Richard R. Nelson and Sidney G. Winter, An Evolutionary Theory of Economic Change (1982)

I was already familiar with, and persuaded by, the general arguments in this book: orthodox economic theory makes many unrealistic assumptions, about maximizing behavior, perfect knowledge and rationality, highly competitive markets, static equilibria, competition occurring only over price, etc. Nonetheless, I still found this book extremely interesting and well-argued. The authors draw on work in many fields, including Michael Polanyi's ideas about "tacit knowledge" and organizational sociology and, of course, modern evolutionary thought, to offer a much more realistic picture of how individuals and firms behave than does orthodox economics. The book draws extensively on Joseph Schumpeter's ideas and tries to formalize them (I have to admit I couldn't follow the models and math and skipped these sections).The book has been enormously influential, having been cited more than 55,000 times. I wish I knew the lineaments of its influence - which arguments have been challenged, modified or further developed. Several years ago I read and greatly appreciated Robert Frank's more recent Darwin Economics, which made a generally similar argument (though I don't remember Frank's book in enough detail to say what the differences might be). Finally, as I read this book, I was struck by the parallels to Robert Boyd and Peter Richerson's Culture and the Evolutionary Process (1985), which came out just three years later and also proposed, and made a persuasive case for, an evolutionary approach to significant aspects of human history.