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Austin Harris
PPE499
Working Draft, April 5, 2016
Veblen’s New Paradigm:
A case for the shared conceptual lineage of Institutional Economics
and Post-Darwinian Scientific Epistemology.
“Can very much depend upon a definition of ‘science’? Can a definition tell a man whether he is
a scientist or not? If so, why do not natural scientists or artists worry about the definition of the
term? Inevitably one suspects that the issue is more fundamental. Probably questions like the
following are really being asked: Why does my field fail to move ahead in the way that, say,
physics does? What changes in technique or method or ideology would enable it to do so? These
are not, however, questions that could respond to an agreement on definition. Furthermore, if
precedent from the natural sciences serves, they will cease to be a source of concern not when a
definition is found, but when the groups that now doubt their own status achieve consensus
about their past and present accomplishments. It may, for example, be significant that
economists argue less about whether their field is a science than do practitioners of some other
fields of social science. Is that because economists know what science is? Or is it rather
economics about which they agree?” Thomas Kuhn, The Structure of Scientific Revolutions.1
Kuhn’s line of questioning may have led his contemporaries in the social sciences to
powerful conclusions regarding their true purpose as investigators into the world of human
phenomenon. Beyond this passage, his book almost certainly fueled a generation of
postmodern thinkers to shade the development of science at large. But to any single student of
1
pp. 159-160. All references included in this paper are to the Fourth Edition of Kuhn’s text, University of Chicago
Press, 2012, hereafter, SSR.
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economics, the only reaction to this passage is a nod of confusion, followed by wistful imagining
of any two economists agreeing on anything, not least of all the dubiously scientific character of
their field. Curiously, just as we might look 50 years back to Kuhn’s day and wonder how the
questions of whether economics is a science, and if so what kind of science, ever came
unresolved, he might have looked 50 years prior and wondered exactly how they ever came to
be resolved in the first place.
Little of the amenability Kuhn saw in the economic field could be afforded to American
economist Thorstein Veblen, who acerbically detailed economics’ failure to become a modern
science. To Veblen, modernity was defined in relation to status as an evolutionary science,
drawing on the model of change and selection inspired by Darwinian structures of process in
biology and ecology.2 Veblen’s critique of the orthodox economics of his day, very applicable in
ours, revolved around the notion that economics could not be called truly scientific unless it
further parted ways with the mode of thinking that had defined its earlier incarnations. By
Veblen’s accord, only through adherence to principles of Darwinian methodology and
recognition of the role of a complex system of sociocultural institutions in shaping economic
behavior, the field could become an Evolutionary Science.3 With that theoretical framework in
mind, it should be obvious that the Veblenian corpus and much of the work it engages with is,
in fact, the sustained argumentation between economists on what science is, and whether or
not their field meets that standard. In this way, Veblen’s work should be seen as evidence to
2
3
Veblen. 1898. Why is Economics Not an Evolutionary Science?
Veblen. 1898. Why is Econ...?
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the contrary of the opening quotation. Presumably, the latter physicist and philosopher never
read the earlier economist. What makes this particularly striking, however, is the nature of said
argumentation. The definition of science that Veblen actually constructed for the economic
field to aspire toward is in many ways akin to Kuhn’s own definition of science, and the
paradigm perspectivist theory of scientific epistemology that follows. In this way, the
Institutional Economics of Veblen, though nominally Darwinian, is actually highly congruent
with Kuhn’s own revolutionary model of the scientific process. This paper will argue Veblen’s
theory of the scientific process, and the theory of institutional economics derived therefrom,
actually represents a substantial break with both Darwin and the precursors to Evolutionary
Economics, and can be properly understood as Paradigmatic Revolutionary Economics.
SECTION 1-1: Summary of Darwinian Evolutionary Theory; The Biological-Ecological
Model and the Scientific Epistemological Model
First, it should be made clear exactly what these models are, how they are alike, and
how they differ. What we might call, properly, the Darwinian-Evolutionary Theory of Scientific
Epistemology is that structure of knowledge inferred from Darwin’s Origin of Species, wherein
species come to exist by means of natural selection, those that exist are the progeny of those
that have succeeded in a constant struggle for perfect adaptedness to their worlds. Although
the end result—commonly known by the maxim of Herbert Spencer, “Survival of the Fittest”—
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is wonderfully concise, a full understanding of the model as it applies to scientific epistemology
requires explicating its key components.
Firstly, the principle of natural selection, of organisms, in Darwinian Biological Theory,
states that in an environment with limited resources and a reproductive population, individuals
will necessarily compete to exist.4 As long as there exists variation among individuals, favorable
traits will be preserved and unfavorable traits removed. To the degree that those traits are
reproducible across generations, increasingly specialized traits will prevail. This notion of
selection is fundamental to the Evolutionary Epistemology employed by later scientists and
philosophers. For Darwin, at specific junctures, enough specialization occurs in a genera of
individuals that they can be called a species. This idea, called, speciation, is likewise central to
the Darwinian philosophy of science. Because of how effectively the natural selection process
produces discrete species over a sufficient time period, there will always exist a great degree of
competition to exist and reproduce. This competition causes the environment, in the long term,
to become systematized at an effectively stable equilibrium point, where competing genera
have more-or-less the same degree of success over extended periods of time.5
This tendency toward a complex system, composed of multiple components each
undergoing simultaneous processes individually and in relation to each other, serves as a very
compelling analogy to the Evolutionary Theory of Scientific Epistemology. As John Dewey,
contemporary to Veblen, put it, “This formal activity [the generation of species, striving for
4
5
Darwin was highly influenced by the economic philosophy of Thomas Malthus.
Darwin was also highly influenced by the economic philosophy of Adam Smith.
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perfect adaptedness] which operates throughout a series of changes and holds them to a single
course; which subordinates their aimless flux to its own perfect manifestation; which, leaping
the boundaries of space and time, keeps individuals distant in space and remote in time to a
uniform type of structure and function: this principle seems to give insight into the very nature
of reality itself. To it Aristotle gave the names, eidos. This term the scholastics translated as
species.”6 In this way, we can see that the model we call “Darwinian” is clearly built of
components from long before the Beagle ever raised her sails, but because of the immense
contributions of his biological research to this theory of epistemology, Darwin’s name seems
most fitting. Henceforth, for the purposes of this paper, Darwinian Theory, unless specifically
described as biological, can be understood as interchangeable with “Early Evolutionary Theory.”
Importantly, it should be noted here that many recent interpretations of Darwin do not use the
biological analogy in as strong a sense as Dewey seems to be advocating—“This principle
seemed to give insight into the very nature of reality itself.”—but all do to some extent.
Further variance exists in the interpretations of Darwinian Theory with regards to the
necessity of its mechanism. To be sure, the theory is, in some measure, contingent and
circumstantial; it does not hold the development of a species through natural selection to be a
strictly ontogenetic or teleological process.7 That is the say, Darwinian Theory posits that
natural selection may always occur given limited resources and a reproductive population,8 and
that evolutionary change will occur in accord with the given circumstances of that environment.
6
CITATION FROM THE NORTON BOOK
See Paksi, pp. 38
8
Darwin was highly influenced by the economic philosophy of Thomas Malthus.
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Darwin’s thought is ambiguous here. There is clearly no ontogenetically- or teleologicallyconceived ideal within or without the preexistence of a generation of individuals. Yet, it is
impossible to state exactly how contingent and circumstantial the stages of selection,
speciation, and systematization are in Darwin’s model. Various interpretations of Darwinian
Theory accept and reject these nuances to differing degrees, ultimately creating a complicated
spectrum of evolutionary thought. Later in the paper, we will see that the relative positions that
Veblen and Kuhn hold with regards to this dichotomy can be used to distinguish their positions
from later schools of Darwinism.
SECTION 1-2: The Social and Economic Interpretations of Evolutionary Theory; Original
Institutional Economics
For social scientists of Darwin’s day, there was suddenly a potent new way to
understand the phenomenon of economic patterns emerging from the incredibly complex
world of human behavior. In particular, Darwinians-in-name-only such as Spencer employed the
principles of natural selection to make the advent of human society a function of biological
variance and selection. Social life merely came to exist the way it did because it propagated
furtherance of those who lived it, and inhibited the growth of those who did not. As should be
well known, this form of Social Darwinism, though apparently an oversimplification and
misnomer to any modern interpreter, was a rather powerful and popular idea among many
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philosophers of science.9 A much more coherent theory of the social application of evolutionary
ideas comes from the work of C. Lloyd Morgan. Morgan was the first to explicate the idea of the
social realm functioning not strictly as product of the biological world, but as a genuinely
emergent level of existence for the beings—humans and their ideas—that occupied it.10 This
conception paved the way for economic interpretations of evolutionary theory.
Earlier economic theories, those of Smith and Malthus—both of whom had a profound
impact on Darwin, and who, as we will explore later, are highly congruent with Darwinian
thought but not Post-Darwinian11 12-- could be rightfully described as theories of a complex
system in much the same was as later evolutionary thought. This is noteworthy, considering
that Smith never had the benefit of Darwin’s biological and ecological analogy. Accordingly,
these classical economists struggled, and ultimately failed, to explain substantive change in the
development of national economies. Their economic systems were adaptive, but only toward a
strictly stable equilibrium. Now, Darwinian Theory showed how a system could maintain that
equilibrium, but gradually tend toward increased complexity in such a way that it allowed for—
or even caused—a qualitative change in the parts and whole of that system.
Veblen adopted this into working model of economic functions. The species in Veblen’s
model are akin to the eidos of Aristotle. They are ideas; forms. Forms formed from a series of
changes being held to a single course-- patterns of individual instances, in the same manner as
9
Citation for Ruse and/or Hull here
Hodgeson, pp 188
11
Hull, pp. 37
12
Paksi, pp. 32
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patterns of biological individuals could come to make up a species. The patterns that Veblen
addressed could be of behavior, such as labor, ownership, or trade. They could also be of
substantial ideas, like currency, production, or consumption. They could even be of
insubstantial ideas, those strictly psychological experiences like pleasure, pain, or predilection.
These patterns of ideas and behaviors are called institutions in Veblen’s system. Institutional
Economics then is the economic system—or the study of human choices and consequences—as
a function of those institutions. Institutional economics maintains the usage of the evolutionary
analogy by detailing the key principles of the sustained and variational growth of these
institutions, in many ways comparable to that of organisms and ecosystems.13
And because that model was so congruent to the models of Darwin’s biology, or other
natural sciences, which were seen as the most “advanced” in that era, Veblen argued that such
a model was necessary for economics to become justifiably “scientific.” In many ways, this
might show us how the ideological conflict between economists has come full circle, despite its
supposed resolution at the writing of Kuhn’s Structure.
Section 1-3: Kuhn, Later Evolutionary Thought, The Transition to Revolutionary Science
But by the time Kuhn composed the model of ideological evolution in that text, the
economic field might have changed, but, perhaps unsurprisingly, Darwinian evolutionary theory
13
Hodgeson, pp. 183
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still held great import in the sciences. The biological model still functioned prominently in the
philosophy of process in science as an expository device. In fact, to have Kuhn himself tell it,
“the analogy of scientific progress to the evolution of biological structures is a “very nearly
perfect fit.”14 And much of the work on the motion and functions of science in Kuhn’s work can
be seen as a coherent extension to Darwin’s own. However, as regards that quotation, a critical
reading exposes the fact that Kuhn differs from Darwin in many key ways, and the “very nearlyperfect fit” is actually applied in that instance only with regards to the antiteleological nature of
both Kuhn and Darwin. While many of the central tenets of Kuhn’s theory are mutually
exclusive with Darwin’s, in at least one way the two can be seen as closely related.
Kuhn’s thought is also strongly related to earlier Twentieth Century philosophers of
epistemology, especially those of the neopositivistic school of thought such as Popper, who
maintained that human knowledge evolved through stages by means of a developmental,
progressive process. In this way, both Kuhn and the Neopositivistic School can be seen as
relations of Darwinian thought.15 Unsurprisingly, when later writers in any of these traditions
describe the extant literature, they use the same analogy of the evolutionary tree, with each
branch maintaining some conceptual similarity to the formative trunk from which it stems,
despite the significant differences which demarcate increasingly distant developments.16 Kuhn’s
theory, however, truly distinguishes itself from all competing views of the philosophy of science
14
Kuhn. SSR pp. 171
Paksi, Kuhn’s Darwinism, pp. 33, 40-41
16
Especially Hull, 1988. Science as a Process. pp. 17 and Paksi pp. 35-38
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at the point of Kuhn’s introduction of two key terms in his Structure of Scientific Revolutions;
paradigm and exemplar.
Briefly, for Kuhn, paradigm is very encompassing term. Foremost, it is the collection of
basic common assumptions which found the shared worldview of any group.17 Where that
group constitutes a field of scientists doing scientific work, paradigm refers generally to the
shared understanding by those scientists of what is or is not science.18 Yet more specifically, we
get to the most common understanding of paradigm, which is of a paradigm as “disciplinary
matrix.” That is to say, the paradigm of any field is the body of existing preconceptions
regarding the factual nature of that field at that time.19 For Kuhn, a paradigm in this sense must
be present for science to go about its basic intended purpose, solving puzzles presented by the
infinite web of interrelated data that make up human experience. This is the crux of Kuhn’s
theoretical framework. We can point to the success of many fields of natural science, and
strongly correlate them to the shared basic assumptions of those scientists, who, not caught
arguing over philosophical questions of what science is could argue over pragmatic questions of
what the data inferred by their shared science actually meant.20
Exemplars, then, are the major interpretations of data that serve as paradigms in the
narrowest sense. They are accomplishments that take place in a field, which have such
17
Kuhn SSR. pp. 4-7
Ibid.
19
Bird, Alexander, "Thomas Kuhn", The Stanford Encyclopedia of Philosophy (Fall 2013 Edition), Edward N. Zalta
(ed.), sec. 3, The Concept of a Paradigm. ADD THIS CITATION TO REFWORKS
20
Ibid.
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powerful and decisive conclusions that their rectitude becomes widely accepted, and serves as
a basis for contemporary and future scientists to solve puzzles in light of.21 The classic example
for Kuhn is Newton’s Principia. By presenting an interpretation of phenomena—objects moving
toward earth—Newton created a form of observable data—Gravity. This observation
substantiated a theory of work to be done patterned on the same interpretation. As that body
grows, and increasingly more coherent observations are made, the exemplar, or paradigm in
the narrowest sense, becomes an increasingly greater paradigm under which scientists operate.
Conceptually, here is where Kuhn’s theory becomes revolutionary in the sense that it
deals with the notion of revolutions. When a paradigm comes to accept a certain interpretation
of relevant data, that data becomes an exemplar and sustains the paradigm. However, there
are inevitably some interpretations of relevant data which cannot be made to fit with the
existing disciplinary matrix, and thus weaken the paradigm. These, Kuhn calls anomalies and it
is the existence of anomalies which enable the well-known phenomenon of paradigm shift.
Only when an existing paradigm fails to incorporate some body of observation within itself
might a heterodox set of assumptions come along to better understand that data. When that
happens, we say that the paradigm has shifted. Beyond that, however, there may come a point
where the anomalous data is too great, and no existing paradigm seems capable of dealing with
it. This is what Kuhn dubs a crisis point, the point where any number of competing scientists
might abandon the functions of normal science to focus on establishing a new set of basic
21
Kuhn. SSR pp. 10-13, 26-30
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assumptions. This process, of which Kuhn can identify numerous historical examples, is a socalled scientific revolution.
Kuhn’s work can be said to have revolutionized the field of scientific epistemology.
Many later theorists will draw heavily on the notion of scientific revolution expressed by Kuhn
to articulate related theories. In particular, Punctuated Equilibrium, as applied in Gould’s
Structure of Evolutionary Theory is legitimated by Kuhn’s theory of a general stasis punctuated
by revolutionary periods. Gould’s punctuation theory, properly understood, is a refutation of
the gradual tendency of Darwinian Biological Evolution to tend toward progress. Both Kuhn and
Gould recognize this pattern with regards to Scientific Epistemology, and found their histories
of science on the notion of revolutionary events. [REDACTED FOR BEING TOO COMPLEX. THERE
IS GOING TO BE SOME INCREDIBLY DENSE PHILOSOPHY HERE BUT NOT NOW. I CANNOT
HANDLE IT RIGHT NOW]
SECTION 2-1: PARADIGM PERSPECTIVISM IN KUHN AND VEBLEN
As a trained physicist, Kuhn refuses to dispute the existence of objective scientific
criteria, though he minimizes their importance by holding the paradigmatic exemplar to be
necessary for their interpretation. It is only with the greatest reluctance that Kuhn makes the
relativistic claim that scientific achievements of disparate paradigms are in fact
incommensurable to one another, and even then, he does so with an amount of irony and
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humor that only further alienates his work from the philosophical orthodoxy of his era. “The
transition [from one paradigm to another] affects a Gestalt switch… What were ducks before
the [scientific] revolution are rabbits afterward.”22 This lingering, and highly controversial,
thesis represents the single biggest departure in Kuhn’s Structure from the orthodox
evolutionary theory of Darwin and others. Paradigmatic incommensurability, often called
perspectivism, drastically changes the notion of progress in the development of scientific
reasoning. Because progress between incommensurable paradigms is not even necessarily
directional, it is incoherent to the evolutionary tree model which Kuhn employs elsewhere in
his conception; however, it is notable anticipations in the works of earlier epistemologists,
namely James, Peirce, Commons, Morgan, and Veblen—none of whom Kuhn seems to have
read loololol.
All are in some ways an extension of Darwinian evolutionary theory. Most notably,
however, is Veblen’s system of economic behavior, which we will here relate to Kuhn’s
Structure. The Institutional approach as applied in Veblen’s Theory of the Leisure Class can
actually be called paradigmatic—not only in the sense that it serves as an exemplary
achievement within its own field, but more importantly, in that it incorporates the concept of
central ideas lending standards of perception and behavior to the fields they exist in.
One clear example of the Veblen’s intersection with paradigm theory comes from the
relevant conception of history. Compare Veblen, at his most epistemological: “For the earlier
22
Kuhn. SSR pp. 112
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natural scientists, as for the classical economists… cause and effect is not definitive. Their sense
of truth and substantiality is not satisfied with a formulation of mechanical sequence. The
ultimate term in their systematization of knowledge is ‘natural law’.” 23 to Kuhn: “No natural
history can be interpreted in the absence of at least some implicit body of intertwined
theoretical and methodological belief that permits selection, evaluation, and criticism…
supplied, perhaps by a current metaphysic, by another science, or by personal and historical
accident.”24 Both of these views hold that singular principles are integral to the functions of any
conceptual framework, and that these principles need not actually be an objective universal,
but must be accepted as such. These principles are the basis of their respective theories, and
clearly put the model allegedly developed by Kuhn in line with that previously employed by
Veblen. When Veblen is advocating the implementation of evolutionary natural law in his
system of economics, he is advocating a paradigm shift in a very Kuhnian sense.
Perhaps unsurprisingly, as a result of this paradigmatic approach, Veblen actually
reaches the very same incommensurability thesis that Kuhn does: “The terms of thought in
which the investigators of some two or three generations back definitively formulated their
knowledge of facts, in their analyses, were different in kind from the terms in which the modern
evolutionist is content to formulate his results.”25 (emphasis added). In the same way Kuhnian
23
Veblen. Why is Econ. not Evolutionary? pp. 378
Kuhn. SSR pp. 17
25
Veblen. Why is Econ not Evolutionary? Pp. 377
24
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paradigms can affect perceptual incommensurability between different eras, Veblenian “terms
of thought” render the thoughts of disparate eras fundamentally different in kind.
SECTION 2-2: DUAL INHERITANCE IN VEBLEN AND KUHN; RE: MORGAN, GOULD, ETC
Veblen’s model becomes congruent with Kuhn’s even moreso in how both Kuhn and
Veblen see the agents in a system as shaping the system as much as they are shaped by it. In
Kuhn’s Structures, he makes it clear that a dominant scientific paradigm not only shapes the
interpretation of the world picture, as we saw above, but can seriously and materially affect the
social world itself. The conceptual understanding that agents hold of the world determines how
they go about shaping that world. In Kuhnian and post-Kuhnian dynamics of science, some
change will occur regardless, but the nature of that change will be fundamentally shaped by the
extant mode or modes of perception.
[PARAGRAPH or two ON GOULD AND HULL ADAPTING THIS INTO THE TRUE-BLUE DUAL
INHERITANCE THEORY. IT IS AN OVERT REJECTION OF ‘DARWINIAN’ EVOLUTIONARY
PRINCIPLES, YET IS IN LINE WITH VEBLEN’S MODEL; CITE THE HECK OUT OF IT]
Veblen, likewise, sees institutions as being stored in the social world. Following Morgan,
Veblen held that patterns of behavior existed not only in the minds of humans, but in their
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“written record, in social traditions, and in the manifold inventions” of their society.26 Both of
these theories see the social world as an entity, that itself interacts with humans in complex
ways.
[PARAGRAPH WITH THE QUOTES FROM DARWIN, MAYR, ETC CONTRASTING THESE VIEWS]
SECTION 2-3: GOAL DIRECTEDNESS, THE NATURE AND FUNCTION OF SCIENTIFIC
METHODOLOGY AS A TELEOLOGICAL/ANTITELEOLOGICAL PRINCIPLE IN VEBLEN AND KUHN;
CONTRA DARWIN, GOULD, ETC.
Darwin- “Evolution not goal directed” but really, it is. Kuhn- Not goal directed at all; even if you
use the silly conception of goal-directedness that I thought Darwin was using (That’s why
darwin is quoted as saying it isn’t). Veblen is OVERTLY goal driven, but in relativistic fashion.
Conceptually, not in line with Darwin at all, more in line with Marx or Hegel honestly lol, but
that’s ok. This is a pretty complicated argument and I am still working out some details. What is
important is that Veblen also incorporates the progressive nature of scientific methodology, an
idea that is very congruent to Kuhn. That part is pretty clear I’m just too lazy right now to make
the necessary transitional sentences for it to fit in here. I have lots of quotes and citations for it.
26
Hodgeson, pp 177
17
SECTION 2-4: SECTION ON WHY OTHER ECONOMISTS, NAMELY SMITH AND MALTHUS, ARE
VERY DARWINIAN (OR RATHER DARWIN IS SMITHY AND MALTHUSIAN); IF VEBLEN IS
REBUTTING THEM THEN HE IS REBUTTING DARWIN, NOT USING HIM. BASICALLY THE
ARGUMENT HERE IS THAT VEBLEN MIGHT BE EVOLUTIONARY, BUT ONLY THROUGH HIS
SPECIFIC UNDERSTANDING OF DARWIN; MORE SOPHISTICATED INTERPRETATIONS OF
DARWIN’S ACTUAL THOUGHT CAN BE USED TO SUPPORT VERY DIFFERENT ECONOMIC
SYSTEMS, SCIENTIFIC METHODOLOGIES NOTWITHSTANDING. IT MAKES MORE SENSE TO CALL
VEBLEN REVOLUTIONARY, BECAUSE HIS SYSTEM AND ITS SCIENTIFIC METHODOLOGY ARE IN
LINE WITH KUHN MORE THAN DARWIN
SECTION 3-1: CONSIDERATIONS AS TO WHY I COULD BE WRONG; DISCUSSION ON WHY I AM ONLY
RIGHT IN A LIMITED SENSE
It must be noted, here, that more recent readings of Darwin do not go as far in their
application of the organismal metaphor as Dewey seems to be advocating. Kuhn in particular
makes very strong usage of the metaphor in Structure, but is very clear about the limitations of
that usage.
Not only are there important distinctions to draw with Darwin, but Veblen’s thinking
here actually represents a break with much of the body evolutionary theory since Darwin, and
even since Kuhn. [HULL; COMMENSURABILITY; TOKEN INHERITANCE]
[BIG PARAGRAPH ON HULL’S IDEA OF CONCEPTUAL LINEAGES, GOULD’S]
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SECTION 3-2: CONCLUSION.
I haven’t written any of this yet.
19
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