Robin Stafford says:
April 1 2021 at 11:19 am
Can I recommend this talk on complexity economics by J Doyne Farmer of the Santa Fe Institute
When PSR mentions the ‘chaos’ of the rugby field you might be even closer than you realise. The mathematics used by macro economic modellers is fundamentally unable to deal with the complex, chaotic systems of human behaviour that lie behind economic ‘systems’. Meteorologists and ecologists have understood this for decades as have a very few economists, notably Steve Keen. Also Eric Beinhocker, a regular at Santa Fe, whose book Origins of Wealth should be on the reading list of anyone interested in non mainstream economics.
By accident I did a project on chaotic systems using the maths of chaos and non linearity, 50 years ago… has always struck me that most phenomena of interest and pretty much all human behaviour are non-linear in nature and hence chaotic. However most people find the idea of non linearity counter intuitive – especially accountants! COVID has shown how most people struggle even with exponential behaviour.
Richard Murphy says:
April 1 2021 at 11:47 am
Agree with all that
Steve is a rare exception, which is why he has been kept outside the fold
Yes, economies are very complex, even chaotic systems. Which makes them very hard, impossible even, to plan.
At which point all the people who insist that they should be the ones to plan the economy agree. You know, all the people who entirely misunderstood Hayek and the Pretence of Knowledge, which is that economies are very complex, chaotic even, and thus very hard if not impossible to plan?
Leaving us with the only calculating engine we’ve got, the economy itself?