Final thought on Complexity Economics

The Origin of Wealth: Evolution, Complexity and the Radical Remaking of Economics’ (see previous posts – an overview and a discussion of the implications for our models of change). One question that remains is ‘why aren’t there more books like this?’ The initial idea of  ‘Complexity Economics’ dates from an epic debate in 1987, pitting ten leading economists against ten assorted scientists and in Beinhocker’s account, the victor was pretty clear. ‘What really shocked the physical scientists was how to their eyes, economics was a throwback to another era. One of the participants at the meeting later commented that looking at economics reminded him of his recent trip to Cuba, where the streets are full of Packard and DeSoto automobiles from the 1950s. He noted that one had to admire the ingenuity of the Cubans for keeping these cars running for so long on salvaged parts and the odd piece of Soviet Tractor. For the physicists, much of what they saw in economics had a similar ‘vintage’ feeling to it. It looked to them as if economics had been locked in its own intellectual embargo, out of touch with several decades of scientific progress, but meanwhile ingeniously bending, stretching and updating its theories to keep them running.’ The Santa Fe Institute, which organized the debate, is a fascinating experiment in intellectual cross-fertilization. Much of the key work around chaos and complexity theory is linked to the Institute, raising the question, if cross-fertilization is so effective, why is there so little of it going on? With a few exceptions (eg Oxford’s 21st Century School – I’d be interested in hearing about others), the vast bulk of academic activity still takes place in disciplinary siloes, where ideas and progress are more likely to be incremental rather than the kinds of huge intellectual leaps that can come from cross-disciplinary work. Maybe incentives need to change – perhaps faculties should be required to adopt a quota of researchers from outside their discipline, with suitable salaries and career incentives for the researchers themselves? Are some of them doing that already? Back to the day job next week, in particular assessing the development impact of the financial crisis, which seems to fit depressingly well with Albanian dictator Enver Hoxha’s message to his people at New Year in 1967: “This year will be harder than last year. It will, however, be easier than next year.”……..]]>

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4 Responses to “Final thought on Complexity Economics”
  1. Punditus Maximus

    Something that’s been bothering me:
    If most economists contribute so little to the public discussion, then why is it so dang hard to be an academic economist?
    The extreme difficulty associated with being an academic in modern times may have a lot to do with a field’s incapacity to change. There simply isn’t time to seek out and adapt to new ideas in the context of the grinding requirement to publish ever-smaller variations on peers’ small variations. That system eats people and excretes nothing.
    The current financial crisis and our field’s complete failure to either predict or demote those who failed to predict is a prime example of this. Why go to all the effort to come up with new theory or do a good job when Larry Summers is going to be in charge eventually anyway?

  2. Soren Jarnvig

    Thanks for sharing your thoughts on CT, Evolutionary Economics etc. … dating back to your comments on the ODI Paper: Complexity, Chaos, Catastrophes and Change ….
    I’m myself working on a theoretical framework for analysing social- and economic change relevant to the ‘development world’, i.e. Community-driven Development, which takes its outset in complexity theories, or rather: Alexander Bogdanov’s ‘Tektology’, which I would recommend to anyone looking for a way to adopt CT to the social sciences beyond as metaphor, quantum mechanics or yet another go for neo-liberal micro-economics.
    The translated works of Bogdanov, “Essays in Tektology” transl. b. George Gorelik and “Bogdanov’s Tektology” by Peter Dudley are somewhat hard to come across as they’re out of print but Arran Gare’s article, “Aleksandr Bogdanov and Systems Theory”, Democracy and Nature, Vol.6, No.3, pp.341-359 (2000), provides a good introduction.
    Fundamentally, Bogdanov’s world is a world of dynamic changes where agents combine or organise elements (easiest understood with reference to Gidden’s authoritative and allocative resources)- understood as open systems, into complexes where the sum of the whole is different from the sum of the parts, similarly to emergent properties in complexity theories. To study what he calls the universal organisation of elements, Bogdanov developed a number of mechanisms which are initially divided into formulating and regulating ones – much like institutions are both seen to enable and restrain human action. Human capabilities and room for manoeuvre is thereby determined by the agent’s organising experience – capacity and access to combine the elements at hand more successfully than the organisation of the opposing forces.
    In terms of power, Bogdanov indicated that in this world only the differences in energy tensions result in changes and reactions; only these differences have practical meaning. Therefore, activities, resistances to these activities, and their various combinations are the fundamentals to Tektology. The notions of activity and resistance are not independent but are mutually related concepts. The strength of resistance, for example, cannot be determined without reference to the opposing activities.
    Although Bogdanov’s bold, and seemingly absurd, attempt to develop a Science of all sciences is beyond the scope of my dissertation, his (methodological) framework is nevertheless very well suited to grasp the complexities of the organisation and change of society, while appreciating Prigogine’s arrow of time (in ex ante that is – Bogdanov died in 1928). In addition, his whole point in developing a theory which is specifically intended to combine the insights from different sciences equally makes it possible to adopt a number of current theoretical insights from development research and the social sciences more generally – e.g. a foucauldian perception of power (or partly that of James G. March), institutional bricolage, the more useful concepts from social capital, endowments/entitlements, empowerment, and actor-oriented perspectives – while still comprehending the many manifestations of path dependency.
    /Just my five cent
    PS: Anyone amused by the Cuban cars/Economics analogy would probably enjoy Richard Feynman’s ‘Cargo Cult Science’ ( The article is mostly concerned about research in behavioural psychology but I doubt he’d be impressed by economics.

  3. I have done a Research Methods Course in Complexity. I am seeking help in finding a PhD supervisor for my research topic which is exploring the Feasibility of combating poverty traps as a development strategy, using complexity approaches. I would appreciate contacts.