Global Contentions – East and West
Edited by Geoffrey M. Hodgson, Makoto Itoh and Nobuharu Yokokawa
Chapter 3: Economic theory and the complexity of capitalism
3. Economic theory and the complexity of capitalism 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...
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