Survival of the Most Foolish of Fools: The Limits of Evolutionary Selection Theory

The paper investigates whether evolutionary selection, in nature or the market, ensures the survival of rational agents. It argues that once rationality appears, evolutionary selection can account for its diffusion—but cannot account for its appearance in the first place. This issue differs from the investigation of whether history matters. The issue of history or path-dependency focuses on whether evolutionary selection can favor the survival of the potentially most productive apparatus (in the biological or technological sense). To show this, the paper commences with the much-neglected difference between efficiency and productivity. Copyright Kluwer Academic Publishers 2000