9 - Economics and evolution: Alfred James Lotka and the economy of nature

Summary

There is a natural affinity between evolutionary ecology and economics, because ecology is concerned with the ways in which limited resources are allocated among different uses and users. Yet the interaction between these two disciplines has been a recent development of the past twenty-five years, in part because ecologists have only slowly, and with much resistance, accepted the validity of mathematical modeling in their science. In the 1970s ecologists, aided by optimization modeling drawn from engineering, began seriously to use economic models and modes of thought, in some cases transferring concepts directly from economics into biology, in other cases rediscovering economic principles in the context of their biological studies.

At the same time, economists began to investigate ecological models and to examine how they might be generalized and applied to economic processes (Goodwin 1987). The ecological models that drew their attention were mathematical analyses of predator–prey interactions, which had been investigated independently by Italian physicist Vito Volterra and U.S. mathematician Alfred James Lotka in the 1920s and 1930s. These models, along with parallel studies of population growth and competition, formed the backbone of theoretical population ecology, which in conjunction with population genetics was emerging in the 1960s as one of the most active and controversial areas of ecology. Population biology investigated the relations between ecological and genetic strategies and evolutionary processes, in particular to discover under what conditions fitness might be maximized. These developments in evolutionary biology have, in turn, been applied to economic theories of the firm, although the validity of the biological analogy has been contested, as discussed by Neil Niman, chapter 14, this volume.