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WP 05-01

Carsten Herrmann-Pillath. On Power as a Unifying Concept in the Naturalistic Foundation of the Social Sciences

Keywords: utility theory, adaptation, signal selection.

Abstract:

Although power is an ubiquitous phenonomen in human societies, the analytical concept of power remains marginal in economics. In this paper I consider a possible radical reorientation of economics which starts out from the methodological premise that economics, the social sciences in general and biology should be integrated into a coherent ontological framework. The conceptual vehicle for achieving such an integration are “bridging concepts” that allow for related empirical interpretations in different ontological domains, and which serve to formulate hypotheses about cross-domain causalities. I show that the core concept of neoclassical economics, subjective utility, cannot serve as a bridging principle, and I propose to substitute utility for power in terms of its two semantic dimensions, “power to do” and “power over.” Power as a theoretical term to cover the capability of an organism to control its natural and social environment can be easily related to both evolutionary concepts (in particular, adaptation) and economic concepts like social capital and capabilities. An ensuing core argument of the paper is to shift attention away from scarcity as a possible common ground between evolutionary theory and economics, and to turn to communication as a low-cost device of controlling the actions of other actors to ego’s advantage. I relate this to Sober and Wilson’s revised idea of group selection and demonstrate that the combination between group-internal low-cost signalling and group-external high-cost signalling is a crucial abstract principle of the emergence of complex social power structures. Thus, important similarities between recent evolutionary approaches to signalling, in particular the Zahavis’ theory of signal selection, and institutional economics can be uncovered which open fresh sights on the unification of the human sciences.

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