The Complexity Era in Economics

profession that can only be understood as a system in constant change and flux. Before
we pursue these topics more, let us first try to define what complexity means.

3. Definitions of Complexity

Taking a complexity vision does not require choosing among the many specific
definitions of complexity.² But it is probably useful for us to note the most relevant views
that are being bantered about in economics today. Three such views seem the most
pertinent to us: a general view, a dynamic view, and a computational view. The general
view is the most useful one for thinking of the evolution of economics as a discipline; the
computational view is starting to become influential as a research methodology, and the
dynamic view is relevant for both concerns. But a more general definition of a complex
system is given to us by Herbert Simon:

Roughly by a complex system I mean one made up of a large number of
parts that interact in a nonsimple way. In such systems, the whole is more
than the sum of the parts, not in an ultimate metaphysical sense, but in the
important pragmatic sense that, given the properties of the parts and the
laws of their interaction, it is not a trivial matter to infer the properties of
the whole. In the face of complexity, an in-principle reductionist may be at
the same time a pragmatic holist (1962, p. 267).

Simon then goes on to emphasize how this definition leads to a focus on the hierarchical
structure of systems, with Seth Lloyd identifying Simon’s view as one of his 45
definitions, labeled “hierarchical.” Simon emphasizes that he is drawing on older
literatures, particularly general systems theory (von Bertalanffy, 1962), which he sees as
including the work of economist Kenneth Boulding with cybernetics (Wiener, 1948), and
information theory (Shannon and Weaver, 1948). Of these, cybernetics can be seen as a

² Quite famously, the MIT physicist Seth Lloyd provided (at least) 45 definitions of this concept (Horgan,
1997, p. 303, footnote 11).

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