Evolutionary economics part 3 — The human touch

Human economics is rooted in the evolution of life, but also comprises truly novel deviations and extensions. In case we get carried away, evolution’s first principles can put us right

(Part 1 is here, Part 2 is here)

From its inception, life faced a fundamental challenge: resources were scarce. Early bacteria that were more efficient at allocating these scarce resources were superior at meeting three simultaneous primary objectives: survival, flourishing and reproducing. They were the ones that endured. Later, larger organisms evolved symbiotic win-win relationships (like algae and corals). Plants and fungi formed physical mycorrhizal networks for exchanging nutrients, and insects formed colonies of individuals with specialized roles. Multicellular organisms evolved organs performing decentralized functions, with a centralized resource allocation mechanism. Mammals, birds and fish formed ‘societies’ balancing individual and collective needs.

All the time, evolution persistently favoured those organisms that made best use of the available scarce resources by applying fundamental economics concepts: trade-offs, opportunity costs, mutually beneficial trade, comparative advantage, markets…