All of these are spontaneous self-starting processes. When we look at “evolution” we know to look at the many types of species and their evolutionary relationships, in today’s view, genetic phylogeny. When we look at “ecosystems” we know to look at the patterns of species diversity and distribution. So they are not the same viewpoint, but they are made up of the same things. When we look at economies, I am willing to bet most people do not separate the two major aspects of the economies — the range or diversity of types of economies and their evolutionary relationships derived over very long periods of time and in addition the patterns of economic species diversity and distribution in a region.

Natural evolution has no ultimate goal, no defined milestones, no direction, and no purpose. The results of evolution are on-going rudderless experiments. Each element in the experiment has only two major objectives, survive and reproduce. Organisms respond to the entire range of conditions that make up their environment. Natural selection is a blind tool choosing those genes that allow individuals to survive and reproduce best. Only one species would exist were it not for naturally occurring variation. Diverse conditions lead to diverse species. While there is no natural management of evolution, there are well-known examples of artificially managed evolution. Continue reading →

The classification of ecological types and zones into major terrestrial biomes is as follows:

Mountains (High Elevation)
Tundra
Temperate Forest
Marine/Island
Desert
Tropical Dry Forest
Cold Climate Forest
Grassland
Savannah
Tropical Rainforest

Each of these biomes has a special set of physical conditions within which it exists. The naming is essentially derived from those physical characteristics and the most important types of primary producers that are found there.

The classification of economic types is … well all over the map.
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Determinants of diversity in an ecological economy. What in the heck does that mean?

If we look at a wide variety of ecosystems, some are much more diverse in the number of species than are others. If we look at economic systems in the world today, some are very diverse in the number of “economic species” — sets of similar corporations. Economies vary from a low number of economic species, and a low number of individual corporations or entrepreneurs, to high levels of diversity and individual entrepreneurial entities. On the face of it the determining factors to create these four extremes seem simple enough. The greater the energy source(s) and the more abundant the raw materials, the easier it should be to have both high levels of individuals and economic species within any system. In actual biological examples this simple equation holds up for “simple” ecosystems.

Oh, and I should comment that ecosystems and economic systems as I use the terms are fundamentally in geographically defined regions. On a very broad scale, of course, both the economies of the world and the ecosystems of the world are global in scope, but the two ecol and econ systems are regional, even the current largest economic systems are based on based in a geographical region.
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Just like natural ecosystems, economic systems flow both energy and raw materials through them. But unlike natural ecosystems, today’s economic systems are very primitive, undeveloped and crude in their use and division of resources and use of energy. Most natural systems rely on an infinite supply of energy (the sun) and are limited by raw materials. The current economic system has moved to finite fossil fuels for energy, so will be limited both by raw materials and energy.
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While the prevailing wisdom so far considers the competitive forces in economy to be similar to those of evolution, in the preceding posts, I have argued that the better model is ecology. An ecological model can also be characterized by the catch phrase “Survival of the fittest”.

Furthermore the time frame for an ecological model of competition is much more reasonable than for evolution. Ecological changes are visible in time frames that range from a few hours to a hundred years, whereas evolutionary time frames are more on the order of thousands of years at a minimum — even for economic evolution.
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A Beginning Taxonomy Using Biological Templates for Economic Types

The derivation of an ecological model requires a definition of the evolutionary units on which the ecological competitive system can operate. Here is a preliminary and hypothetical table of natural and economic analogues for purposes of testing the hypothesis. Evolution, of course operates on the genetic level, while ecology primarily operates on individual level. The expression of both ecology and evolution that we see around us is the complete biological environment, and the same is true for the economic system. We see it all, but in both cases what we see is really the result of intertwined simple processes that can result in amazingly complex and intricate products, if given enough time. To create sensible new words is difficult, so I will use a slang term for money as the base root for the taxonomy. The slang term is “lucre” as in “filthy lucre”.

Much has been made of the relationship between evolution and the economy, especially at the early stages of modelling the free market and again in very recent years. While beneficial use can be made of the principles of evolution in economic systems, they are not suitable for understanding or managing economies in the time scale of human life spans or even over the span of time a given country or regime survives.

Natural evolution is a spontaneous process that has no predetermined milestones or end points. The progression of evolution is completely dependent on the random variation that occurs at the genetic level in the cells of the organisms. The basic genetic code combined with these random variations, usually small, determine the characteristics of individuals in the population. Natural selection, often characterized as the “survival of the fittest” operates by eliminating individuals or reducing the numbers of progeny from the group who do not compete well against other individuals. We see these changes as gradual shifts in the characteristics of a species or of losses, gains, and changes in species composition over vast periods of time. Noticeable species changes from evolution in nature are usually not apparent in time spans less than thousands or tens of thousands of years. The natural selective forces act on the DNA are mediated by the individuals and are seen as species changes.
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In a previous blog, I demonstrated that the correct model to use as the basis for capitalism and free markets, is not evolution but instead it is ecological. The implications of this are critically important. An ecological model predicts what we actually see in the marketplace when capitalism and free market operate. Corporations get larger and larger, sequestering resources away from smaller corporations which then die from the competitive pressure. Labour is an expendable resource. Thus “the survival of the fittest” competition results in big corporate gorillas dominating the marketplace.

In society, if this is the desired result, there is no need to impose any controls other than enforcing the rules for the right to life, liberty, and property. On the other hand if that is not the desired result then some modifications to the rules or imposition of new rules will be necessary to reshape the variables and hence the results of competition.

It is also important to understand that the only people in the equation are entrepreneurs. Employees, workers, unemployed, subsistence level people, etc. are either not included or become resources to be used for the purposes of the corporation as long as they cannot be replaced by a more efficient machine. Here is Helen Keller’s notion of the situation.

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Hayek and Friedman’s attempts to use evolution as a model for capitalism is fatally flawed. The correct model from nature is ecology. With an ecological base for the “survival of the fittest” principle, observations match predictions in the real world. Nevertheless, evolution can be a useful to model the long-term changes in economic forms (the equivalent of species, or families of economic systems).

Natural selection in evolution works at the genetic level, is mediated by the individual and we see it operationally at the species level. Because of the way evolution works, it builds on the inventions of ancestral forms. Evolving new species must use the tools provided by the extant organism, it cannot use other organisms and it can only invent new structures by modifying or eliminating old ones. Evolution takes place in the real world in an ecological context. Evolution takes an enormously long time, thousands of years is the usual minimum time frame to create a new species. The evolution of entirely new groups of species (genera, families, etc.) requires almost unimaginable periods of time, stretching into millions of years. During time frames of millions of years, the entire world climate conditions can later dramatically. Entire continents can move to separate large assemblies of species, separating populations so multiple groups of animals and plants can be undergoing speciation at the same time.
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Competition in a capitalistic economy is often said to be beneficial because it follows a similar principle to competition in a natural system. The common wisdom of this notion is that the operation of either natural or economic forces will ensure the “survival of the fittest.” The phrase is derived of course from the work of Darwin in describing his interpretation of the result of natural selection working to winnow out animals or plants less-well adapted to their environment. Because of the natural variation that occurs amongst individuals within a species, eventually fitter species will either develop or overtake another species that is competing for the same critically important resource. In a very sloppy way, competition in a free-market economy is said to operate the same way as natural competition, winnowing out the corporations that do not compete successfully and leaving in their place more successful ones. Economists also use the word “adapt” to imply a similar process will also force a corporation to change to meet the challenges of a changing economic environment or die.

This uncritical comparison has become the foundation for a dogma that rules the thinking of many economists and therefore many politicians and the general public. The image of a well-balanced natural world with a remarkable and finely-tuned set of inter-relationships in an ecosystem is laid gently on top of the economic system as if it were transparent film to suggest that this is how free-markets and capitalism will end up if they are left to their own devices.
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For people, everything, and I do mean everything, ultimately depends on our sun and our planet. It’s pretty simple. If you take away or screw up either of them people cease to exist – period, end of debate.

Have you ever wondered why industry is so environmentally unaware with oftentimes huge collateral damage?
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Capitalism does not necessarily need employees so does not value them except as tools to produce or distribute goods.

Markets existed for thousands of years before “capitalism” emerged on the scene. Individual enterprise based on simple exchange of goods with or without monetary exchange did not really allow for enormous growth of individual wealth. This was especially true when governments (usually kings or similar rulers) did not allow the accumulation of individual ownership for the masses. Once individual liberty became acceptable any individual could engage in a private transaction and own property, capitalism spontaneously and slowly emerged or evolved as a response to individual desires to increase their personal wealth. Sometimes this was possible as an individual, but more often, it required a collection of individuals who pooled their resources. In modern terms, the people who pool their resources by sharing ownership are usually bound into a corporation. The resulting capitalist venture is all about acquiring and owning capital by controlling production, distribution, and sales. This results in a controlled exchange of wealth within the corporation and amongst corporations or individuals who own capital. Workers are only employed or paid if the work cannot be done by machines or horses. In essence they are not part of the capitalist system except insofar as they are a resource.
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Have you ever thought about the origins of free-market thinking and how the concept was derived? In today’s world it seems to be assumed as if it were some kind of natural law. In an odd way, it is a perversion of the concept of natural law. Natural law can be thought of as the analogue of the physical law. Physical law is the result of the the nature of space, time, and matter. Natural law is the result of the nature of humans in the world. Recently it has become clear that the idea of a natural law is also known to animals other than humans.

The idea of natural law goes all the way back to at least the Taoists of China and probably before that, but we don’t have the records to know. Aristotle believed that each animal has a mental state that is appropriate to its physical nature. Natural law underpins the Magna Carta, the declaration of right, and the English Enlightenment in England. In the US it is the foundation for the US revolution and the US Bill of Rights.
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