Mindscape 161 | W. Brian Arthur on Complexity Economics
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- čas přidán 22. 08. 2021
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Blog post with audio player, show notes, and transcript: www.preposterousuniverse.com/...
Economies in the modern world are incredibly complex systems. But when we sit down to think about them in quantitative ways, it’s natural to keep things simple at first. We look for reliable relations between small numbers of variables, seek equilibrium configurations, and so forth. But those approaches don’t always work in complex systems, and sometimes we have to use methods that are specifically adapted to the challenges of complexity. That’s the perspective of W. Brian Arthur, a pioneer in the field of complexity economics, according to which economies are typically not in equilibrium, not made of homogeneous agents, and are being constantly updated. We talk about the basic ideas of complexity economics, how it differs from more standard approaches, and what it teaches us about the operation of real economies.
W. Brian Arthur received his Ph.D. in operations research from the University of California, Berkeley. He is currently an External Faculty Member at the Santa Fe Institute, IBM Faculty Fellow, and Visiting Researcher in the Intelligent Systems Lab at PARC. He was formerly the Morrison Professor of Economics and Population Studies and Professor of Biology at Stanford. He is known for developing the theory of increasing returns in economics. Among his awards are a Guggenheim Fellowship, the Schumpeter Prize in economics, and the Lagrange Prize for complexity.
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Excellent information. There is a field of study even more complex than economics, namely ecology. our understanding of forest ecosystems is, for example, rudimentary.
Thank you Sean Carroll, I didn't realise I needed this podcast until I read it's title
That was enjoyable, thanks as always Sean.
Despite it's seeming complexity the economy follows distinct and often quite predictable cycles, the most important of which is the 18.6 year average land price cycle which suggests another GFC around 2026/7.
It is not an equilibrium, but a Sisyphean process of boom and bust driven by credit fuelled speculation.
I like thinking of life as Sisyphean in general but one exception with our economy is the upward trajectory of growth over the long term. As long as humans continue to innovate as we have been over our existence, then growth will continue, given the cycles throughout. I’ve heard it referred to as walking up a mountain with a yo-yo.
@@chemquests Yes fair point, but the risk of that analysis is it's partly conflating technological progress with the political economy, the 18 year land price cycle, which has been fairly consistent in the west since capitalism birth for example is not inevitable but a consequence of the way we treat land which is a natural monopoly and inelastic as a commodity.
When there is demand for silicon chips technological innovation driven by competition insures the price stays low, but as the demand for silicon valley itself grows the price just keeps rising because you can't ship cheap land in from Alabama.
With a more steady state economy, technological progress would not be hampered by such extreme cyclicity as the downturn in 2008 and, I still expect, 2026/7.
As a poker player, this is all very familiar and highlights my moral strugglers with the game and with life in general
Please say Meow to Ariel from me.
Thank you so much professor. Your channel is already a gold mine of information.
Sean ….welcome to the podcast,
Brian: Yeah, hi
i just hopped over from one of your open chats and you were talking about atificial gravity, but it got me to thinking about "the seedling stars" by james blish - is anyone doing research into "engineering humans" it's one thing to terraform planets, but might it be easier (and another explanation of the fermi paradox too, in the book one set of explorers is actually microscopic) to engineer humans to fit the environments they are likely to encounter on other planets?
Its "El Farol" not "Alpha Role" in case anyone else can't find it
That's hilarious 🤣
Just as classical physics gave way to quantum physics. Similar changes will happen in economics.
Sir start video recording .... that wiĺl be good for listner,.
With the advent of highly advanced pattern recognition, synthetic intelligence platforms and general artificial intelligence... If humanity begins to lean more and more on AI to solve complex problems, will our mental capacity eventually devolve over time? Similar to the Axiom spacecraft on Wall-E, complete and utter human dystopia? I already find intellectual conversation an impossible endeavor, at least for my demographic. Or will human social interaction give way to conversing with omniscient computation platforms for enlightenment?
Economy is study of how people use limited resources which have alternative uses.
i think its impossible to build stable system unless its fluid, reacting fast and unstable by its nature based on science of different areas, which is important for life and survival. we have casinos, dark markets, over/under production/consumption which leads to over pollution and instability of any system and ecology, thus creating ideologies, culture and manipulations, different levels of corruption - despite any common sense, warnings, health issues, everyone hooked and "wasting time" on its addictions from income and consumption anyway. only option i see as a scifi/cyberpunk fan is AI should save everyone by dictating and controlling rules with constant income of new data))))))
Meh. Economics is everything that people do. We over-generalize, we under-generalize. We spend a lot of energy trying to figure out how much energy we should spend analyzing it. And the same old story keeps happening.
😂
Hi
Messy vitality? He maybe applied a few models or algorithms to very basic economics settings and he already feels like he can give lectures on how society should be organized?
I feel he should expect people expecting more of him. What a concept! I’ll call it complexity crapcutting.
Edit: ok I got triggered because the words “messy vitality” fit quite well the image I have of Haiti, for example. Certainly messy, and vital too, since most of the population is young.
But I hope no one thinks of this as a desirable state of things.
Sigma phi anyone?
Lambda Lambda Lambda
Karl Marx built up a model of complex capitalist economics (Labor Theory of Value), building on the works of Adam Smith and David Ricardo. The problem is complexity economics is blocked from entering into the mainstream and will remain this way. Because it reveals the mechanism of exploitation, and thoroughly refutes the entire ideology of entrepreneurship, which the capitalist rulers understand is unacceptable, as ideology is one of the capitalist rulers' main pillars of support/stability. For introduction to complexity economics I recommend reading Marx's Wage Labor and Capital, and Value, Price and Profit.
This guy is better than Ambien. Zzzzzzzzzzzzzz……
lol