New theory explains economic growth in terms of evolutionary biology

Date: Thu Dec 05 2002 - 07:31:59 EST

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    Distributed December 2, 2002
    For Immediate Release
    News Service Contact: Scott Turner

    New theory explains economic growth in terms of evolutionary biology

    The struggle for survival that characterized most of human existence
    stimulated a process of natural selection that conferred an evolutionary
    advantage on humans who had a higher genetic predisposition for a careful
    rearing of the next generation. This evolutionary change permitted the
    Industrial Revolution to trigger a change from an epoch of stagnation to an=20
    of sustained economic growth, according to the first theory that integrates=20
    fields of evolutionary biology and economic growth. This research by Brown
    University economist Oded Galor and Omer Moav from the Hebrew University is=20
    lead article in the current Quarterly Journal of Economics.


    =A0 =A0 =A0 PROVIDENCE, R.I. - It took an evolutionary leap in the human spe=
    cies to
    help trigger the change from centuries of economic stagnation to a state of
    sustained economic growth, according to the first theory that integrates
    evolutionary biology and economics.

    =A0 =A0 =A0 "Until now, economic growth theory did not have implications for
    evolutionary biology, and evolutionary biology did not have implications for
    economic growth," said lead theorist Oded Galor, professor of economics at
    Brown University.

    =A0 =A0 =A0 This new theory, the first of its kind ever proposed in the econ=
    literature, appears as the lead article in the current Quarterly Journal of
    Economics. It is co-authored by Omer Moav of the Hebrew University of

    =A0 =A0 =A0 "The struggle for survival that had characterized most of human=20
    stimulated a process of natural selection and generated an evolutionary
    advantage to human traits that were complementary to the growth process,
    triggering the takeoff from an epoch of stagnation to sustained economic
    growth," the authors wrote in their study.

    =A0 =A0 =A0 The evolution of the human brain in the transition to Homo sapie=
    "increased the evolutionarily optimal investment in offspring's quality," sa=
    Galor. "This was due to the complementary relationship between brain capacit=
    and the return to investment in human capital."

    =A0 =A0 =A0 The process gave an evolutionary advantage to people who had hig=
    valuation toward offspring's quality, Galor said. "The subsequently increase=
    prevalence of this genetic trait in the population ultimately permitted the
    Industrial Revolution to trigger a transition to a state of sustained econom=

    =A0 =A0 =A0 The critical natural selection that occurred prior to the Indust=
    Revolution involved the fundamental tradeoff between child-caring and
    child-rearing. The "epoch of stagnation" gave an evolutionary advantage to a
    higher-quality smaller family rather than to lower-quality larger families,
    Galor said.

    =A0 =A0 =A0 "Valuation of quality, through better nourishment and education=20=
    children, fed back into technological progress. And as technology advanced,=20=
    fed back into more education. Human capital took off. This leap in evolution
    came to dominate the population as a whole, and centuries of economic
    stagnation ended."

    =A0 =A0 =A0 The authors attribute acceleration in this evolutionary process=20=
    to the
    emergence of the nuclear family that fostered intergenerational links. Prior=
    the agricultural revolution, 10,000 years ago, people lived among
    hunter-gatherer tribes that tended to share resources more equally.

    =A0 =A0 =A0 "During this hunter-gatherer period, the absence of direct
    intergenerational links between parental resources and investment in their
    offspring delayed the evolutionary advantage of a preference for high-qualit=
    children," said the authors.

    =A0 =A0 =A0 In fact, according to the theory, a switch back to a quantity em=
    began to take place in the 20th century.

    =A0 =A0 =A0 "During the transition from stagnation to growth, once the econo=
    environment improved sufficiently, the evolutionary pressure weakened and th=
    significance of quality for survival declined," said Galor. The inherent
    advantage in reproduction of people who highly value a large number of=20
    gradually dominated and their fertility rates ultimately overtook the=20
    rates of people who value high-quality children, he said.

    =A0 =A0 =A0 "Oded Galor's tendency to ask big, important questions, to be ta=
    ckled in
    ambitious and technically sophisticated models have earned him a well-deserv=
    reputation as one of the most ingenious and interesting growth-theorists of=20
    age," said Joel Mokyr, professor of economics and history, Northwestern
    University. Mokyr is a leading expert on the history of technological progre=
    and the Industrial Revolution.

    =A0 =A0 =A0 "Galor and Moav have opened a new and potentially very fruitful=20=
    vein of
    thinking about the history of economies in the very long run," said Mokyr.
    "This pioneering paper is a breakthrough in its use of population dynamics i=
    long-term historical change and in applying Darwinian logic to the history o=

    =A0 =A0 =A0 The predictions of the proposed theory are consistent with the t=
    ime path
    of population, technology and income since the emergence of Homo sapiens, sa=

    =A0 =A0 =A0 "Once biologists identify the genes that control fertility behav=
    ior, the
    predictions of the theory in the context of the evolution of the human speci=
    could be tested as well, comparing genetic valuation for quality in
    hunter-gatherer tribes to those in societies that have experienced the
    Neolithic revolution," Galor said.

    =A0 =A0 =A0 According to the authors, earlier episodes of technological prog=
    ress did
    not generate a "takeoff" because the necessary human evolutionary change had
    not yet completed its course.

    =A0 =A0 =A0 "The population did respond to higher return to education and in=
    in human capital, but not aggressively enough to generate an acceleration in
    the rate of technological progress and sustained economic growth," said Galo=

    =A0 =A0 =A0 The theory generates an alternative intriguing prediction, he sa=

    =A0 =A0 =A0 "It suggests that during the epoch of stagnation, men who were f=
    rom a
    physiological viewpoint moderately fertile (men with a moderate sperm count)=
    and who were therefore induced by nature to invest more in the quality of=20
    offspring had an evolutionary advantage over highly fertile individuals,"=20
    said. This would suggest that sperm count has declined in the last thousands=
    years, he said.

    =A0 =A0 =A0 The National Science Foundation supported Galor's research.

    News in Brain and Behavioural Sciences - Issue 79 - 30th November, 2002=20

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