Category: Talks

W. Brian Arthur (Part 1) on The History of Complexity Economics

From its beginnings as a discipline nearly 150 years ago, economics rested on assumptions that don’t hold up when studied in the present day. The notion that our economic systems are in equilibrium, that they’re made of actors making simple rational and self-interested decisions with perfect knowledge of society— these ideas prove about as useful in the Information Age as Newton’s laws of motion are to quantum physicists. A novel paradigm for economics, borrowing insights from ecology and evolutionary biology, started to emerge at SFI in the late 1980s — one that treats our markets and technologies as systems out of balance, serving metabolic forces, made of agents with imperfect information and acting on fundamental uncertainty. This new complexity economics uses new tools and data sets to shed light on puzzles standard economics couldn’t answer — like why the economy grows, how sudden and cascading crashes happen, why some companies and cities lock in permanent competitive advantages, and how technology evolves. And complexity economics offers insights back to biology, providing a new lens through which to understand the vastly intricate exchanges on which human life depends.
This week’s guest is W. Brian Arthur, External Professor at the Santa Fe Institute, Fellow at the Center for Advanced Study in the Behavioral Sciences at Stanford, and Visiting Researcher at Xerox PARC. In this first part of a two-episode conversation, we discuss the heady early days when complex systems science took on economics, and how biology provided a new paradigm for understanding our financial and technological systems. Tune in next week for part two…


César Hidalgo on Information in Societies, Economies, and the Universe

Maxwell’s Demon is a famous thought experiment in which a mischievous imp uses knowledge of the velocities of gas molecules in a box to decrease the entropy of the gas, which could then be used to do useful work such as pushing a piston. This is a classic example of converting information (what the gas molecules are doing) into work. But of course that kind of phenomenon is much more widespread — it happens any time a company or organization hires someone in order to take advantage of their know-how. César Hidalgo has become an expert in this relationship between information and work, both at the level of physics and how it bubbles up into economies and societies. Looking at the world through the lens of information brings new insights into how we learn things, how economies are structured, and how novel uses of data will transform how we live.


Complexity, a podcast by SFI

Far-reaching conversations with a worldwide network of scientists and mathematicians, philosophers and artists developing new frameworks to explain our universe’s deepest mysteries. Join host Michael Garfield at the Santa Fe Institute each week to learn about your world and the people who have dedicated their lives to exploring its emergent order: their stories, research, and insights…