UNDERSTAND OR CHANGE?

Chris Dillow, an economist whose Blog, ‘Stumbing and Mumbling’  - ‘An extremist, not a fanatic’ , HERE  whom I read whenever he publishes his iconoclastic views - not ‘neoclassical’ nor orthodox, sometimes claimed by him to be ‘marxist’, though if he is it is normally well-hidden, in that he talks a lot sense, not jargon. 

He demonstrates his better sense in today’s offering - follow the above link and enjoy: In ‘PRAISE OF COMPLEXITY ECONOMICS’ by his answering, as below:

“The question is: why is complexity economics not more influential? …

“One reason is that it requires different techniques. It can't be studied merely by problem sets (ugh) devoted to standard optimization techniques. Instead, it requires agent-based simulations (here are a couple of examples), laboratory experiments of the sort done by Charles Noussair among others, or close attention to history and the institutional and cultural settings in which markets operate.

And therein lies a second reason why complexity economics is under-rated. For me, one of its big messages is that context matters. Emergent processes sometimes lead to benign outcomes and sometimes instead to inequality and inefficiency, and which turns out to be the case can hinge on quite small differences. The great economists of the 20th century - such as Keynes, Samuelson or Friedman - tried to offer a general theory. Complexity economics doesn't.

There's a third reason why complexity economics is under-rated. It does not give us a means of foreseeing the future. Of course, conventional economics doesn't do so either. But the difference is that complexity theory tells us that such forecasts might well be impossible - which is not what the customer wants to hear. The best it can do is help us understand what has happened. And for me, this is good enough. As someone once said, "Economists have only changed the world; the point, however, is to understand it.”

Comment

David Simpson, published his account of “The Rediscovery of Classiclal Economics: adaptation, complexity and Growth” (2013), Edward Elgar, Cheltenham, UK, and examines the recent history of complexity thought among economists, in its series on ‘New Thinking in Political Economy’.

As a young man at Oxford, Adam Smith said that the philosopher’s role was to observe everything but to do nothing. whereas the young Marx thought that his role was to change the world, not understand it. The key word here is ‘observe’. Economists in their contributions should ‘look out of their windows’ occasionally.

Dillow does that admirably.