Maintaing Homeostatis rather than Maximizing Profits
The theory of maximizing behavior and the marginal analysis is essentially "Newtonian." It is a mechanical, not an evolutionary model. The evolutionary model sees the organism or organization not as an equilibrium system, although there are important quasi-equilibrium conditions, as in homeostatis in the biological organism and corresponding conditions in the social or economic organization. ... .. the state of the organism or organization never exhibits a true equilibrium but is always subject to constant change. In the case of biological organism, the constant change develops first the fetus, then the baby, the child, the adult and finally leads into aging and death. ... In this incessant "Heraclitian flux," what remains of any kind of equilibrium theory? The answer seems to be that it may be useful to describe states of the organism which are stable enough over time so that change, at least for short periods, can be neglected. We see this, for instance, in the theory of homeostasis in the biological organism, over short periods in which aging can be neglected. (1981, pp. 100-01)
Back to economics loss of the evolutionary perspective (1981)