, of functional organization. And individualism is the axiomatic belief that the individual is the unit of functional organization. And what evolution multi-level evolution tells us is actually, there's no one level we cannot be axiomatic about this functional organization could exist or, or not exist at multiple levels. And so therefore we need a theory that allows us to determine on a case by case basis, where is the functional organization in a healthy organism? It's the organism in a cancer ridden organism. It's the cancer and the organism is not functionally organized because it's cancer ridden a, a well functioning human society. That's highly cooperative and well protected against cheaters. Well, the group is the unit of functional organization. When that's not the case, then it becomes a CAS two system merely a group of lower level agents they're functionally organized, but the sum of their parts is by no means functionally organized. And so being able to explain the presence and absence of functional organization, wherever it exists and doesn't exist is what multi-level selection provides.

Oshan (00:41:35):

Hmm. So the, the functional organization of a system would refer to whatever the relevant or proper scale or unit of selection is for that system. Is that right?

David Sloan Wilson (00:41:47):

Well, I guess maybe I to demystify it just a little bit, let's begin talking about human implements. You know, what is a watch for it's to tell time all the parts of the watch are coordinated for that purpose. What's an automobile to drive from point a to point B. Something is functionally organized when it, when it exists to do something, unlike a mineral or the weather or the moon, or, or those things don't have a purpose. A snowflake does not have a purpose a human implement does. And so I think that that's deeply intuitive. We don't have to puzzle too much about that. And then of course, with organisms, a a, a healthy organism is designed to survive and reproduce in its environment and all of its parts contribute to that, to that end. And so something is functionally organized when it is organized in order to accomplish something, either because it's a human created implement or by a process of, of selection.

Oshan (00:42:58):

Okay. So in simpler terms, then my last attempt at a summation, something that is functionally organized is just something that is, or was designed to do something. It has a purpose and the functional organization of a system is fragile, right? It can be broken again, kind of going back to the human body, a well functioning body is a whole system that is designed to survive and reproduce in its environment where all the parts are playing a more or less cooperative role in supporting that goal. But that functional organization can be decreased if you get something like cancer and the body as a system is, is almost fragmented, right? So that as a system that is functionally organized to achieve its goal, it's now smaller because a cancerous piece has been broken from the pack and is now, you know, on its own, a smaller functionally organized system that does not gel into or cohere with the whole.

Oshan (00:43:57):

And so the body on the whole is now not a CAS one system where the whole system is functionally organized as a unit. Instead, it's moving towards becoming a CAS two system, because it's now a collection of smaller systems, the cancer and the rest of the body pursuing their own self-interests that can actually be at odds with each other. And so one way that I understand multi-level selection theory is rather than focusing exclusively on individuals, we can also look at how individuals become parts of larger functionally organized groups by means of cooperation and the role that being a part of these groups can play in giving rise to things like preferences and values and so on.

David Sloan Wilson (00:44:42):

Yeah. And, and neoclassical economics in the first place is said to be individualistic because it's basically, it's based on a model of rational actors maximizing their utilities. So, and then I'll leap right from there to I, what I think is the single most radical implication of multi-level selection theory is that it identifies not the individual person, but the small functionally oriented group as the fundamental unit evolution tells us that that individuals never lived alone throughout our history as a species, individuals never lived alone. They always lived in the context of small and for the most part, highly cooperative groups, even when those groups were waring with other groups. And so the very conception of economicus that the individual is some kind of utility maximizer maximizing a personal utility is just so far away from actual humans who are built and designed by genetic evolution and to a large extent cultural evolution to, to function in the context of a cooperative cooperative group. The starting point is so very, very different.

Oshan (00:46:09):

Yeah. I really like the, I interviewed Julie Nelson an economist on the show a while back Uhhuh, and the way she put this was that Neo classical economics employs a mushroom man theory, which is that individuals simply pop up outta the ground fully formed their preferences shaped, you know, whereas, you know, it seems as if what actually happens is we emerge fundamentally from the social matrix and then we can't ignore the, the role that that plays.

David Sloan Wilson (00:46:33):

Yeah. And that's true. So, I mean, I mean to really absorb what you just said is paradigmatic and, and there's. And so there is such a difference to, I think the reason that that critiques of Neo classical economics have failed, they haven't failed. I mean, they always score good points but the reason they haven't Coheed and, and they're kind of like satellites orbiting the mother planet, that's true for behavioral economics, by the way, one of the contributions of the evolutionary paradigm is that it really truly provides a different configuration of ideas that coheres and and provides a much more favorable background for the hetero schools than Neo classical economics. And the third part of my trilogy with, with Dennis is going to make that is gonna make that point.

Oshan (00:47:28):

Yeah, I, I want to, I really want to dwell on this idea of achieving higher levels of functional organization and the term functional organization. It's not flashy. Maybe it's a little obscure for folks not familiar certainly was for me, but it's actually, it's a really grandiose idea. And another way that you sometimes talk about this, what, what it means to increase functional organization is as expanding the boundary of what we consider an organism in, in your book that you wrote that you mentioned this view of life, you write that evolution is both the solution and the problem, the harmony and order that we associate with the word organism indeed has a movable boundary that can be expanded to include biological ecosystems, human societies, and conceivably the entire earth. And earlier we spoke about that distinction between CAS one and two systems, and the problem that the two systems composed of individuals following their respective strategies evolutionary science has found that these do not naturally or inevitably evolve or self-organized into CS one systems.

Oshan (00:48:32):

And, and this problem is exactly what makes the scaling up of functional organization so important that that is how we get from two to one, by expanding that boundary of what is understood as the relevant unit of selection, expanding the boundary of our system from composed of us individuals to components of a kind of singular unit. So I wanted to ask you specifically about what achieving higher levels of functional organization looks like in an economic context. What does it mean to expand the boundaries of what we take as, as organisms in, in terms of the economy? Is this a question of thinking about scaling up the, the, the kind of goal directedness of the economy? How do we think about this?

David Sloan Wilson (00:49:11):

Well, let me first of all, thank you for the question. I'm gonna give quite a long winded reply, but I think I'm gonna arrive at where we want to

Oshan (00:49:19):

That's good. We love those

David Sloan Wilson (00:49:21):

Arrive at, and I'm gonna start in biology and I've always felt that, you know, and all of the dealings I would, I'm, I'm almost always the only one who have had biological training and, and and I've always been thankful for that. And one of the hardest lessons to learn about nature, biological nature is that how often it is disharmonious and natural systems are often very often. In fact, most often CAS two systems, not C a one. The idea that nature left itself becomes harmonious that there's some kind of balance of, of, of nature is actually fallacious. Most natural systems are like most EZ, far economies. They're composed of species that are well adapted to survive and reproduce often at cross purposes with each other. And so for a natural system to become, to become like an organism just as with a human system, requires this process of selection at the level of the whole, of the whole system.

David Sloan Wilson (00:50:27):

And what we find is, and this is, this is all since the 1970s for very recent, at least by my, by my lights, that the idea that well, it begins with a cell biologist Lindmar Guus who proposed the theory that nucleated cells evolved not by small mutational steps from bacterial cells, but as symbiotic communities of bacteria. So, so basically these were communities that, that were once more fractious, but they evolved to be so cooperative that now the the, the, the group became a higher level organism. And then, and then that became generalized to explain other what's called major evolutionary transitions. So including the original of life is groups of cooperative, cooperating, molecular reactions. And so basically what we, what this means is that everything we call an organism such as a multicellular organism or a single cell is in fact, a highly cooperative group in which higher level selection, triumphed over lower level selection mechanisms evolved a suppressed, disruptive competition within the group, so that the group became the primary unit of, of selection. And so that's, what's taking place in biology and what needs to take place in human social systems. It's here that I feel like introducing Eleanor Ostrom and the fact that we haven't yet, I think it must have been on your list. So why don't you, why don't you set that up a little bit, and then I can, I think we can, we can introduce her because she's absolutely pivotal, pivotal, and then, and then we can continue with the story.

Oshan (00:52:12):

Yeah. Eleanor Ostrom is such a great embodiment of everything that we've been talking about, right. Especially how letting theory go UN empirically verified can become a straight jacket. She was a political scientist by training. She won the Nobel prize in economics for her work on how groups of people can successfully manage and maintain shared resources without markets or governments. And, and the context for her work is this kind of long standing idea and economics, which began as, as a hypothetical, purely theoretical thought experiment called the tragedy of the commons. And the basic idea is that if a community has free unrestricted, you know, whether by government or private property access to a shared resource, the commons that in following their own self-interest, everyone will overuse the resource and ultimately deplete it. So the tragedy of the commons suggests that managing resources as a commons doesn't work because everyone is self interested.

Oshan (00:53:14):

And so it's a tragedy that we can't manage resources this way, but instead we'll carve everything up into private property and provision resources via markets so that the market system can properly manage them. And they won't be depleted, right. There'll be an equilibrium struck. And what Eleanor Ostrom does is she decides to actually go into communities across the world that have resources that are managed as a commons. And just to observe what happens, do people actually overuse the resource and undermine its sustainability. Our market's actually these systems that can save us from ourselves and are self-interested nature. And what she learns is that there there's no iron law one way or another. We are into these inherently selfish creatures that will always overuse and deplete a resource at the expense of the community or collective be benefit. But neither are we perfectly altruistic. What, what actually matters is how good our design principles are, how well organized we are in managing the commons.

Oshan (00:54:13):

So she develops through observation, a set of core design principles. And these are things that, you know, you do a lot of work with in your paper and you actually generalize them in a really fascinating way. So I'll let you bring those in. But what she finds is that if a community follows these principles, then they very successfully manage their comments resource and generate collective benefit in a sustainable fashion. So Ostrom did kind of economics in the way that we were talking about if economics were to follow the lead of evolutionary science in that she took one of these core theoretical assumptions, tested it against what actually happens on the ground. You know, she held kind of theory accountable to empirical reality, and she found a significant dissonance between them. And it's in that dissonance that there's this great generative opportunity to exactly develop something new, a richer understanding or strategy.

Oshan (00:55:05):

And in her case, it was these design principles. Also, it should be noted that the guy who is credited with coining the idea tragedy of the comments, his name was Garrett harden. And he actually later retracted his claim a bit in the face of empirical evidence. He said that, you know, he should have titled his paper, the tragedy of the unmanaged comments, but of course that bit, you know, that correction didn't make its way into the popularized narratives around how we manage resources, at least until Ostrom's work, if not more recently. But, but anyway, relating back to your work Ostrom's principles, even though they were designed or derived from small particular communities, you've generalized them to help us think about how we can manage not only commons, but, but really any group, whether it's a local community or even a national economy.

David Sloan Wilson (00:55:54):

Yeah, thank you. I love the way you put it. And so you know, you understand it completely. And and so first let me list these core design principles, and then I will relate them as I did with her, because I was lucky to collaborate with her for three years prior to her death, along with her associate Michael Cox, with whom I still work. So first let me list these, these principles. And then I will generalize them from a multi-level perspective. So there, the groups that worked, the groups that were, were could self manage their resource, avoid the tragedy of overuse. Number one, had a strong sense of identity and purpose. They knew that they were a group, what they were supposed to do, what their resource was, who the membership was and so on and so forth. So a strong sense of identity and purpose.

David Sloan Wilson (00:56:40):

A number two, there was a a matching of cost and benefits, not the case that some memories of the group got the benefits and others did most of the work. It was, it was calibrated so that what you get from the group is proportional to what you give. Number three, decision making was fair and equitable. So not the case that some people were made, the decisions and other people were left out number four behavior was monitored. So that agreed upon behavior was you know, whether you're doing what you're supposed to do or not number five, graduated sanctions. If you're not doing what you should, then something needs to be done about it, but it can start out friendly, need not be harsh, but does need to escalate as necessary, a six fast and fair conflict resolution conflicts will occur and, and they must be resolved quickly as quickly as possible.

David Sloan Wilson (00:57:33):

And in a way that's regarded as fair by all parties. Number seven authority to self-govern a group has to have elbow room in order to govern its own affairs and number eight appropriate relations among other, with other groups, which we replicate the same principles. And so that's very important. I'm, I'm going fast, but it's it means that these principles are scale independent. Mm they're. Needed to govern relations among groups in addition to relations within groups. And so the scale independence is tremendously important. We could use these ideas to discuss the dynamics of a small group or nations in the global village. And so, and so that's just our general they are now, I think when you, when you look at those against the background of multi-level selection theory, we can see that in a group that implements these core design principles strongly you, it would be hard to play the single game of monopoly.

David Sloan Wilson (00:58:36):

Just try, just try, you know, selfishly getting your way in a group in a group like that. It's like, it's like an organism that's well protected against cancer, but in a group that doesn't implement these core design principles and that's easy picking for disruptive self-serving behaviors. And so that's the mapping and the generalization of of the core design principles. And so what we predicted and what is really can be confirmed to be true, there's really, shouldn't be no doubt about this is that this applies to all groups, all groups, where people are trying to work together to get something done, which means all meaningful groups doesn't matter what that thing is. Any topic, any topic, these core design principles are important because they basically, they concentrate selection at the, between group level. And they suppress just like cancer suppression mechanisms, the potential for self-serving behaviors within groups.

David Sloan Wilson (00:59:39):

And it's armed with that, that we can begin now to actually in a policy sense, we could work at all scales. And so I could then what we do in the, in what will be part two of the, of the of the trilogy, give example, after examples first at the scale of small groups, then at the scale of manufacturing, using Toyota, as an example, we can talk about that basically Toyota lean methodology, which is a process of selection and organization at a, at the scale of you know, an automobile manufacturing plant. We can talk about the smart cities movement at a larger scale. We can talk about national forms of governance everything from LA fair to socialism, and of course the best are in between. And so we can then apply these same principles to and all of this is basically the process of converting CAS two systems into CAS, one systems at these, these different scales. And in each, each one of these, when we describe them, it's just like saying, yeah, it's more difficult when you go up in scale, like a smart city is more difficult than a smart automobile assembly plant mm-hmm <affirmative>. But the problem is, is, is similar in kind, what we have to do is similar. The blueprint is the, is the same.

Oshan (01:01:10):

Yeah. And it's, I, I know too that you've, you've actually put this into practice. I was just listening to you described a project where you went into the school system in Binghamton, took kids who were struggling with school applied Ostrom's these kind of generalized core design principles and got really wonderful outcomes. And it it's really, it's really handy and useful that these principles can apply at that scale. You mean, you know, they can apply for a company like Toyota. They can apply for the UN or how the us thinks about policy. So yeah, the, the scale independence of these principles of what is, what makes him kind of such a, a useful tool for thinking through policy? I thought that was a really nice, a really nice touch.

David Sloan Wilson (01:01:48):

Yeah. And the, I mean, the first time I applied this, as you said, was in a the design of a school for, at risk youth. And we it's like, we hit the jackpot the very first time we built this school and put in the co design principals in the students responded not just within the first year, but within the first quarter of the first year. And now is that really bears examination. How, how did this work so quickly? Right. And the reason is I think I have a little article titled the parable of the turtle in which we're all like turtles, who can either pull into our shells in a dangerous situation or come out of our shells in a safe situation. And when you get I mean, a, an at-risk youth is basically a turtle that's been pulled into spends most of his time in inside his, his shell, because it's such a harsh environment, but what they, what, what a group design with the core design principles does it basically it provides a safe and secure environment.

David Sloan Wilson (01:02:47):

If you, if you enter a group that's governed by the core design principles, just you look around and you can see that it's safe to extend yourself. It's, you can exercise your prosocial nature. You can be, you can be nice. You could work hard knowing that your effort will not be exploited. And it does not take long to make that assessment. And so what happened was that these kids who were like very, very hard lives and we didn't have the way to change their lives other than the school environment. But when they entered that school environment, soon enough, they realized I can come out of my shell and they did within the first quarter. That's what it means to change the social environment so that the expression of prosocial behaviors can take place. It's, it's very simple and it's very powerful. It's optimistic in a world where so many people are giving up hope. There's such optimism in, in being able to say, we can create social environments that enable pro sociology to thrive, and it can take place in any context, business, family, school, neighborhood, you name it. We can do it.

Oshan (01:04:07):

One thing that I I'd like to hone in on in the paper, you actually provide a, a new definition of economics and you make it explicitly about wellbeing as opposed to efficiency or growth. You and Dennis, you wrote, we propose that economics be defined as the discipline that explores how resources, goods, and services can be mobilized in the pursuit of wellbeing in thriving societies now, and in the future. And of course, wellbeing is something that is notoriously elusive to define if you really drill into it. And especially difficult to design for at a structural level, given how complex multidimensional it is. And, and, and folks can have conflicting ideas about what the stuff of wellbeing is, or certainly how to, how to achieve it. So I wanna focus a little on how you work with the question of what wellbeing is within this framework, because you do give a lot of attention.

Oshan (01:04:55):

And I think coming from evolutionary science, you can bring a lot to this. And at, at heart, it seems like wellbeing in the multi-level paradigm is an irre duly multifaceted thing, which is to say that you advocate for a, a dashboard approach as opposed to a single metric, right? You, you guys wrote that human wellbeing is a product of selection and replication in response to variation. Our wellbeing is multifaceted covering material, a agentic and communitarian needs and purposes and context dependent so that the relative salient of our various individual and collective goals depends on our physical and social contexts. Consequently, it is not useful to integrate all components of wellbeing into a single metric and progress should be assessed, not just in terms of economic growth, but also in terms of meeting our needs for empowerment, social solidarity, and sustainability. So can you expand on this a bit from the view of evolutionary science, what is wellbeing and what role can economics play in, in helping raise it?

David Sloan Wilson (01:05:58):

I mean, one point to make quickly is that there is sort of like Maslow's basic hierarchy of needs. We could say in general, we all wanna be healthy. We all wanna be well fed. We all want to be, we, we, we from violence and exploitation. And so I think that there's some, some basic basically that are, that are universal, but beyond that, then then it does bifurcate and it becomes much more contextual a part of this is that it must be participatory. You can't, you can't tell other people what their welfare is. They, they, in some respects, they need to tell you and so participation at all levels. And this is actually a pretty big deal because, because you know, in standard economics, equity is just not part of what's being max maximized here. And it's actually

Oshan (01:06:50):

At odds with efficiency, right?

David Sloan Wilson (01:06:52):

Negative, yeah. Efficiency and so on, but here it's fundamentally democratic and equitable. And so that's really, really encouraging. And so it will be multifactor, it'll be very contextual. And we always have to be asking at any level what's best for us, but also is that causing harm elsewhere in the system. And so we must be having some sense of systemic welfare, which coordinates what takes place at lower scales. And so I think that there's some level at which like, and Dennis is doing this, and I think you are too that when we go beyond just a single metrics, which economic metrics, maybe there's like four or 12, or like the sustainability goals, or like, you know, donut economics, or that's getting more and more into a dashboard approach. And I think that's still missing the contextual nature. At some scale, you can't, there's, there'll be no single a dashboard. You're just gonna have to see in a particular context, you know, what is it that we need to do? And then you need to just build, build the, the dashboard around that particular context. And it sounds complicated, I suppose it is, but it's the only way to proceed. And it's a more small world thing. We talked about small worlds with models. So this is a small world in, in the application is we need to just figure things out in a given often quite particular context.

Oshan (01:08:30):

So wellbeing, I really like this point you made about given how multidimensional and irre reducible wellbeing is. We can't collapse it onto one thing that you have to make the process participatory that you have to give people kind of on-ramps to participate in the process and, and, and deliberate over what it means and kind of the structural dimensions of how we build around it. I think that's really, that's a really interesting way to frame it. And I, I wanna move into another term. You use a lot managed cultural evolution. We've, we've explored kind of how raising the functional organization of society can play this role in, in driving progress and, and wellbeing. And we've touched on how this doesn't happen naturally, that evolutionary science kind of contradicts the invisible hand thesis as actually, we need an act of hand and this process of intentionally designing an economy, so has to scale up the organization towards the CAS one system.

Oshan (01:09:22):

This is what you call managed cultural evolution. And I, I really want to get into some details of what this looks like in practice. We've touched on this with Ostrom's principles with the school in Binghamton, but first let's pause on, on this term and flesh it out a bit. You've spoken about managed cultural evolution as the middle way between a kind of pure, let's say fair economy on one hand and centrally planned economies on the other. We can think of the Adam Smith kind of utopia of, of a neoclassical economy. We can think of maybe Soviet Russia on the other hand. And I'd like to push a little deeper into that because if we look at the various economies today or the discourse, millets take the us how the us should be handled almost no one's is actually advocating right, for either pure, let's say fair, pure central planning.

Oshan (01:10:06):

Instead, the issue seems to be everyone is arguing for their own interpretation of what managed cultural evolution should look like, what the common good that our system should serve is, and the policy infrastructure that might get us there. And I don't know, but I, I don't imagine that managed cultural evolution is such a wide umbrella that everything, you know, in between these two kind of ex extremes fits. So I wonder if there's any more definition we can give to what an evolutionarily informed process of managed cultural evolution in terms of economics in term of economic policy might call for,

David Sloan Wilson (01:10:42):

I had an opportunity to, to do some work with the Marion Kaufman foundation, which is one of the main foundations interested in entrepreneurship which we call evolution complexity in the third way of entrepreneurship and the thesis of that, which you briefly alluded to is that there's two things that don't work. And only one thing that does work EZ fair doesn't work. We've discussed that centralized planning doesn't work because the world is too complex to be comprehended by any group of experts. So if those don't work, what can work a managed process of cultural evolution, where we have a systemic goal we, we orient variation around that goal, that target of selection, and then we replicate best practices. That's a managed process of, of cultural evolution. And just let me unpack it a little bit. A Darwinian process is any process that includes the three ingredients of variation, selection and replica application.

David Sloan Wilson (01:11:49):

That's the Darwinian triad and a managed process of cultural evolution, conscious cultural evolution basically manages those three processes. It it's, it's, it's, it's conscious about the target of selection. What are we trying to accomplish? And it's conscious about orienting variation around the target. What are the different ways we might do to reach this goal? And it's conscious about replicating best practices, because even when we, when something works causing it to persist and to, and to, and to come into exist in someplace else, that requires a lot of work. And so basically conscious evolution sounds abstract, but really as being conscious about the three ingredients of a Darwinian process, selection, variation, and replication. So we go on to say, if that's the only thing that can work is the only thing that ever has worked. And so, and so if you actually look at examples of positive change in the past in history or in the present, you will find a managed process of cultural evolution.

David Sloan Wilson (01:13:02):

Maybe it wasn't described that way. Maybe the people didn't think about it that way, but that's what they did because it's the only thing that works. And so we then demonstrate that basically illustrate that for governance at the national level, a development level it's real and inter international development. At first, the smart city movement entrepreneurship done, right? You name it. If it resulted in positive change, it was a pragmatic process of experimentation where people had, they had a goal, they pursued the goal. It was a managed process of cultural evolution, even if the even if not using those, those words. And then there's a tremendous added value in understanding what that is and being more explicit about it.

Oshan (01:13:54):

So to manage a process of cultural evolution, we need to intentionally orient variation around a, a particular consciously deliberated and chosen upon target, and then design an environment where whatever variations seem to work well can be selected and replicated upwards. But this is interesting cuz it kind of introduces a problem, which is that as per your definition of economics, the target of evolution is stated as wellbeing now and in the future, but wellbeing is very ill defined, right? It's a very kind of a nebulous target. It's situational, it's contextual. It's not one stable entity that can be abstracted out of situations and plugged into optimization equations and, you know, provide a clear guide of how to orient variation around it. I mean, again, I think that you could see much of the history of political economic discourse as the history of people arguing about how best to orient economic variation around wellbeing.

Oshan (01:14:56):

So I'm really interested in how the position that you're beginning to describe with Dennis in the paper might not only help us kind of affirm our general commitment to orienting variation around a consciously chosen target, but also about being more concrete in this kind of particular moment and, and defining what the target is and how best to orient variation around it. And to my mind, your focus on Eleanor Ostrom's core design principles is one strategy for doing this. And so I'm curious how you see the relationship between her design principles and orienting the variation of an economy around targets of wellbeing, you know, are her principles kind of these more concrete strategies that have an inherent tendency to produce outcomes in line with this evolutionary vision, right, is the, the pragmatic action item of the multi-level paradigm to implement her principles at all scales?

David Sloan Wilson (01:15:52):

Well, actually not. I'm glad that you brought that up. It's a, a separate set of principles have to be brought into play the O Austrian principles. Basically they, they make you well adapted to your current situation, but they don't necessarily make you flexible, adaptable. And so the difference between being well adapted and being adaptable is a very important distinction. And, and I think, let me bring in Toyota here, because it's such a great example. Cool. And it's an example. That's well known to some and totally unknown to others, but basically in a Toyota plant in the old days, they had these ropes hanging down from the ceiling along the assembly line. And every time there was any kind of minor dysfunction, then the assembly line workers were instructed to pull the rope. It was called an end on, and that would then result in a swarm of activity to solve that problem.

David Sloan Wilson (01:16:45):

And then when they had what candidate, so there's your target of selection, then, then you have a when you think you have a solution, they would implement that solution, very cautiously and they'd monitor its effects on the system as a whole, because in an assembly line, of course, if you change one little thing, that's gonna cascade throughout the whole right process. And so now they're asking, you know, is this actually, is this change gonna result in a benefit to the whole system only then do you incorporate that change? And so I think you can see, well, how marvelously that is a managed process of, of cultural evolution. Of course, the performance of the whole plant is, is the target of selection. Every problem results in a little bit of, you know, variation oriented around that. And then you replicate the best, the best practice.

David Sloan Wilson (01:17:38):

And so that, that's what makes a Toyota plant an evolvable a continuously improvement, they call a continuous improvement. And that's what was so revolutionary and is well known in, in business circles with lean methodology and, and and, and and so forth. Now, now let me tell you a story about smart cities, if I might and something called 3 1, 1, which is a three digit telephone number that you can call, not for an emergency, that's what 9 1 1 is for but to report any minor dysfunction. And so you can see three 11 is like an end on pole. Right? Right. So isn't that amazing? Yeah. And it actually began as a cultural mutation in the city of Baltimore. They invented three, one to handle calls that were inappropriate for 9 1 1, and then soon enough they realized the three 11 was useful all by itself.

David Sloan Wilson (01:18:37):

And they described it as the eyes and ears of the city. And that's such a great metaphor because a smart city needs perceptual organs. And in this case, we're building in a way for any resident of the city to signal a dysfunction much like an automobile assembly line worker. Although in this case as you might imagine implementing 3, 1, 1, and getting people to use it, you can't instruct them to use it. Like you can, if, if you're an assembly line worker, you have to have other ways to do it. You have to make sure that it's unbiased. So a lot of design has to go into implementing 3, 1, 1, but after you've done. So you've turned the city, you've made the city a little smarter. Mm haven't you, and so, and so that's a great example of how the same principles can be operative at different scales for a automobile assembly plan or a city. And of course, the world,

Oshan (01:19:41):

One of the primary kind of axes of differentiation between various visions of the economy today that I see is the, the degree to which one thinks that public ownership of anything really should be a part of the equation, right? We're, we're coming off of a paradigm over the last 40 years where the general rule was, if you can privatize something, you do it. The private sector is more efficient, more dynamic, more capable. Markets will be a more effective method of provisioning, a resource or a service, you know, than any public ownership or, or government involvement. And we're in a really interesting period where these assumptions are being reshuffled a little bit. There's a lot more mainstream exploration of the role that the public sector can play in both provision and goods and services. You know, whether we're talking about healthcare, education, housing, the internet or even participating actively in shaping markets or in the investment process, you can have something like social wealth fund, public investment banks and, and these kind of public mechanisms that allow investment to follow perhaps a different set of incentives than markets, sorry, ones that maybe align with social welfare of a kind of system at the whole, but maybe don't have dazzling monetary returns.

Oshan (01:20:49):

And, and you can go either way on this. And I'm curious if this is something you thought about the relationship between public provisioning and ownership and managing cultural evolution, do you see any role for the public sector in this process?

David Sloan Wilson (01:21:01):

Yeah, for sure. And, and it always has, I mean, you have great voices like Marietta Moscato. Yeah. Talking about, I mean, it's a myth that the private sector does things better than the public sector. Every, every techno technological innovation, she will say originated from a government program such as the military or the space program or, or so on. And then all of the tech companies that you know, they were massively subsidized by the government remains. So to this day. And so I think that we have to, we have to just become clear about that from the very beginning, but but and to, and to dispel some of these myths that are very individualistic and attribute far too much to the individual. And so, and the best examples of, of governance at a national scale are the social democracies, for example, the Nordic countries, which are basically top, top the charts and, and everything.

David Sloan Wilson (01:22:01):

And they're what you find is you find a, a strong, collaborative relationship between the major sectors of society. That would be the state labor and business, all strong, all strong, right. And, and, and work together at a collaborative spirit, a specific example of that is called flex security, which I think developed in Denmark, but it's also practiced in Norway and, and and elsewhere. And what that means is that the market, I mean, the, the market has to be agile, especially if you're a small country like Norway or Denmark, you really have to be responsive to the international market. And so that means you have to, you have to be able to fire and hire people at short notice. And so how can that be acceptable to labor to the labor unions? And the answer is by having a really strong social security yeah. System so that if you do get fired and then you're on welfare, but welfare is like, like 90% of your total income for a period of two to four years. And that gives you time to retrain and so on and, and so forth. So there's flex security bus business can be agile and it's still secure for the workers and that, and people had to have the whole system in mind in order to put that together, just like three 11 or, or the end ons

Oshan (01:23:29):

To, to add to that. It should be noted that Adam Smith himself, the way that he defined perfect Liberty was actually exactly this, that workers and on both ends workers and, and employers, but workers should be free to leave employment as often as they like in search of, of a better fit. And conversely that, you know, companies should be able to fire to, to whatever degree that, that they deem necessary and sort of a better fit and the way that you make that possible. I mean, right now a large chunk of the economy can't just quit their job if they don't like it, right? The, the, the safety net does not permit them, that kind of safety. So it's a really interesting kind of symbiotic relationship.

David Sloan Wilson (01:24:04):

And Adam Smith was so much more nuanced than the metaphor in the invisible hand. He, he invoked that metaphor three times in the entire Corpus of his work. And so to, to associate Adam Smith with this invisible hand metaphor is such a gross oversimplification that you've really gotta become more sophisticated than than that. But what one point to make is the need for entrepreneurship and the need for it's not as if competition is a bad thing competition is required for some practices to replace others. And so we need competition with a vengeance. We need rapid social change, and that means some things out competing, other things. And so it's basically the selection criteria that is, is what we have to work on. And it's here where commons arrangements is are really, there's a resurgence, basically the shareholder value model and profit motivation, motivation such as an advertising model. It's just, it's gonna fundamentally, it's not gonna be for the common for the common good. And so commons oriented, commoning of various sorts of many sorts as I think, really proving to be the wave of the future.

Oshan (01:25:22):

Yeah, I've been, I've actually been doing a lot of reading recently in there, there in the past, maybe 15 years, there's been a lot of work in the theory of kind of delineating what kinds of resources are best managed via market mechanisms, what are best managed as commons and so on. There's a lot of really interesting work here actually hoping to dig into that future episodes. Good, but I'd like to move in a little different direction at the beginning of our conversation. I asked you, you know, from your point of view, what is the point of the economy? What is it for, what does economic progress look like if not just higher GDP charts? And I think that one way to see your work in regards to economics is to, to understand the economy as a system that offers us incredible leverage in playing a role in our own evolution, right?

Oshan (01:26:11):

That through designing our economic environments, we can orient variation around particular targets, as we've been talking about, and we can structure our social and cultural world in a way that biases outcomes towards pro-social cooperation in the same way that changing the rules and, and structure of a game of monopoly can change. Whether it makes sense for people to be primarily competitive or cooperative, we can make those same kinds of economic interventions that make cooperation reasonable and in doing so, we can increase that functional organization of the economy that the boundary of the organism. And one of the things that I, I love about your work is that you aren't scared to call this project spiritual, right? In, in one of your recent books, this view of life, you explicitly frame it as a follow up to te hard day Chardon's book. The phenomena of man, where, what he describes is the, the progressive evolution of consciousness, I think has a lot of resonance actually, with what you're talking about with, with raising levels of functional organization.

David Sloan Wilson (01:27:14):

Yeah. And it was, and it was te hard who said, consciousness is evolution reflecting upon itself. He was, he, I mean, he made so many inscrutable our remarks, but that one, you know, consciousness is evolution reflecting upon itself is you know, really provocative and, and is as a very large grade of truth.

Oshan (01:27:33):

Yeah. Oh, that's beautiful. Consciousness is evolution reflecting on itself. And so there's also there's a quote from your book that I wanted to bring in here where you write our journey ends with a reflection on how the secular imagination and the religious spiritual imagination can converge on the conscious evolution of our collective future. It is striking how these two imaginations often seem at odds with each other yet both arrive at the same conclusion that the concept of organism has a movable boundary, which must be expanded to solve the problems of our age. And one of the reasons that I love this kind of consilience between science and spirituality is because so much of the, the past few hundred years have seemed as, as if a, a progressive privatization of questions that venture into the spiritual, right, where each individual has gained the freedom to have their own conception of whatever spirituality means to them. But in the process, the social organism, the social structures that we create for ourselves have been drained of that sort of, of vision and inquiry and deliberation. And it seems to me like one feature of your work is really to provide a foundation to reintroduce questions that are rooted in these broader ideas of spirituality in tey and purpose. Even questions about the direction of evolution back into the collective social discourse. Is that a, is that a fair read?

David Sloan Wilson (01:29:04):

Yeah. Well, in the first place, thank you. And in the second place to say just a little bit about spirituality, I think that, that when we think about society as an organism, we really can explain what we mean by spirituality as, as the psychology of of the individual embedded within a highly cooperative group. And it's there where spirituality can become joined with economics, something which is, would be wouldn't that be something is that, you know, I mean, with economics, without being spiritual about it, where I trying to create some kind of system that benefits society. So but to actually see that the spiritual impulse is going in the same direction. And so one of my goals, it's a personal goal and a, and a societal goal is that we could really be, we could really bring spirituality together with science and economics and, and everything else would be to have more consilience across those different domains of of thought. I think that's part of, part of what we're reaching for.

Oshan (01:30:09):

Yeah. Hmm. I think that that's a perfect place to draw this down to a close. Is there, is there anything still lingering for you or did we drain the tank?

David Sloan Wilson (01:30:19):

Nope. Nope. I think that's great. And thank you once again for being so so well informed basically, and I'm, I'm very, very happy that our, our, that long paper with Dennis the first of three are really found a mark with you in that you've really absorbed it beautifully. And and and we can now pass that on to our, to our listeners.

Oshan (01:30:44):

Yeah, absolutely. And, and for folks listening parts two and three are forthcoming I'll link part one in the show notes. I cannot recommend it enough, David, thanks so much for the time.

David Sloan Wilson (01:30:53):

Good. Thank

Oshan (01:31:03):

All right. That'll do it. Links to David and Dennis's paper and a selection of David's other work are available on the show page. You can find that at using and click on David's episode, if you listen to the previous episode with the biologist Michael Levin, you might have noticed that there's a ton of resonance between what David spoke about today in terms of scaling up the functional organization of a system where the boundary of what counts as an organism and Michael's work on quite literally how at the cellular level smaller systems scale up into larger systems. So I'm, I think I'm gonna put together a kind of crossover episode where I'll splice in segments from both interviews to, to show kind of where and how they resonate and how, when they, when they hang together they really build on each other to tackle larger and larger questions. When that comes out, it'll be, be available to Patreon supporters along with a few other patron only episodes. And with that, I thank you for listening and I'll talk to you next time.