What are 'Evolutionary Economics '

Evolutionary economics is a term coined by Thorstein Veblen (1857-1929), an American economist and sociologist. Veblen's evolutionary economics drew upon anthropology, sociology, psychology and Darwinian principles. Veblen's work was expanded upon by Joseph Schumpeter and several other economists in later years.

BREAKING DOWN 'Evolutionary Economics '

Evolutionary economics proposes that economic processes evolve and economic behavior is determined by both individuals and society as a whole. This is different than traditional economic theories which view people and governmental institutions and entirely rational actors. Evolutionary economics seeks to explain economic behavior and progress in relation to evolution and evolutionary human instincts such as predation, emulation and curiosity. Evolutionary economics explores how human behavior, such as our sense of fairness and justice, extends to economics.

Evolutionary economists believe that economic organization is a dynamic process involving ongoing transformation, and that economic behavior is determined by both individuals and society as a whole. The creation of goods and the procurement of supplies for those goods involves many processes that change as technology changes. Organizations that govern these processes and production systems, as well as consumer behavior, must evolve as production and procurement processes change.

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