Home > The Economics Profession > Comments of the week: Wilde, Radford and Davies on complexity theory and building a narrative

Comments of the week: Wilde, Radford and Davies on complexity theory and building a narrative

This is a series of connected comments on Geoff Davies’ essay “The Nature of the Beast”, which considers the question of how do we build a narrative linking the various heterodoxies.


Keith Wilde  — 
August 3, 2010 at 11:33 am

It seems to me that the editor has already provided the key to building a narrative that links the various heterodoxies. That is, the element that unites them is their common disdain for neoclassical orthodoxy. I recently made a requested conference presentation on “appropriate economics” (in which I made abundant use of quotations from this site) which concluded that the function of neoclassical orthodoxy is “propaganda for the ruling class”.

Each brand of heterodoxy has as its favorite whipping boy a particular aspect of reality that is missing from the neoclassical model of perfection. This defect becomes especially acute when orthodoxy is invoked to support an issue of policy. That is, each of the missing elements of reality is linked to an implicit policy orientation and favorite prescriptions. It is a situation captured in verse about the six blind men of Hindustan who encountered an elephant and each described the full beast according to the particular part that he had happened to touch. With the consequence that each was partly in the right but all were in the wrong. 

I fantasize that if, during two decades as a dissident policy analyst in government agencies, I had had a handbook consisting entirely of authoritative refutations of orthodoxy from each of many heterodox disciplines, my life would have been much simpler and more satisfying. When policy proposals were shown to be defective by first one and then another of the heterodox arguments, policy development would be forced to become sane and focused on relevant aspects of reality as they bear on frankly acknowledged value priorities.

Could not the construction of such a handbook provide the desired “narrative”?

 

Peter Radford  —  August 3, 2010 at 4:57 pm |

Exactly Keith.

The key observation to make is that it is entirely within the power of heterodox economists to create such an integration. No one else can.

The question becomes how?

But this is not new. It has been the case for decades. I see several problems:

One, is that heterodox economists are not as well acquainted with each other as they seem to be with the problems of neoclassicism. To extend your metaphor we have many more than six alternative versions in our particular Hindustan.

Second, there seems to be resistance to achieving coherence in heterodoxy. I think this stems from a misunderstanding, and possibly a fear, that each particular heterodox strand might lose its identity within a larger, more comprehensive, ‘meta heterodoxy’. I see it differently: each strand could become a vital part of an organic whole. This should provide vibrancy and an expanded context for development and research. After all if the economy is a giant complex system then economics is likely complex as well.

Third, economics is highly resistant to the importation of new ideas from outside disciplines. We all know this is especially true of neoclassicism, but I suspect it is also true of heterodoxy as well. Geoff’s essay above is a good case in point. One of the most well worn books on my bookshelf is a compendium of essays from the Santa Fe Institute entitled “The Economy As An Evolving Complex System”. It is a mine of new thinking and gives economists insight into the power and use of complex systems analysis. That work was published in 1997. Another example is the work of Georgescu-Roegen on entropy and economics. His work was first published in 1971. We all have plenty of similar examples of well established by still largely ignored useful modes of thinking yet to make a central impact on economics. The opportunity is huge if we can venture outside our own box.

Fourth, following from the above, another form of resistance comes from the reaction many heterodox economists have to ‘scientism’. They appear to conflate science with the elimination of humanity from analysis. That is a legacy of neoclassical analysis, but should not necessarily preclude the importation of analytical techniques from outside to provide our real world efforts with both a rigor and a human face. In my opinion one of the reasons for the failure of economics – as a whole – is the atrophy of its analytical toolkit.

Fifth, heterodoxy is rich with traditions studying the impact of institutions, geography, gender, class, knowledge and so on, all of which were discarded as irrelevant when neoclassicism disappeared down its constrained allocation hole. But those traditions are not stitched together any more than neoclassicism is. Which is why your desired handbook is still missing.

My larger point speaks to your issue of policy impact. We are trying to combat a prevailing worldview that is far too well entrenched in the policy making elites, whether they be in government, business, or academia. Free market dogma is dangerous, hegemonic, and downright false. It needs to be overturned. Not by ‘six blind men’, but by one determined group.

The satisfaction of your desire for an alternative narrative depends on our ability to set aside our differences and become that group.

 

Keith Wilde  —  August 4, 2010 at 1:21 pm |

Peter, my suggestion is much less ambitious than the integration you propose, but I think it would be a useful beginning. And there does seem to be pretty widespread agreement with the editor’s observation that the one common element among the varieties of heterodoxy is their disagreement with policy implications of the neoclassical model.

The handbook I have in mind would not knit them all together into a new whole, but it could, I think, be a step toward uniting the various groups into one that is united against the free market dogma that claims economic theory as a foundation. They don’t have to be integrated beyond that minimal degree in order to be useful in a resistance movement.

Think of it as an encyclopedia rather than a textbook. It would consist of articles that reduce each brand of heterodoxy to the essence of its disagreement with the “adversary”. Not an impossible job, I think. Your mention of Georgescu-Roegen reminds me of my collaboration with others to bring him to Ottawa in the late seventies. He did a pretty good job of presenting the essence (minus the physics) in a couple of lectures.

The product is not a textbook. It is a tool for policy analysts and advisers; no more than a reading list item for teachers. When the government analyst is asked to evaluate a proposal, he can leaf through its contents for the most relevant and authoritative arguments that refute whatever it is in the text on his desk that turns his stomach.

This kind of application does not mean that the analyst/adviser then turns around to endorse the full program of the heterodox variety that was most useful to him in a critical evaluation of the proposal. He may have used more than one of them. His evaluation will (may) mean that the issue is thrown back into the pot for further committee-built policy development, with the prospect that it might emerge in a more benign version, i.e. less anchored to the free market dogma.

Keith

 

Geoff Davies  —  August 4, 2010 at 2:16 am |

Peter Radford makes some useful points, though my perspective may be somewhat different. It does make sense to me that heterodox economists refer more to neoclassicism than to each other, and that they have some resistance to ideas from other heterodoxies or other disciplines.

I would expand point Four – other disciplines can supply not only analytical toolkits and methodologies but different conceptions.

This gets to the core of our topic. The requirement is not just for a collection of heterodoxies, with or without handbook, but for coherence. It has to be, because economies will only be usefully understood through a framework large enough to accommodate everything about economies, rather than just an aspect of economies.

There are many crucial things missing from neoclassicism, like social interaction, the way real people make choices, the way real firms are managed, our inability to foretell the future (!), economies of scale, that the economy is a subset of the biosphere and subject to physical and biological constraints, money (amazingly), marketing, people’s need to belong, and so on. We won’t get a useful replacement by focussing on only one of these aspects. A useful framework has to accommodate them all.

My contention is that complexity does provide such an overarching framework. There is no reason why it can’t accommodate each of the factors I just mentioned. I don’t know how to include them all – that is the program for the future – though there are likely to be some conclusions that emerge fairly quickly. As more aspects of real economies and real people are included, so the character of the beast will come into sharper focus.

On the other hand “complexity economics” will not accommodate other conceptions that aspire to frame the whole subject (neoclassicism, Marxism?). So there will be some incompatibilities among heterodoxies.

You may agree or disagree that complexity provides a general framework, but the need is there for a general framework, not for a collection of heterodoxies. Of course my summary is very brief, and it is not too surprising if the central conception doesn’t immediately take hold of readers (as evidenced by the comments so far). But is there a curiosity to explore this path further … ?

Peter mentions a book from the Santa Fe Institute, and I referred to Beinhocker’s The Origin of Wealth, both of which provide many stimulating analyses and ideas. My own introduction to complexity was through Mitchell Waldrop’s Complexity (Touchstone, NY 1992) which was also based around the Santa Fe Institute. I highly recommend it as a good read with many insights.

Another word on science (scientism?). What excited me when reading about complexity is that it can accommodate living things. It becomes apparent that old reductionist science is brilliantly successful for studying the inanimate world, but hopeless for studying life. Because of the phenomenon of emergence, the reductionist approach of breaking a system into pieces (e.g. asocial agents with static and identical preferences) fails. A holistic view is (also) required if the full behaviour of the system is to be understood.

The notion of complexity has emerged only in the past few decades. You can still do good science with complex systems, but you must be holistic and humble, as we must also be when studying people. So reactions against old-style ‘scientism’ may not be relevant.

  1. Omahkohkiaaiipooyii
    August 9, 2010 at 12:51 am

    This is a paper that I delivered at the 5th Congress of the World Association for Political Economy held in Suzhou, China on the critiques of Neoclassical Economics embodied in the work of Steve Keen:

    http://jimcraven10.wordpress.com/2010/04/21/the-debunking-of-economics-a-review-of-the-work-of-steve-keen-et-al/

    Sadly, some of the stuff called “Heterodox” winds up as just another kind of “orthodox” in a slightly different context. You still find some of the same hypothetico-deductivism, cut-n-paste with little originality, data-source mining, confirmation bias, cognitive dissonance, “safe and respectable”–for one’s career–academic debate, tortured and pretentious syntax, gratuitous-show-off mathurbation, posturing, absolute certitude as if certitiude is “evidence” of argument and worth of being heard, commodification and use of “objects” of research (e.g. disenfranchised people), theory uncoupled from origination or verification and application in praxis, etc in some of the stuff labeled “Heterodox” as anything the establishment Neoclassicals can produce. This is partly because academic careerism, of whatever political flavor, winds up in mostly the same place with respect to CV-notching-quantiy-over-quality and to bypassing with detached “scholarly” isolation from the reality purported to be embodied in the hypotheses, rhetoric and modeling, where do sound theory and policy come from and how are they best tested and developed–in the real world, with real people, in real struggles armed with theroy they can understand and practically use.

    In my opinion from my own experiences, “Heterodox” like “Progressive” can be used and has been used, as a kind of safe harbor that allows one to appear to take a left-of-center position, or even right-of-center position in some cases called “Heterodox”, without any labels (like socialist, Marxist, Marxian, anti-imperialist etc) that are too damaging or dangerous to an academic career. Complexity theory, which features some aspects of the epistemology of dialectical materialism or even classical Indigenous epistemology (non-unidirectional, non-linear dynamics, positive, morphogenetic as well as negative morphostatic feedback effects, no ultimate independent or dependent variables, third-order differentials, etc) can be another safe harbor that appears to offer radical challenges to Neoclassical orthodoxy but winds up with but another hypothetico-deductivist or mechanical aprioriism-based religion or polemic that come down to scenario possibilities and runs.

    The inscription on the grave of Karl Marx at Highgate cemetary in London, from his 11th Thesis on Feurbach is so appropriate: “The Philosophers have only interpreted the world in various ways; the point however, is to change it.” Safe buffet-style “heterodoxy” is not going to understand or change much of anything I believe from what I have seen so far.

    Finally, I wonder why, at radical conferences, workshops are put up against each other in the same time slots? For the establishment conferences I can see it because it celebrates competition, individualism, buffet-style eclecticism, narrow self-research-interest etc. But at conferences purporting to be “radical” and purporting to offer “holistic” and “dialectical” paradigms that the Neoclassical stuff can never offer or imitate, why do they not limit the number of workshops and arrrange and structure them not only so that all workshops can be attended by all interested persons without trade-offs and narrow competition, but also structured so as to present in practice, the asserted “holistic” and “dialectical” aspects of the theory-praxis paradigms at the core of the overall “radicalism” of the conference.

    • August 9, 2010 at 5:05 am

      “Complexity theory … can be another safe harbor that appears to offer radical challenges to Neoclassical orthodoxy but winds up with but another hypothetico-deductivist or mechanical aprioriism-based religion or polemic that come down to scenario possibilities and runs.”

      An intemperate and blanket condemnation such as this does nothing for the cause of bringing people together, nor for the cause of advancing a science of economics. Perhaps Omahkohkia/Jim Craven (?) has some particular examples in mind, but this parody has nothing to do with my own approach, which is to use empirical observations to test quantitative or qualitative models.

      • August 23, 2010 at 2:00 pm

        one can look at the issue of ‘bringing people together’ in different ways. from the outside, as the previous comment implied, this too often means bringing some selct few (‘elites’) together, eg at some fancy conference (often bankrolled by the ‘working class’, not to mention the hotel staff).

        its funny you have a PhD in geosciences, and only got into complexity with Waldrop in 92. I think (to me) this illustrates the sort of disciplinary blindedness which is seen in (esopecially) standard econ—-the blind leading the blind. (‘what crisis?)

        complexity was popularized by Prtigogine in the 60’s and 70’s, for example. Of course as I know personally, in many PhD departments you might have never heard of him (unless maybe you read scientific amertican). and if so, he often would be dismisssed. There are sort of parallell worlds—some places, the santa fe insittute is respectable, while in others its as popular, as say, a madrassa.

        anyway, i rthink complexity theory nowadays is too often almost an orthodoxy, which means interesting ideas get ignored.

        one can’t bring them together, just as one can’t afford for everyone to fly to a conference or write a redundant book.

        i guess this blog is an alternative to exclusive conferences, and the entries are group projects. unfortunately, there really is no ‘metric’ for accountabiklity, so its more of a ‘gift economy’ where some people may lose absolutely nothing while others lose everything if they join.

    • August 23, 2010 at 2:05 pm

      i looked at your web site. blackfoot?
      i see you are a scholar activist, which i see as a good thing. however, you do note you also have built a cv, flew to china to read your book review of s keen, etc.

      watch those glass houses.

      it would be nice to see some more assessment of ‘who should be doing what’ (eg the economics problem of task allocation for optimal control, or liberty).

      for example, what should be on a CV if not a DSGET model or a theory for portfolio pricing? wyho should get opaid for doing what? how should electricity to run blogs be used if not to support unhealpful comments, or redundant discussions ?

  2. David
    August 10, 2010 at 5:42 pm

    Great discussion. It seems to me that expecting some conglomerated anti-neoclassical heterodoxy to emerge is wishful thinking. Moreover, thinking along these lines is still to imagine that economics proceeds as a science; one is presuming that, if we could only synthesize these heterodox strands, perhaps with some empirical validity, we could overthrow our neoclassical overlords. But it should be pretty clear by now that this battle does not really occur over the content of the ideas at hand. Neoclassicists have some shields (Robbins, Friedman), but really their main strenth is simply neoclassicism’s sheer size. As good readers of complexity theory, perhaps its not surprising that a dominant orthodoxy should emerge; neoclassicism as Microsoft, basically.

    In any case, from my perspective the most significant way in which heterodox economists have failed is in their failure to make much of a dent on syllabuses. This is important as the battle of economic theory and its influence is one of numbers, and its hard to see where a new generation could come from. I’m a masters student at Erasmus Institute for Philosophy and Economics, considering my next move and its such a struggle as there is next to nowhere to go. I would love to be able to study Post-Keynesian and Complexity stuff properly somewhere, but its barely possible.

    This leads me to my question for you guys: where on earth is it possible to study any heterodoxies? I’m from the UK originally and would prefer to stay in the UK again. About the only options I can see where there is an actual department committed to an alternative agenda rather than merely a lone wolf are Kansas City, New School and Amherst. Is that really the lot? Any advice for budding anti-neoclassicists? Right now, I’m nearly ready to jack the whole enterprise in; I’m not sure that spending my life railing against people who aren’t listening and getting marginalised to a business school, and being paid bugger all in the process sounds like a particularly great prospect.

    • Peter Radford
      August 11, 2010 at 6:40 pm

      I love the image of neoclassical economics as an example of lock in. Like the QWERTY keyboard it is dysfunctional and wrongheaded but we live with it. Why? Because it is a monolith. It is what we grew up with.

      I am not sure that we should replace one monolith with another. But I would continue to argue we need some form of coherence within economics to enable it to exist as a separate, self contained discipline. That does not imply ‘conglomeration’, but it does imply similarity, and an acceptance of diverse contributions towards a common goal.

      You also surface an issue with heterodoxy: it is really hard to find a fully developed scholastic experience. The choices are minimal and even then they tend not to offer opportunities to explore variations in techniques and approach – I do not know [and would love to be corrected if I am wrong] that any Post-Keynesian courses exist alongside complexity or socio-economics classes etc within the same curriculum as a ‘total economics education’.

      Nonetheless this issue of curriculum control, or choice, is central to the survival and relevance of economics. All of us must contribute to finding a solution, else the subject will fade as people like you get discouraged and leave the field.

      I see these two themes: coherence and curriculum as inextricably linked. The lack of coherence within heterodoxy helps explain why it occupies so little curriculum space. It is too easily dismissed as a series of bits and pieces to be looked at as after thoughts or curious dead ends, rather than an alternative to the neoclassical monolith.

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