Evolution in Human and Social Affairs
Soon after graduating, Marshall plunged into the philosophical controversies of the time (Raffaelli 1994), sharing the “wave of Darwinian enthusiasm” that was pervading Cambridge (Clifford 1886: 24-25).
Though the spur came from many a source, and Marshall later indistinctly referred to Spencer, Hegel, and others, Darwin’s theory best highlights the basic elements of the evolutionary process Marshall had in mind: variation, selection and heredity. In Darwin, selection between individual carriers of casual variation is worked out by survival probability, while genetic heredity preserves those variations that make individuals survive. Similar three-dimensional views of evolution were already applied within and outside of the biological sciences, with different characterization of one or more of the three elements. In Spencer’s Psychology, pleasure-pain selection discriminates between actions that are experienced by the individual, giving rise to a process of learning by doing. The role of heredity is here played by habit and instinct at the individual level and by custom at the social level. With regard to variation, the human world presents an additional causal factor: power to at least partially foresee the consequences of any new action and to plan its execution accordingly. This opens the door to Spencer’s non-casual view of evolution, in which variation is performed purposefully. Directionality is reinforced by the cultural transmission of acquired habits. What further distinguishes Spencer’s from Darwin’s theory, and lays it open to criticism and ridicule, is the possibility that acquired habits are genetically transmitted.In “Ye machine”, a paper delivered in the late 1860s, Marshall drew a sophisticated
model of how a mechanical mind evolves over time. In its routine activity the machine relies on automatic actions stored in previously acquired instincts.
When a novel situation occurs that defies existing automatisms, the machine tries accidental variations until it hits one that succeeds, directly or in a roundabout way. If all these “contrivances” fail, and the stimulus persists, the machine resorts to a higher mental circuit capable of foreseeing the consequences of each action before choosing which one to perform. Successful “contrivances”, wherever they have been first performed, either at the lower or the higher level, not only restore equilibrium, but tend to become part of the machine’s normal behaviour, changing the way it will act in future circumstances. Repetition makes the performance of any new action easier, so that in the end it is stored as a new instinct. Each machine’s “character” consists in its peculiar set of accumulated automatisms, and varies over time. Character introduces a new level of causality, which partakes of biological systems: each action is directed by the machine’s character, which itself is slowly changed by the actions that are performed. If we consider the machine’s ability to foresee and plan the variations, causation is not merely biological. However, selection is always worked out by “purely mechanical agencies” (Raffaelli 1994: 119). The model is not Spencerian in its denigratory meaning. Though it does not rule out genetic transmission of acquired habits, the issue is set aside as not of primary concern, as it will also be in the major works (ibid.; Marshall 1919: 163-4 n, 1920: 248 n). Marshall’s failure to reach the economist’s Mecca is often attributed to his Lamarckian-Spencerian leanings (Hodgson 1993; Moss 1982), but the conclusion is unwarranted. Marshall’s model is made up of the three basic evolutionary elements that consist in innovation, selection and routine. The fact that variation in human affairs can be consciously planned, and is not due to pure chance, does not contradict the neo-Darwinian theory of genetic variation, which is said to have played havoc with Marshall’s forays into economic biology. Intentional directionality instead of pure chance in the emergence of variations, and cultural instead of genetic transmission, characterize the evolution of human ideas and artefacts differently from biological evolution.The model performs two functions in Marshall’s economic analysis. On the one hand, it explains how the mind works, thanks to its specific mechanisms: variation can be either casual or designed, pleasure and pain provide the selective test, and instinct is where successful variations are preserved. On the other hand, with different specifications of the three components, the model reproduces the steps through which any system evolves, be it a firm, an institution, a society. This detailed model of the cumulative growth of human knowledge is applied to economics from the very beginning: “when a man works he produces two effects, one on his work, and another on himself” (Whitaker 1975, II: 55). Variation and innovation are of primary concern in any field, from industrial economics to education: “the tendency to variation is a chief cause of progress” (Marshall 1920: 355). Competition fosters innovation and is the most powerful selective mechanism in the economy. At different levels, habit, custom, and standardization offer a corpus where variations can be preserved and stored: “Custom standardizes unconsciously and crudely processes and products alike. The modern science of industrial technique deliberately standardizes some products and many processes” (Marshall: 1919: 201).
Both functions of the model help understand Marshall’s insistence on the limits of the mathematics he knew when applied to economics. Restoration of the equilibrium, which is exhaustively represented by the mechanical analogy, does not bring an end to the story. It neglects the change that takes place in the mechanism itself and affects the way it will work in the future.