Capitalism in Evolution

Capitalism in Evolution

Global Contentions – East and West

Edited by Geoffrey M. Hodgson, Makoto Itoh and Nobuharu Yokokawa

Contributors to this volume argue that to understand capitalism in evolution, this diversity of systems and approaches must be taken into account and their individual evolutions analysed. This book represents a major understanding of the evolution of capitalism in the twenty first century and brings together a distinguished group of experts with perspectives from America, Europe and Japan.

Chapter 3: Economic theory and the complexity of capitalism

Yoshinori Shiozawa

Subjects: economics and finance, institutional economics


Yoshinori Shiozawa THE RECOGNITION OF COMPLEXITY An economy is a complex system. Although the term ‘complex’ has a number of definitions, we shall assume here that there is some level of agreement on the core ideas involved. However, much less consensus exists as to how this complex system should be analysed. Until the emergence of the so-called ‘sciences of complexity’, the prevailing scientific method was to understand complex matters as a result of simple rules. Scientists would seek to understand the complexity of a given phenomenon in terms of simple basic rules, or find a simple principle unifying and reshaping several diverse elements into a single system. But can complex systems be adequately understood through such reductionist or reconstructive methodologies? This question has been raised ever since the surgical scalpels of science were first applied to complex phenomena. Almost everyone debating the proper methodology for the social sciences stressed their differences from the natural sciences. Geschichtswissenschaft (the science of history) emphasized the ideographic character of their science, while Kulturwissenschaft (the humanities) pointed out the impossibility of reducing cultural factors to universal laws. Hermeneutics suggested the impossibility of formal analysis. Those that worked in these traditions generally claimed that it was impossible to apply a reductionist methodology to these disciplines. It is not new to say that the economy is complex. However, an effective means of approaching and understanding this complexity has not yet been established. In order to focus on the significance of complexity in economic studies,...

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