Evolution and Economic Complexity

Evolution and Economic Complexity

Edited by J. Stanley Metcalfe and John Foster

Dedicated to the goal of furthering evolutionary economic analysis, this book provides a coherent scientific approach to deal with the real world of continual change in the economic system. Expansive in its scope, this book ranges from abstract discussions of ontology, analysis and theory to more practical discussions on how we can operationalize notions such as ‘capabilities’ from what we understand as ‘knowledge’. Simulation techniques and empirical case studies are also used.

Chapter 5: The Complexity of Structure, Strategy and Decision Making

Peter M. Allen

Subjects: economics and finance, evolutionary economics


Peter M. Allen INTRODUCTION In several previous papers (Allen 1998, 2001a, 2001b), it was shown how the creative interaction of multiple agents is naturally described by co-evolutionary, complex systems models in which the agents, the structure of their interactions and the products and services that they exchange evolve qualitatively. In reality, complex systems thinking offers us a new, integrative paradigm, in which we retain the fact of multiple subjectivities, and of differing perceptions and views, and indeed see this as part of the complexity, and a source of creative interaction and of innovation and change (Foster 2000). The underlying paradox is that knowledge of any particular discipline will necessarily imply ‘a lack of knowledge’ of other aspects. But all the different disciplines and domains of ‘knowledge’ will interact through reality – and so actions based on any particular domain of knowledge, although seemingly rational and consistent, will necessarily be inadequate (Lyotard 1984; Cilliers 1998). Management or policy exploration require an integrated view. These new ideas encompass evolutionary processes in general, and apply to the social, cultural, economic, technological, psychological and philosophical aspects of our realities. Often, we restrict our studies to only the ‘economic’ aspects of a situation, with accompanying numbers, but we should not forget that we may be looking at very ‘lagged’ indicators of other phenomena involving people, emotions, relationships and intuitions – to mention but a few. We may need to be careful in thinking that our views will be useful if they are based on...

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