A few months ago, Bryan Caplan and I discussed a chapter of Landsburg's Armchair Economist entitled "Why Prices Are Good: Smith Versus Darwin." Landsburg claims there little connection between free markets and evolution. "The outcomes of biological processes are often inefficient, for the simple reason that there is no reason why they should not be." (p75)
Unlike Landsberg (and Caplan), I see no inherent difference between the two. There's inefficiency in ecology, but it also exists in free-markets. And there's reason for both of them not to be as such: the strongest (most efficient) survive.
Prof. Caplan disagrees and recently he illustrates with this post. In The Tawny, Scrawny Lion a lion runs around all day chasing down animals. He eats a lot, but since he spends all day hunting, he stays thin and weak. This is pure deadweight loss, says Prof. Caplan, no doubt recalling the above quote from Landsburg.
I completely agree; it's deadweight loss. And just like a firm that's swapped in inefficiency, this lion is unlikely to reproduce, let alone survive for much longer.
Landsberg complains that the ecosystem has no prices, thus its inefficiency remains. But there are prices in ecology and just like all good prices, they convey relevant information. This lion is being told that there are too many lions in this ecosystem and if he doesn't find greener pastures, he's going to become a textbook example of creative destruction.