Uncertainty, Evolution, and Economic Theory

This is a journal article, not a book — Alchian’s 1950 paper in the Journal of Political Economy. Its move is to drop the assumption that firms maximize profit knowingly: under genuine uncertainty nobody can compute the maximum, so what looks like optimizing behaviour in aggregate is the result of selection. Firms whose decisions happen to yield positive profits survive and are imitated; the rest exit. Adaptive, imitative and even random behaviour is enough to generate the outcomes the maximization postulate was invoked to explain.

McCord links to a PDF of the paper rather than to an edition.

Why it’s on the list: It opens the Institutions, Property Rights, and the Law sub-section, alongside Coase — the stretch of the curriculum where economic outcomes are explained by the structures agents operate inside rather than by the agents’ own calculations.

Where I saw it: Brendan McCord’s Philosopher-Entrepreneur Reading List, in the section on Institutions, Property Rights, and the Law. Shared on X on March 9, 2026 and saved to Kyle’s “Books To Read” Apple Note. The full 211-entry transcription, with the four parts and sixteen sub-sections, is on The Philosopher-Entrepreneur Reading List.

Connections

• The Philosopher-Entrepreneur Reading List — the curriculum this card came from.
• Economics — the field whose core behavioural postulate the paper reframes.
• Institutions — selection among firms as an institutional rather than individual mechanism.
• Innovation — trial, imitation and survival as the actual engine.