Competition in the Darwin Economy and Living Systems
Keywords:competition, evolution, living systems, decider subsystem, monetary system
In his recent book The Darwin Economy Robert Frank predicted that Charles Darwin would replace Adam Smith as the father of modern economic theory. Darwin observed that natural selection tends to favor traits that make individual organisms successful even if those traits inhibit the success of the species. Darwin also noted that what counts is success relative to one's competitors rather than absolute numbers of progeny. Frank showed that these insights apply equally well to problems of economic competition.
In making this argument, however, Frank ignored the fact that such competition often involves interaction among multiple levels of living systems and that the loyalty of deciders can become quite compromised in these interactions. On the other hand living systems theory has ignored Darwin's insights, perhaps because it is unclear how they apply to upper levels of living systems. This paper attempts to bring together modern economic theory, living systems theory and evolution theory to see how each might contribute to an improved understanding of competition in monetary systems.