A Few Thoughts on Economics

In order to have a living complex system, which means that grows at an exponential rate, you have to have a few attributes. 1) You have to have a sufficient density of entities in the system; 2) they have to be able to interact freely to create rules that allow for complex interactions; 3) there must be a hierarchy of complex subsystems within the system as a whole that are themselves capable of freely creating their own rules of behavior. All of which means that 4) there must be a reduction of top-down control, meaning a reduction of dominance of one particular subsystem in the system as a whole.

An understanding of how one gets the creation of complex systems with emergent properties of behavior (Adam Smith’s “Invisible Hand”) would go a long way to helping one to understand growth in general, and economic growth in particular.

I’ve noticed in conversations with people that economic thinking is counter-intuitive, but if you can get the person to actually listen to the explanation, they end up with no choice but to agree with you. We seem to have evolved to understand the world in ways that are counter-intuitive to both quantum physics and economics. The former for reasons of dealing with macroscopic reality; the latter for reasons of having evolved in small social groups. Truly economic systems evolved only in the last few thousand years, and we have not had time to evolve to them. Economic systems are complex systems with emergent properties, and we do not always fully understand such systems on an intuitive level. However, people can be educated to understand the nature of complex systems in general, and economic systems in particular — and that is what we really need to work to do. Precisely because, though correct, economic thinking is counter-intuitive.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s