ABSTRACT OF PAPER
Title: One Analogy Can Hide Antother: Physics and Biology in Alchian's Economic Natural Selection
Author: Levallois Clement
Today, Armen Alchian’s « Uncertainty, evolution and economic theory » (1950) is hailed by evolutionary economists as the single piece which resumed an evolutionary brand of theorizing in economics, after the eclipse of the interwar period. On the other side, Alchian’s article is also cherished by standard economists who consider it to be a powerful defense of the maximization principle in the theory of the firm. We examine here the early intellectual life of Alchian and his later activities in the RAND Corporation to provide some context to his treatment of uncertainty, central to his article. Our study shows that it was his involvement in military systems analysis that led Alchian to reckon that uncertainty was a fundamental obstacle to marginal analysis. We argue that Alchian’s economic natural selection is a statistical argument addressing the problem of uncertainty and which, if phrased in biological parlance, owes its logic to statistical mechanics. Arguably, this reconsideration could inform the current debate on what is a properly evolutionary perspective in economics.
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