I’m an intern there [the Santa Fe Institute] – which is why I’m particularly interested. I’ll be in college next year, and my degree program is very similar to some of the complexity science stuff.Who has fallen under the spell of the Pied Piper of Path Dependence, Brian Arthur;
If this sort of thing interests you, I’ll direct you to this new paper by W Brian Arthur, a stalwart of the field....Of course, it turns out that Brian Arthur seems to be unaware of what Joseph Schumpeter wrote in the 1940s, in Capitalism, Socialism and Democracy, about equilibrium (i.e. that the economy is never in equilibrium, but is always moving toward it);
...complexity economics accords with political economy. In the “computation” that is the economy, large and small probabilistic events at particular non-repeatable moments determine the attractors fallen into, the temporal structures that form and die away, the technologies that are brought to life, the economic structures and institutions that result from these, the technologies and structures that in turn build upon these; indeed the future shape of the economy—the future path taken. The economy at all levels and at all times is path dependent. History again becomes important. And time reappears.
A natural question is whether this new approach has policy implications. Certainly, complexity teaches us that markets left to themselves possess a tendency to bubbles and crashes, induce a multiplicity of local attractor states, propagate events through financial networks, and generate a sequence of technological solutions and challenges, and this opens a role for policies of regulating excess, nudging towards favored outcomes, and judiciously fostering conditions for innovation.Arthur--and his Stanford pal Paul David, and their acolytes Paul Krugman and Robin Wells--has been challenged to produce some evidence for his theories. Every time he does, they're exposed as either mistaken or fraudulent.
Stakes are driven through the heart of QWERTYcula, but he never dies. He keeps coming back to corrupt the economics profession (and, now, its impressionable youth).