She who understands the fruit fly would do more for economics than Adam Smith

“He who understands baboon would do more towards metaphysics than Locke” – Charles Darwin, Notebooks

Inspired by a consilient Darwin, I have titled my new paper, "She who understands the fruit fly would do more for economics than Adam Smith."

I am continuing my work using experimental evolution to improve economics (previous post here). I label the effort to place economics on a natural science foundation as one of the greatest long-shots in the history of science. Read below for the introduction to the paper. Click here to read the full text

Slime mould in experimental evolution study on risk-taking

Economics is a field in quiet crisis. The cause of the crisis lies at the foundation of the field, in a controversial, and empirically-challenged, set of axioms regarding human nature.
Economics is a Cartesian field where results are derived from a small set of assumptions. As such, the unresolved issues regarding the axioms are particularly crippling to the field. ‘Preferences’ serve as the foundation of economics. Canonical economics assumes that people have preferences (i.e., tastes) over goods, risk, time, and the happiness of others, and given those preferences, each individual makes the best decisions for herself or himself.
Cartesian systems are powerful because they allow strong, unambiguous conclusions (e.g., If two lines intersect, then they intersect in exactly one point). Economics is unique among the social sciences in deriving results from a set of axioms. However, because Cartesian systems draw strong inferences, it is essential that the axioms be incontrovertible.
Economics is justified, therefore, in making strong statements only if the axiomatic assumptions regarding human nature are correct. However, there is a substantial behavioral economic literature challenging each and every axiom of economics (see Table 1).
Table 1
The axioms of economics are controversial
Economic axiomMainstream economic viewBehavioral economic view
Decision-makingPeople optimize by picking the best, feasible optionPeople often make bad choices
GoodsPeople have consistent likes and dislikesPeople have inconsistent likes and dislikes
RiskPeople make good, consistent decisions regarding riskPeople make bad, inconsistent decisions regarding risk
TimePeople make good, consistent decisions involving multiple time periods. Often this assumption takes the form of exponential discountingPeople make bad, inconsistent decisions involving multiple time periods
Other peopleIndividuals care about themselves and derive no pleasure or pain from the fate of othersIndividuals are sometimes altruistic in sacrificing for others, and at other times, individuals are spiteful in obtaining pleasure from other individuals’ displeasure
In addition to being disputed, the axioms of economics are taken as given from outside the field (‘exogenous’). Therefore, economics faces a serious barrier to progress because preferences, the foundation of the field, are ‘axiomatic, controversial, and exogenous.’ (Burnham et al. 2015)
Is free trade good? The conclusions of David Ricardo, and other economists, regarding the consequences of free trade are valid only insofar as the axioms are correct. Every economic theory is similarly speculative, because all economic theorems are derived from axioms that are unproven.
The crisis in economics is caused by its foundation in controversial, and unproven, axioms regarding human nature. Experimental evolution allows the empirical study of these core assumptions, and, as such, holds tremendous potential to improve economics.

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