Is There a Parallelism With Physics?

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In the 18 70s, roughly and 19 hundred economists did study statistical mechanics. They were studying people like boltsman and others who had brought in this point of view. And i wouldn't say they lifted it wholesale, but they thought this was probably a very good approach. What i'm find at the moment is that people sometimes say to me, as, you know, aren't you trying to show horn economics into and you approach, callit complexlyand i say, no, not at all. We're starting to see cosmology, i think, much more that way. Are at a more mete zoological level, they they don't settle down.

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.

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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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