Complexity and the History of Economic Thought (Perspectives on the History of Economic Thought)
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A new approach to science has recently developed. It is called the complexity approach. A number of researchers, such as Brian Arthur and Buz Brock, have used this approach to consider issues in economics. This volume considers the complexity approach to economics from a history of thought and methodological perspectives. It finds that the ideas underlying complexity have been around for a long time, and that this new work in complexity has many precursors in the history of economic thought.
This book consists of twelve studies on the issue of complexity and the history of economic thought. The studies relate complexity to the ideas of specific economists such as Adam Smith, Karl Marx, Alfred Marshall and Ragnar Frisch, as well as to specific schools of thought such as the Austrian and Institutionalist schools.
The result of looking a the history of economic thought from a complexity perspective not only gives us additional insight into the complexity vision, it also gives insight into the history of economic thought. When that history is viewed from a complexity perspective, the rankings of past economists change. Smith and Hayek move up in the rankings while Ricardo moves down.
approach is an emphasis on computer simulation. One of the unifying aspects of the Sante Fe approach to complexity is an attempt to model the dynamic properties of as many complex adaptive systems as possible. Physical, chemical, biological, and economic systems were to be modeled with state-of-the-art computational techniques. The modeling focused on systems with simple rules, with minimal decentralized information on the part of individual entities in the system, and on systems with an ability
system made the theory simpler than it otherwise would have been and directed economic researchers away from taking seriously the complexity of the economy. John Stuart Mill Mill is generally presented as the mature Classical economist who had little to add to formal Classical thought. He made a few contributions: He pulled Classical economics towards a humanist mode; he led Classical economics away from the wages fund theory; and he drew a distinction between the social laws of distribution and
insights; he recognized the limitations that Walras did not. He rejected any simple specification of general equilibrium and in Note 21 in Principles argued that the true foundation of aggregate economics was to be found in thermodynamics, an idea that clearly places him in the complexity perspective. Friedrich von Hayek Hayek usually receives only a short mention in the standard history of thought, in part because he lived until the 1980s and his work was continually evolving and, in part,
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(Luhmann 1988:64–65) An interesting feature of modern, monetized economies is that they actually involve two scarcities: the “natural” scarcities of goods and services and the internally produced scarcity of money. Once an economy is monetized, the latter scarcity can be used to regulate the former, so that the scarcities of goods and services also become internally produced. To conclude this section, I will make an observation (admittedly one with which Luhmann himself probably would not agree)