Thoughts on complexity in economic systems

  • If a social system develops in practice, it should also work in theory. (That theory may be convoluted and never finished, however.) Much like the sorting and randomization algorithms, the efficiency and effectiveness of the system of economic organization will vary.
  • The difference between economic systems lies not only in the rules of the game, but the stocks and flows of each system, and how they are determined. Additionally, how much self organization do the agents have?
  • The flow chart will change depending on the type of system.
  • No system is purely socialist or purely capitalist, but a gradient of each. Communism may fit in somewhere, as well.
  • The system must seek resiliency and self perpetuation
  • This fails at the extremes because in the purest systems there are leakages; not all agents will be able to continue in economic means.
  • In pure socialism, the end will transfer economic activity into the public choice domain as people, no longer lacking of economic wants, will demand positional goods in their place.
  • Pure capitalism creates its own undoing by driving technology to a place at which there is no work available for anyone to do. To put it simply, after the Hansonian singularity, there will be no more economic activity necessary for an agent.

Author: Deric Tilson

I am a classically-trained economist and doctoral student at George Mason. I'm an ecopragmatist and interested in the cross-section where economics, ecology, and ethology meet. I hope to work for non-for-profits specializing in economic development and eventually moving to either the public sector or a think tank. My research interests include the political economy of war, resource economics, the applications of complexity theory, the mitigation of risk by impoverished individuals, and global water scarcity.

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