Against the microfoundation hegemony: cooperation in biology, business and economics.

Abstract

We use recent insights from evolutionary biology and the principle of biological relativity to reveal the remarkable parallels between forms of cooperation in biology, business and economics. The principle of biological relativity states that there is no privileged level of causation. The creation of higher levels of organisation and regulation constrains the components of co-operation in a form of downward causation. The upward and downward forms of causation are not equivalent. Downward causation is an organising principle arising from the ordered creation of the 'initial' and 'boundary' conditions experienced by the lower level components. But the existence of the lower level components is also the necessary condition for the creation of the higher-level constraints. Very similar processes are at work in corporations. The restrictions imposed by the legal form of the corporation bind investors to the provision of permanent capital in a similar way to that of fusion of organisms in biological processes, creating a form of symbiogenesis. The higher order conditions imposed on the agents of the firm provide an organising principle and the existence of the lower level agents is a necessary condition for the creation of the higher-level constraints. Furthermore, the process of entry into new business environments resembles that of symbiosis or symbiogenesis in that the interaction is asymmetric; the subsequent process is dynamic, resulting in super-additivity. The dynamic processes can create higher levels of organisation, such as new business models involving cooperation between businesses, corporations, regulators and governments. These in turn constrain the entities forming the new process.