Erik Beinhocker takes us on a tour of economic history to illuminate how the economy is so successful at what it does. How can a system with no central planner, with no central pivot point, nonetheless function as a complex organism, selecting for appropriate social and physical technologies, and moving forward with very real laws, norms and byways? Beinhocker's response is to think of the economy as an evolutionary system, much like biological speciation. All global and local economies (we will side-step the perhaps problematic nature of the referent-point of the term) select, within their context, for schema that are well-suited to their environment. Such schema will reproduce and, consequently, come to reshape the same environment so that selection pressures themselves grow and change. This is accomplished so effectively precisely because there is no central judge, but rather the system itself come to bear on the fitness of any technology. Much like the evolution of species, the economy is an algorithm of differentiation, selection and amplification.
It is important to note that when Beinhocker identifies the economy as an evolutionary system, he is conceptualizing evolution within the framework of complexity thinking. A conceptual movement only a scant thirty-something years old, complexity thinking, in essence, describes any system as an emergent whole which is, by its very nature, more than the sum of its part. While it is still crucial to any economic theory to understand the behavior of individuals, Beinhocker explains that we must not assume the broader system will simply operate as an agglomeration of individuals. As we scale up from the micro to the macro, on display are trends, values and actions that cannot be meaningfully assigned to a discrete actor or location. Rather, the economy itself becomes a living organism, subject to whims and caprices, growth and change. Much as people are more than simply a collection of cells, so too is the economy more than just producers and consumers; it is the passage between the different levels of analysis that makes understanding the nature of the beast so difficult.
Where the work is left wanting is on display in the last section when Beinhocker attempts to apply his new conceptualizations to understanding business and politics. While he posits fundamental questions about the purpose of the economy, and the values on display in the underlying structures therein, his conclusions come off as so much left-center moral-economic platitudes. While he has clearly researched complexity theory deeply, his subsequent application thereof leaves us wondering if this re-imagination of economic functioning has really changed how we think about the growth and evolution of the economy. One cannot help but wonder if a more thorough and critical view of complexity-thought might yield more fundamental insights about the nature, history, and thus the future possibilities of the evolving economic-political stage.
