Hayek's The Sensory Order contains a physicalistic identity theory of the mind. Popper criticized it, saying that it could not explain the higher functions of language. Hayek took up that challenge in a manuscript but failed to refute Popper's arguments. Drawing upon the same manuscript, Hayek developed a theory of behavioural rules and cultural evolution. Despite his criticism of the theory of mind on which this evolutionary theory was based, Popper adopted Hayek's idea of group selection. He transformed it into a theory of the selective power of ecological niches. This became a central element of Popper's theory of evolution. The chapter traces the influence Popper and Hayek had on each other in the fields of the philosophy of mind and evolutionary theory. This is documented, inter alia, by their correspondence. Popper's theory of evolution, which is based on his dualistic theory of mind, is presented in its various stages of development The chapter concludes with a possible application of that evolutionary theory, some thoughts about David Hume as the source of the differences between Popper and Hayek, and on the possible impact Popper's criticism had on Hayek's role in artificial intelligence.