Complexity Economics

Questioning the wisdom of neo-classical economics seems to be notoriously difficult in universities around the world, although many students, I'm sure, have second thoughts about the principles of perfect rationality, equilibrium, and closed systems. The reality of the situation is such, however, that most professors follow the classical paradigm so strictly that debate on the merits of such things as complexity economics has not even been a possibility in many classrooms. In fact, I came to find that most high school and college students I talked to had never heard of complex adaptive systems, evolutionary landscapes, or non-linear mathematics.

Of course, Im not calling for a revolution here. What I want is debate. People need to be educated in non-classical economics in order to have a broader understanding of both economic theory and real life. My main focus is complexity economics in which I have limited experience, but a great deal of interest.

So please, if you are interested in establishing an inter-campus network through which college students can debate, research, and study complexity economics, or if you are interested in this branch of the field, let's make it happen and let's start sharing ideas.

What complexity economics really deals with is dynamic systems and it has its own set of laws. It was founded on the idea that an economy is an open, adaptive, evolutionary system whose behavior is deterministic but complex. This feature arises mostly out of the fact that although such a system would be composed of agents governed by some specific laws, the interactions between those numerous agents make the overall behavior of the system very difficult to predict.

There is a particularly beautiful example of such a system in art! You can see it in the MoMA, it is a project called "The Rules of Six":

http://www.nextnature.net/research/wp-content/uploads/2008/04/rules_of_six.jpg

Obviously this is a very complex pattern. Nonetheless, its design was governed by a few very, very simple algorithms. The computer that created this pattern was programmed with a few basic rules which told it what shape or structure to add to the landscape depending on the conditions surrounding the given area (so the process is certainly deterministic). For example, it may have been told to add a hexagon one inch high whenever it encountered a hexagon one inch deep, and a few other simple rules like that. However, as the landscape grew in size, it also grew in complexity, eventually generating this very intricate system out of a few simple algorithms.

This is essentially complexity economics in the form of an art project and I found it particularly striking live. A very interesting idea.

cellular automata

although such a system would be composed of agents governed by some specific laws, the interactions between those numerous agents make the overall behavior of the system very difficult to predict.