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Is Novelty Always a Good Thing? Towards an Evolutionary Welfare Economics

In: The Two Sides of Innovation

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  • Christian Schubert

    (Max Planck Institute of Economics)

Abstract
Evolutionary economists are increasingly interested in developing policy implications. As a rule, contributions in this field implicitly assume that policy should focus on the encouragement of learning and innovation. We argue that, from an individualistic perspective, this position is not easy to justify. Novelty and evolutionary change have in fact a rather complex normative dimension. In order to cope with this, the evolutionary approach to policy-making needs to be complemented with an account of welfare the background assumptions of which are compatible with an evolutionary world-view. Standard welfare economics is unsuited to the job, since the orthodox way to conceptualize welfare as the satisfaction of given and rational preferences cannot be applied in a world in which preferences tend to be variable and incoherent. We argue that, in order to deal with the specific normative issues brought up in an evolving economy, welfare should be conceptualized in a procedural way: At the individual level, it should be understood as the capacity and motivation to engage in the ongoing learning of instrumentally effective preferences. Evolutionary-naturalistic insights into the way human agents bring about, value, and respond to novelty-induced change turn out to be a valuable input into this extended concept of welfare. Finally, some implications of this concept are explored.

Suggested Citation

  • Christian Schubert, 2013. "Is Novelty Always a Good Thing? Towards an Evolutionary Welfare Economics," Economic Complexity and Evolution, in: Guido Buenstorf & Uwe Cantner & Horst Hanusch & Michael Hutter & Hans-Walter Lorenz & Fritz Rahmeyer (ed.), The Two Sides of Innovation, edition 127, pages 209-242, Springer.
    • Handle: RePEc:spr:eccchp:978-3-319-01496-8_11
    DOI: 10.1007/978-3-319-01496-8_11
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    More about this item

    Keywords

    Novelty; Endogenous change; Preference formation; Welfare; Justice;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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