Complexity is looking at interacting elements and asking how they form patterns and how the patterns unfold. It’s important to point out that the patterns may never be finished. They’re open-ended. In standard science this hit some things that most scientists have a negative reaction to. Science doesn’t like perpetual novelty.
If economics wants to understand the new economy, it not only has to understand increasing returns and the dynamics of instability. It also has to look at cognition itself, something we have never done before in economics.
When you mathematize something you distill its essence.
The invisible hand is not perfect. Indeed, the invisible hand is a little bit arthritic … I’m a believer in free markets, but I think we need to be less naïve. We need to accept that markets give us pretty good solutions, but occasionally they will lock in something inferior.
Economists got away from really questioning how the world works, how decisions actually got made. If something doesn’t conform to neoclassical models … people are not somehow behaving themselves properly.
We’re facing a danger that economics is rigorous deduction based upon faulty assumptions. Science after science gets that way from time to time. When it does, we’re in real trouble.