The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics

by Eric D. Beinhocker

Over 6.4 billion people participate in a $36.5 trillion global economy, designed and overseen by no one. How did this marvel of self-organized complexity evolve? How is wealth created within this system? And how can wealth be increased for the benefit of individuals, businesses, and society? In The Origin of Wealth, Eric D. Beinhocker argues that modern science provides a radical perspective on these age-old questions, with far-reaching implications. According to Beinhocker, wealth creation is the product of a simple but profoundly powerful evolutionary formula: differentiate, select, and amplify. In this view, the economy is a "complex adaptive system" in which physical technologies, social technologies, and business designs continuously interact to create novel products, new ideas, and increasing wealth. Taking readers on an entertaining journey through economic history, from the Stone Age to modern economy, Beinhocker explores how "complexity economics" provides provocative insights on issues ranging from creating adaptive organizations to the evolutionary workings of stock markets to new perspectives on government policies. A landmark book that shatters conventional economic theory, The Origin of Wealth will rewire our thinking about how we came to be here—and where we are going.

Genres: Economics, History, Nonfiction, Business, Finance, Politics, Science

527 pages, Hardcover

First published January 1, 2006

Reviews

[Kristin · Rating 5 out of 5]

About 5 years after finishing college, I started to feel that there was a major, glaring deficiency in my liberal arts education. As a young, naive, and somewhat annoying undergraduate, I had a deep and mostly indefensible aversion to the idea of taking an economics class. It's all a bunch of B.S., I thought--and whatever isn't B.S. would certainly offend my pale pink sensibilities at the time. I managed to get by without having to take one. However, as I got to be a little older, I starting to develop a curiosity (or at least an insecurity about my cluelessness) about markets: where do they come from? How do they work? What holds them together? And, what is it that all these finance people and investment bankers keep rattling on about that mostly goes right through me? Economics was shrouded in a veil of mystery, but I wasn't sure how to begin to address my lack of understanding.

And, so, when I stumbled upon this book, I figured it would be a perfect introduction. It turned out to be exactly that, and then some. Much to my surprise and delight, it actually affirmed some of the suspicions I formed in my youth about the discipline. Beinhocker spends the first half of the book raking traditional economic theory through the coals. In their desperation to be taken seriously as "real" scientists, economists of the 19th century began borrowing heavily from emerging theories in physics and applying them to the dynamics of the economy. Not only that, they believed they could explain the entire workings of the economy with equations in the same way that, say, Maxwell did with electromagnetism. As Beinhocker shows, this was to disastrous effect, forcing these "scientists" to push aside anything that didn't fit with their equilibrium equations as a black-box, exogenous force. And, as Beinhocker goes on to demonstrate, it is precisely these "exogenous forces" that not only make economics interesting, but also are the very engine of the economy itself. Indeed, they are responsible for the incredible growth in wealth experienced throughout the world's economies starting in about 1750.

And so, the second half of the book is an introduction to the emerging field of "complexity economics," which views the economy not as a closed system seeking equilibrium but as a complex, ever-changing, adaptive system. In other words, it is an evolutionary system in the same way that life on earth is. And so, much of the language and theory for describing it comes out of evolutionary theory. Now, Beinhocker is at great pains to prove that he isn't falling into the same trap-of-analogy as the traditional economists by borrowing from the sciences. He repeatedly points out that the traditional economic view is that economic equilibrium is like mechanical equilibrium. In contrast, complexity economists say that the economy is not like an evolutionary system but rather is one. As we've no choice but to use language and mental models to describe and understand these systems, this distinction might leave some of us (myself included) a little wary.

Fortunately, much of what complexity economics--which is still in its infancy--offers is very compelling and convincing. At times, it seems a little over-enamored with computer science (particularly the section on "if-then" rules, which had my eyes rolling) as a method of modelling and explaining complex systems. But, once it moves beyond that, it has a fascinating story to tell about how organizations survive (or don't), why so many industries experience boom and bust, and--most interestingly--how our economy grew from one with just a few "products" to one with tens of billions.

The last few chapters are my favorites, when Beinhocker discusses the political and policy implications of complexity theory. The best bit is about how complexity economics takes us beyond the stale, old boring left-vs.-right debates and offers a new way of looking at the economy and the best ways to nurture it.

Overall, I found this to be a terrific, extremely thorough, and very satisfying book.

[S.P. · Rating 5 out of 5]

When I was studying engineering at University one of the subjects we had to have an overview of was economics. I wanted the read this book because to me at the time the traditional macro economics theory just didn’t make sense – too many assumptions that were self evidently wrong, and I wanted a more up to date perspective. This book, I was pleased to discover, not only explained traditional economic theories in detail but also agreed that there are basic flaws in this traditional macro economic view. More interestingly, for me anyway, the book discusses much about complex adaptive systems in economics by comparing them to those in biological and social systems. The treatment of complex adaptive systems I found to be both fascinating and enlightening, probably more than the economics they were being used to illuminate. Certainly I could recommend this book for no other reason than the discussion of ‘Sugarscape’ which illustrated economics, evolution and complex adaptive systems in one very simple thought experiment and model.

[Katia N · Rating 4 out of 5]

This is entertaining, intellectually stimulating and well researched book about complexity economics. If you are interested in the alternative views on economic theory, you would find it worth paying attention to. It is written in 2007, but still stands alone as a popular introduction into this field. I am surprised it has not been updated and there is nothing more recent on the topic.

The book is more than 500 pages, but I never felt bored. There is a part where Mr Beinhocker is trying to formulate his own theory of economic growth borrowing from the theory of evolution and applying it to the economy. These chapters and his theory, respectively, I found not very convincing and relatively sketchy. And he admits himself that he might be wrong in certain conjestures. However, the effort to produce any theory within the complexity framework was worthwhile nevertheless.

The rest of the book is a delight. He gathers the relevant knowledge from the scientists working in the complexity field and convincingly presents it. He also explains why the traditional neoclassical theory does not quite work.

Below is what he is considering in the book:

- the economy is complex adaptive system (Complex - contains many agents interacting with each other and demonstrates the phenomena of emergence; adaptive - the agents adapt their behaviour in response to certain feedbacks; There is no long-lasting equilibrium within these systems. The system is also dynamic (evolving with time).

- the economic laws should be consistent with the biological theory of evolution and physics (thermodynamics, specifically 2nd law); He describes in the book what does it all mean.

- if one models the economy using this paradigm, the results would be much closer to the empirical data but would totally debunk many findings of the traditional economic theory.

- the field is relatively new, so there is no complete theory developed so far, but a lot of interesting patterns are emerging.

The implications of this are massive of course. He demonstrates it with lots of example and the related models. I will just mention the two of them here, the ones I found quite striking:

Sugarscape model:

The model has been developed in 1996 by J Epstein and R Axtell. It is a computer simulation of economic interactions between the agents trying to obtain and eat sugar (the only resource available which is spread unevenly within limited landscape). In the simplest model the agents could do only 3 things: look for sugar; move; eat sugar. To do that, they receive randomly a “genetic endowment” for vision and metabolism (the slow the better). So, the one with better vision and slower metabolism would be genetically better off, but the geography where are they would matter as well. For starters, they ran this game with 250 agents. And even at this simplest model they found a striking thing:

“At the beginning the sugarscape was fairy egalitarian society with bell-shaped distribution of wealth and with only a few agents were rich and a few were poor, the rest was solid middle class.” And the gap between the richest and the poorest was relatively small. As time passes, however, this distribution has changed dramatically. “Average wealth rose, but the distribution of wealth became very skewed, with emerging super-rich, a long tale of upper class yuppie agents, shrinking middle class, and then a bog, growing underclass of poor agents.”

Does it remind you something? Indeed, what the Bible said “For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath! “ And the reason for this is “emerging macro behaviour out of micro behaviour of each agents” - geography, genes, and sheer luck in combination! Beinocker describes the outcomes and the assumptions in a very clear and detailed way. He also shows more complicated models with the possibility of exchange, agents’ reproduction, etc. However, even the basic model is very revealing.

Any policy-maker should be familiar with this if she is serious addressing the inequality issues.

Stock market

According to Beinocker, the stock market is the only place where the economic theories are tested almost in real time and where there is a massive amount of empirical data. The book has been written before the latest financial crisis. However, when I read this book, I was amazed that all the knowledge describing the inherent instability of the stock market were already there! It seems, just no-one wanted to open their eyes and look. And i am not even talking about the financial system as whole. Just pure stock market.

The traditional wisdom (well, actually an academic theory by a few Noble price winners) is called “Perfect Market Hypotheses” (PMH):

- all information you might know about the company is already in its share price;
- therefore, it is impossible to learn from the shares’ past performance. The prices follow totally random walk;
- the market will reach its equilibrium;
- the price reflects the fair value of the company

All of it leads to the following conclusions:
-that the bubbles are impossible (only might be coursed by exogenous factors, not inherent in the system);
- no big money can be made at stock exchange - ha!
-the management should care about its share price and maximise the value of the company calculated as per financial results (i am simplifying here, but this is the jest);

This is the PMH to you. And it was evident in 2008 already that this theory is total rubbish (excuse my French)! Beinocker shows how and why it is the case through the models of David Farmer, the physicist, turned into a stock broker and then finance theorist.

Surprisingly in 2008, against the evidence he himself presents, Beinocker still seemed to agree with Paul Samuelson that “It is not easy to get rich in Las Vegas, at Churchill Downs, or at the local Merrill Lynch office.”. He argues that no single broker would have sufficient liquid funds easily available. But i think, it was more a self-delusion, than the conclusions from his own research. We all know by now know that the broker could easily borrow…

The theory of maximising shareholder’s value (i.e. financial result = share price) has created a culture of short-term view with management focusing on the quarterly financial results instead of more strategic long-term vision of the company’s goals. It is evident now that the share price does not reflect the company value and respectively, the management does not have a direct control over it.

These are just two examples how complexity approach and the related modelling is changing the traditional economic paradigm.

In the last part of the book, Beinocker considers possible policy implications of the complexity economics. Specifically thinks about inequality, development and the role of the government in the economy. He hopes that the theory would put an end to the traditional left and right divide on the economic issues. I would like to hope together with him… However, it seems we are moving backwards not forwards in terms of the divergence between the theory and practice…

All of this might sound very dry to you, but the book is not dry. He is fantastic and patient storyteller. He takes time explaining the concepts and models. I have to make a warning though, if you are easily irritated by the management consulting verbiage, you might find bits of this book quite annoying. But it is not intolerable and not everywhere (the majority is focused in Chapter 14 which might be easily skipped).

Definitely, complexity economics is the one of the most promising ways of looking at the economy. Complexity and convergence seem to be the trends developing in the natural sciences for quite sometime. I am glad it is starting to reach the social sciences as well.

[Taylor Pearson · Rating 5 out of 5]

Traditional neoclassical economics tends to use tools which require it to look at the economy as a static, equilibrium seeking thing - something akin to a factory or machine. Complexity economics, of which this book is the best explanation, instead tends to view the economy more like a biological system.

It argues that "wealth creation is the product of a simple, but profoundly powerful, three-step formula—differentiate, select, and amplify—the formula of evolution" and "the same process that led to an explosion of species diversity in the Cambrian period led to an explosion in SKU diversity during the Industrial Revolution."

Evolution is an algorithm for innovation searching the "fitness landscape" of the economy. The environment creates a design space and then natural selection tests all the configurations in that design space over time and evolves with it.

As an example, clothes designers then looked at their various sketches and selected a subset of the designs that they thought consumers would like, and made a limited number of samples. The designers then showed those samples to the management of a clothing company, which selected a subset of the designs that it thought consumers would like, and arranged for their manufacture.

Three forces co-evolve to create economic progress: physical technologies, social technologies, and business models.

During the Industrial Revolution, for example, Richard Arkwright’s invention of the spinning frame (a Physical Technology) in the eighteenth century made it economical to organize cloth-making in large factories (a Social Technology), which in turn helped spur numerous innovations in the application of water power, steam, and electricity to manufacturing (back to Physical Technologies)

Business models evolve to adapt to the changing fitness landscape created by the interplay of physical and social technologies. The spinning frame kicked off the possibility of large manufacturing businesses that could use economies of scale.

I would basically define entrepreneurship as a skill for looking at how physical technologies and social technologies are shifting and trying to construct a business model that is optimized to the future fitness landscape.

Business models in turn go to shape social and physical technologies.

One of the best examples of this is the way in which the development of the internal combustion engine and affordable cars ultimately led to what we today consider the American Middle Class.
Famously, Henry Ford offered a $5/day wage to any of his employees so they too could afford a car.

This is remembered a generous and benevolent act, but it turned out that there were some footnotes:

1. The wage was available to married men, and to men under 22 and any women if they were supporting dependents.
2.Workers were strongly advised not to buy consumer products on installment plans, other than horses and cars.
3. Workers' families would be interviewed to ask about their saving and drinking habits.

Henry Ford didn’t just want to pay people well, he wanted to mold the culture in a way that fit the emergence of the automobile industry.

An important part of middle-class existence is showing up at work, getting paid a steady salary, and paying bills on time - precisely what you needed someone to do to be able to buy a car.

Traditional economics has historically been concerned with two great questions: how wealth is created and how wealth is allocated.

The models most economists use are focused on the second question. They begin with the assumptions that an economy already exists, producers have resources, and consumers own various commodities. The models view the problem as how to allocate the existing finite wealth of the economy in a way that provides the maximum benefit for everyone.

For this focus on allocation of finite resources, the mathematical equations of equilibrium imported from physics were extremely useful, however they were not so useful for the question of the economy grows and so that question has been largely understudied by economists (though there are notable exceptions such as Joseph Schumpeter).

As Poincaré put it, “[traditional economics] regards men as infinitely selfish and infinitely farsighted. The first hypothesis may perhaps be admitted in a first approximation, the second may call for some reservations.”

What is needed is a more realistic and dynamic model and this is what complexity economics tries to supply. A terrific read.

[Don · Rating 3 out of 5]

Beinhocker tells us that there is a revolution in the making in the world of economics. The orthodoxies of the equilibrium models have long since ceased to tell the truth about the way markets work. Not only are they not able to render a proper account of the reasons why they periodically fail, but also what is positive about them in the sense of what they do well.

The book tells a good story of what economics attempts to be as a science and the tools it has developed to fulfil its mission. Right from its earliest days, in the searches made by Walras, Pareto and the other luminaries it aimed at a model of predictability which matched that of the physical sciences. Mathematics lured the pioneers down the path of equations which suggested that equilibrium was the outcome of all the encounters which brought buyers and sellers together in the marketplace. Success in outlining the shape of business cycles lured the nascent science in towards an orthodox account of the way systems work which made the new profession very useful to rising economic elites.

But Beinhocker sets out the compelling argument that it was a mansion built on sand. Neither buyers nor sellers work the way they are supposed to in the traditional accounts of markets, and the inconvenient facts of time and imperfect knowledge were permanently present to send apparently ordered systems skittering off into crises and depressions for reasons which were unfathomable to the cognoscenti.

For Beinhocker, the problem for the pioneers of economics was that they chose the wrong physical science as the model to guide their endeavours. Physics, which in Newtonian terms, tended to emphasis the conservation of energy within systems that transformed it through the phases of matter and energy, was yet to properly work through all the implications of entropy, which saw a rise in the amount of disorder over time. It is not equilibrium which represents the endpoint of the mechanical processes of the universe, but formless chaos.

Yet still we exist. And not just that, we go out and do things which certainly give the impression that we are producing higher levels of order all the time. Beinhocker says that there is a science which, whilst being rooted in the depressing fact of entropy, offers and understanding of the way in which local systems or order do arise all the time. It is the science of evolutionary theory.
So, the revolution promised in this book is fundamentally about a change of perspective. Instead of expecting the existence of order to be confirmed by number crunching equations, we have to learn to think of it as something dragged out of chaotic conditions and always capable of slipping back there. Evolutionary theory provides the best way to think about the way in which economies are constructed over time by agents who start off with very simple needs and simple ways of meeting them, to become in time the sort of people who need shopping malls, eBay and international spot markets to get through the day.

Like a lot of evolutionary enthusiasts, Beinhocker often seems to strain to find the mechanisms in the realm of actual economics which does the work of genes and DNA in biological evolution. He comes up with candidates in the form of the firm and business plans to perform this role. The most unconvincing part of his argument is the one which strives to show how bog standard accounts of business success, like Jack Welch of General Electric, do the business of running the Red Queen Races which are supposed to be the perfect analogy for evolution.

The reason why this doesn’t entirely work for me is due to the fact that the idea the firm is not constituted in the way that biological evolution requires its agents to be, as a discreet entity marked off from its environment by a membrane which controls the interactions with things like food, air and germs, and which is capable, through the additional agency of a cooperating mate, or reproduction. It is rather a product of law, culture and practices each of which is capable of independent adaptation to environmental prompts which are only tangentially related to the interests of the firm.

The examples of the stakeholder and shareholder models of the firm illustrate this point. In the former, the firm survives because it serves the interests of a wide group of people – workers, customers, economic planners, government ministries, local communities as well as shareholders – whilst the latter is only concerned with shareholders. Beinhocker says the difference is illusory, and in fact all different types of firm really have shareholders at heart.

This is just wrong, but it services the author in making the case that that the revolution in thinking he wants to promote will leave markets more-or-less intact and in their present form. Shareholder firms have DNA (business plans) which allow them to adapt better to the turbulence of unrestrained free markets when stakeholder firms would be lumbered with the messy business of brokering agreements and deals which look after the concerns of all the parties. A particular type of economic growth, of the bubble kinds which have emerged since the 1980s, would be curbed if shareholders conceded more to stakeholders, but writing from the standpoint of Europe, November 2011, which would seem to be a good thing.

But like many of these books which seek to apply evolutionary theory to the social world, the errors of epistemology are not complete barriers to insight and inspiration. There’s stuff here that is well worth thinking about, particularly for those who’d like to see an even more radical revolution than the one Beinhocker was thinking about.

[Otto Lehto · Rating 5 out of 5]

Beinhocker's monumental book is an undeniable achievement. It popularizes cutting-edge economic ideas in an exceptionally gripping, awe-inspiring, and palatable way. It thereby reaches the apex of the very best books in popular economics. Whether you primarily want to learn about business, economics, sociology, politics, or evolutionary theory, this book has it all covered.

As opposed to many other books in the category, Beinhocker treats his reader with level-headed respect. Without dumbing down the science too much, he manages to convey complex and technical ideas in an intuitive way. The book explores the insights of complexity and evolutionary economics and how they apply to economics, business, and politics. The book weaves a coherent narrative that explains how the complex order of the global economy emerges from the primordial soup of complex adaptation. The central message is that complex adaptive systems are hard to predict and control, and they are subject to certain tendencies and patterns that cause unique challenges for managers, civil leaders, and politicians. And the same challenges touch the ordinary citizens in their everyday economic and social decision-making. This means that many of the "scientific" models of economics, sociology, and politics need to be periodically updated to be more attuned to, and responsive to, the evolutionary challenges of complex adaptation.

Through the book's pages, all aspects of human life are affected, from business strategies to government policies, from consumer patterns to social norms. The book covers all those aspects; some of them better than others, but all in a relevant way. In so doing, the book challenges many of the assumptions of both the left and the right; and the models of both economics and sociology. It is not afraid to enter into the "nature/nurture" debate, and some of the book's best insights deal with the way in which hardwired biological imperatives are affected by social construction through schooling, parenting, social networks, cultural norms, and ethical revolutions. In particular, the book forces political economy to refocus on "Social Technologies" like ethical norms as part of the arsenal of social engineering required to empower societies to survive and strive. It thereby allows economics to be reintegrated into the interdisciplinary heart of the broader humanities.

The only negatives I have are three small points. First, two small gripes: 1) It is a little bit on the long side. It would be tough to finish on a trans-Atlantic flight. 2) It focuses too much on business management strategies at the expense of the other important aspects of the economy.

Jumping off from the second gripe, we reach the biggest problem I had with the book: 3) In focusing on business strategies, Beinhocker is committed to a paradoxical position that is hard to reconcile with his broader thesis. On the one hand, Beinhocker rightly emphasizes how it is important for some companies to fail (i.e. that guaranteed business success is impossible) in order for the economy to be able to perform its fitness function. This is the Schumpeter / Nelson & Winter thesis of creative destruction: in order for new businesses to be born, old businesses must die out, since old businesses are often wedded to outdated strategies. On the other hand, Beinhocker emphasizes the power of companies to change their strategies so that they can survive and thrive in the complex environment. This would enable them to outwit creative destruction from within. It doesn't seem credible that companies can exert that much control and prediction over their future. The complex adaptive system perspective forestalls any such aspirations, as Hayek and Schumpeter knew.

That said, the book is mostly a resounding success. It touches on all the important aspects of the complex adaptive system paradigm, and it manages to fuse the insights of hundreds of high quality research papers into an extraordinarily compelling and beautifully written package. This makes the book, despite its length and business focus, an easy recommendation for the educated general reader.

[Jonas · Rating 3 out of 5]

Part I starts out with a nice overview of the development of "traditional economics" since Adam Smith. The characterization of the work of Walras as a "false turn", importing physics metaphors into economics, is particularly striking. The physics framework was maintained until well after WWII with the neoclassical synthesis, while 20th century physics had already moved away from its deterministic 19th century predecessor. Chapter 3 talks about the work at the Santa Fe Institute (SFI), where complexity economics was born, according to Beinhocker. However, Beinhocker exaggerates in my view the extent to which traditional and complexity economics are irreconcilable, and the extent to which the "complexity" work of scholars outside the SFI was ignored by "traditional economics". Just think of Stiglitz or Kahnemann, who received nobel prizes for their critiques of perfect information / full rationality. Still, Beinhocker makes a convincing case that economics must move on.

Part II describes the elements of "complexity economics" and contrasts the traditional and complexity perspectives on dynamics, networks, agents, emergence and evolution. This part cites some interesting research from other disciplines.

After that the book deteriorates in my opinion. Parts III and IV contain some unsubstantiated und superficial claims on the role of evolution in wealth creation (to be fair, Beinhocker acknowledges that he is speculating here). For example, the discussion of the industrial revolution is a mere two pages long. Beinhocker connects the neolithic and the industrial revolutions with the biological concept of "punctuated equilibrium". This simplistic metaphor avoids a more informed discussion of these events. Beinhocker also focusses mainly on evolution, and little on the other elements given in part II. The following chapters on management advice seem out of place and too wordy.

I award the first half of the book 4 stars, but the second only 2.

[Lee Robinson · Rating 5 out of 5]

As an economist who has grown very disillusioned with mainstream economics (or was never illusioned to begin with), I am so happy this book exists.

It is a brilliant outline of how the newly emerging field of complexity economics can help to reform economics from its reliance on static, equilibrium concepts that have hampered the discipline and held it back for over a century. And although this book is subversive, it is not one of the run of the mill straw man range of books having a pop at economics and offering only utopian ideals as an alternative. It is a technical critique and proposes an alternative that is drawn from evolutionary theory which is a fascinating, complex, realistic take on how individual activity leads to emergent patterns in the economy which drive growth and wealth creation.

It is very pragmatic and not not anti-establishment or socially radical. In fact, the author is a senior McKinsey fellow and the proposed model champions business. And this is one of the drawbacks - in some parts the text veers into a business managerial 'how to' guide. Another drawback is that the arguments on culture do not convincingly show the direction of causality and sometimes brush aside a wealth of research in this area.

But for me, these are not serious enough drawbacks to lose this book a star because the parts discussing economics more broadly are so interesting. One of the best popular economics books I have read in years.

[dh · Rating 4 out of 5]

Another eye-opening book.

I've read circa one fifth of the book and the stuff in the part was enough to break down all the stereotypes and misconceptions that I had, partly due to the conventional education of economics- I am an economics major.

Still yet, of the things argued by the author there are some that I cannot fully understand or know whether the argument is true or not. One of them is this ;

Economics activity is firmly rooted in the real, physical world, and thus economics theory cannot escape the laws of thermodynamics.

While it may be true for the REAL economy, where we sell and exchange goods and service for another, I don't think at the moment that it also makes sense for the financial economy where nearly everything is 'pure information' and processed through computers and web. Of course the author said even it is based on a real thing, but how much? The connection in my perspective is very weak to the point where the inflow of energy ( like electricity to make the computer and server used to maintain the stock market) is negligible.

Could we make case also for the stock market ?

gotta read more...

[Erika RS · Rating 5 out of 5]

I consider The Origin of Wealth by Eric D. Beinhocker to be the most important book I've read this year. It brings together insights from psychology, network theory, complexity studies and more into a incomplete-but-illuminating view of how societies have created wealth over time. Wealth, in this case, is about so much more than financial value. It's the sum total of non-relational things that humans find valuable.

The perspective of complexity economics shows the shallowness of our common political divides. While it doesn't provide answers, it does show that the questions are much more nuanced than either the Left or the Right thinks about them.

This book is about so much more than economics, in the narrow academic sense. It's about humanity and how we achieve things in groups.

This book starts with a critique of traditional economics. The primary problem with traditional economics is that it makes unrealistic assumptions about human behavior and system dynamics. Traditional economics assumes that economic agents are perfectly rational actors with perfect knowledge. It also assumes that economies are stable systems that only temporarily leave equilibrium in the face of external factors. Even with these limiting assumptions, traditional economics has been able to introduce many powerful ideas into reasoning about the economy. However, these assumptions are wrong in ways that make many of the economic "laws" that are used to guide real policy fundamentally flawed.

A more realistic set of assumptions completely changes the nature of economic systems.

They are dynamic. They are constantly changing in response to internal factors, not stable systems responding to external inputs.

They are made of individual agents with incomplete information. These agents are rational, but they are inductively rational. They identify patterns based on of past experience and update those patterns as they acquire new information.

The actions of agents are constrained by network structure. Agents are limited in who they can interact with and information takes time to propagate across the whole network.

The system evolves over time. Both what success looks like and the best strategies for achieving success change as the agents interact in the system. These interactions give rise to macroeconomic phenomena, such as boom and bust cycles.

In dynamic systems, such as economies, best ways to optimize is to apply an evolutionary algorithm. This should not be taken as saying that the economy has exact analogues for biological evolution. Rather, that it follows a generic evolutionary algorithm where strategies that best fulfill a fitness function are amplified and modified over time while less fit strategies decline.

Over time, physical technologies, social technologies, and business plans propagate or decline based on their fitness for creating value for people. The fitness function is based both on physical constraints (good building materials must actually hold things up) and on human values. This constantly evolving system leads to the growth of wealth.

There is so much more to the book than this. For example, despite the focus being economics, I consider this book one of the best leadership books I've read this year. The complexity view of economics realizes that we cannot understand the economy without understanding human interactions in general. In the end, that's what makes this such a powerful book.

[Juan Pablo · Rating 4 out of 5]

I've been meaning to thoroughly destroy economics for some time now and after finishing this book, I'm saying to myself "Heck, maybe I will if only for its necessary rebirth."

I studied econ back in college and the more I learned, the more painfully I experienced the disparity between reality and the "science" most powerfully endowed to observe and prescribe the measures for our understanding of human and societal interaction. Let me clear up the "": economics became over a hundred years a powerful form of mathematical masturbation in the hope of becoming a science.

Let's put it this way: What the fuck was that in 2008?

It is too bad this book was written before the 2008 meltdown, as there are various fine ideological points espoused within which would stand reexamination given the newest of crises, but the value of the fundamental aspects of this book remains unchanged.

In short, this books describes the understanding and the undertaking of economics as an enterprise in complex dynamic systems, and what a breath of air it is to know of anyone in economics looking beyond the equilibrium paradigm! It's already well past the time when neoclassical economics gave its fruits and soured, yet, unlike all other fields which deem themselves sciences, economics has managed to stagnate incredibly in a web of power and sink in a swamp of scientific backwaters.

I hope the studies described in this book bear more and more fruit and are granted the recognition they deserve; I hope these economics dethrone the orthodoxy in the search for truth, as we strive for in any scientific pursuit.

I like to think Joseph Schumpeter would be proud of academic destruction of this magnitude.

[Дмитрий Филоненко · Rating 5 out of 5]

Before reading this book I had almost no idea about economics. In university I studied computer science, and we had a half-year course of economics which was meant to be one of a few ‘humanitarian’ courses, just in order to avoid making from us, students, finished computer nerds. All I remember was two intersecting curves for supply and demand, and a boring lecturer talking not that much about economics as about the Dulles' Plan aimed to undermine the Soviet Union. It was in 2001 when the Soviet Union was 10 years dead.

I should admit that ’The Origin of Wealth’ by Eric Beinhocker is one of the most brilliant books I’ve read. And the reason is not only in the subject, in economy per se. It’s a wonderful sample of a wide view which is so important these days, on the current level of science development. Yes, science becomes more and more specialized. There are, for example, no more ‘just’ physicists but rather astrophysicists, specialists in the solid state physics, in the molecular physics, etc. So they say there is no more room for universal geniuses like Leonardo da Vinci. At the same time we can see that some puzzles, especially those ones in traditionally ‘humanitarian’ field, require approaches which are conventional in natural sciences like physics or biology for example. Indeed, you can’t measure a feeling with a ruler (though even this is already controversial). But it’s more and more obvious that many social processes can be modeled using mathematical and physical apparatus. What used to be thought of as rational in human nature is not that rational. What used to be thought of as random in the life of society is not random in fact, but pretty deterministic. It’s just that even deterministic interactions do not presume possibility to solve and to predict the future behavior. And it’s really astonishing to read how modern economics is reconciled with the famous laws of thermodynamics! Which basically creates a new starting point for a new theory of economy.

Author starts with the description of Traditional economics which found its origins at the second half of XIX century and hasn’t changed much up to the end of XX century. It’s here we have those two curves of supply and demand with a single intersection point which assumes an equilibrium... which is never reached.
However the Traditional model is limited with some unrealistic assumptions like perfectly smart people, comprehensive information available immediately to anyone, deals taking no time and no transaction costs, etc. Another problem is that Traditional model keeps many important phenomenons outside the door considering them as external forces. So technological progress, innovations, development of social structures and entrepreneurial drive are left aside. Well, they exist, they definitely impact economy, but they are external forces, they do not find any place and any explanation within the economy theory.
Ok, that could be fine if only such theory worked. But it does not! And it’s another very interesting though not direct outcome of this book. How sticky we can be to some theories which at some time were found bright. Even when such theories are not supported with real data, still! It’s all about a power of authority. Many really prominent people made their fortune and some even got Nobel prizes on the wrong ground. But it’s not this that is sad. Sad is that it took many decades after first voices against this model had been heard before something started changing.

Then Beinhocker presents a Complexity economics approach. This approach is based on a quite rapidly developing scientific tool: complex adaptive systems. A phenomenon is modeled with introduction of some number of interacting agents. Each agent is endowed with a few rules for interaction with the environment and with other agents. These rules are taken from real life observations. Like for example instead of thinking about any person as perfectly rational we can introduce an agent with such close-to-real-life rules: 1) if very hungry -> buy some food in the very first store, no matter the price; 2) if not hungry -> find the cheapest food in stores not farther than 5 minutes walk from the agent’s place; 3) if it’s a weekend and an agent possesses any information on discounts in food stores -> allow him/her to buy food in proximity of 20 minutes walk. Then there can be introduced agents representing food stores with their own rules for setting prices and discount policies. And then such system can be programmed on a computer and run. An emergent result of such system is very difficult to calculate analytically. Mathematically it’s a huge system with many variables and time-lags. Basically impossible to solve. But programmed model can give really interesting insights into behavior of such system. One may expect quite chaotic picture. But after a number of iterations some patterns may crystallize. Then playing with agents’ or environment’s parameters a researcher can find interesting phenomenons in the system.
This approach was applied to economy. And test results were remarkably close to those from real markets.

After this Beinhocker goes further: what basically makes the things go round? Why do new businesses pop up here and there? Why do they collapse? Why is entire wealth growing? The answers to these questions should be a part of the model, not just external magic forces. And in order to answer author makes quite a natural choice. The answer is evolution. In economy the same laws of evolution work. If in bio-world it’s genes who compete for resources and for reproduction by means of their hosts - biological creatures, then in the world-market such genes are small bits of technologies - physical and social - which make some bigger ‘organs’ (management approaches, production tools, products’ features, customer service offers, logistic solutions, performance improvements, etc) which in turn make ‘organisms’ - business plans for making some products or services. So it’s not exactly companies who compete. It’s technology-genes many numbers of which make business-plans. The same as in bio-world the complexity is growing. Inventing one new great thing expands horizon even further making a ground for new improvements or inventions.

Is this all? No! Beinhocker admits that Complex economics and evolution view make things very complex. So if Traditional economics tried to predict the market behavior (though wrong) with the new theory it’s almost impossible to do. But although this theory doesn’t give us a tool for predictions it explains how all this really works. And it’s a very important knowledge. It can be used both on a relatively micro level like managing a company in the ever changing evolution system and on a macro level like understanding the reasons for some states being very rich and some incredibly poor or solving the 200 years old false dichotomy “Left-Right”. How this all relates to culture (as an environment for fostering particular economy-development-genes). How this all relates to moral (Beinhocker introduces thoughts of the many prominent anthropologists, contemporary philosophers, political-thinkers and other). How this all impacts society and is impacted by society. And at the end of the book the economics as a piece of puzzle takes its place in the picture of the whole culture, whole human civilization.

Really exciting reading. Even though many pieces of puzzle still should be discovered and Beinhocker honestly admits this. The author doesn’t make a hero from himself. The number of mentioned scientists, thinkers and businessmen is overwhelming. And he gives them all deserved respect including those whose assumptions were eventually wrong and made the science to take the wrong turn for decades.

[Daniel · Rating 5 out of 5]

The origin of wealth is knowledge. But this book is about complexity economics. The first part of the book explained how traditional economics misses the mark. Equilibrium is never reached, and if you see money on the pavement, just grab it.

The second part explained evolution and how evolutionary models better explain what happens in real life better. Many Business plans are tried but only a few become successful and grow. I think this part is too long. Physical technology and social technology, when put under the selective pressure of the market, produce value.

So how does it help?

1. Strategy. Forget about getting the right strategy. What the dominant strategy now becomes obsolete when technology/taste change or when situation changes. Instead, do what Bill Gates did: after DOS, he mainly invested in DOS and windows but also had alliances with IBM OS/2, Unix and apps, just in case those became dominant. Windows 1.0 and 2.0 were flops, but then 3.0 came and the rest is history. Venture capitalists do the same thing.
2. Firms. They can be hierarchical and efficient, or flat and creative. Without external stress the hierarchical guys dominate; with stress those with creative types dominate. Firms that weather through many crises manage to hold on to their creative types despite years of growth.
3. Finance. Per Andrew Lo’s adaptive markets. Many strategies exist, such as value investing or charting. Charters and standing orders increase volatility. Price fluctuates around values and can be way off by decades.
4. Politics. Cooperaters vs free riders. Too many free riders and a country becomes poor. Cooperation generates massive wealth but mutual trust of citizens is crucial. This cultures matter. Cultures that emphasise about family too much have problems for its citizens to trust others outside their family, and remain poor. Both individual responsibility and generous welfare miss the mark; one should protect the public from downside with universal health care and social safety net. Remove racism. Make every school a good school with central (not local) funding. Raise teachers’ pay.
This is a solid 5-star book!

[Debbie Notkin · Rating 4 out of 5]

This is the basic text for "complexity economics," a theory which, in a nutshell, suggests that we think about economic trends and patterns as evolutionary rather than as fixed principles. Economics is generally treated as an oversimplified, purely quantitative process that can be reduced to formulas and predictability--even though that requires some pretty amazing gyrations.

Beinhocker devotes most of the book to explaining what contemporary macroeconomic theory (at the time he was writing, about 15 years ago) was, and why it doesn't work. He's a very clear explanatory writer--I kept thinking he would be an excellent teacher. The book is laden with examples of experiments and models, very well described. Once he sets up the context of economic theory, he proceeds to throw rocks at it, which is quite disturbingly easy to do. The last third of the book is spent explaining to businesspeople how they can use complexity theory to improve their business plans and eventual bottom lines, with a final chapter on politics which, to my mind, was not fair to either the "left" or the "right," which he considers to be the two poles of political thinking.

I would recommend this as a basic text to anyone who wants to understand how economics works. I might skip his long chapters on the various "libraries of everything" (a library of all possible business plans, whether or not they make sense or are in any recognizable language, a library of all possible books of 500 pages, etc.) And if you're not planning to be an entrepreneur, I would definitely skip the chapters on how to write a business plan with evolutionary/complexity thinking. But the first half of the book is really useful not only for understanding the concepts in use, but also for the models on how to think critically about those concepts. And the ideas of complexity economics can, apparently, be taken much further than Beinhocker took them 15 years ago. I may dip my toes in those waters at some point.

[Tyler · Rating 4 out of 5]

The first 85% of this book was worthy of a 5 star rating and one of the most interesting books I've ever read. His analysis and linkage between Evolutionary Theory and the Economy was compelling. It provides us with a whole new lens to see the economy through and Benhocker's ideas of complex adaptive and open systems, I believe, to be extremely relevant. The case he makes against Neo-classical economic theory is long overdue. As Beinhocker makes clear at the opening of the book "Origin of Wealth" also targets a wide range of audiences and is intended for anyone interested in business, society, and politics. It is a must read for those trying to grasp the complexity of the world economy and the international system.

I said that the first 85% was worthy of a 5 star rating because the ending of the book was long and I disagreed with many of his statements about culture and the causes of poverty. I actually with they weren't there because they left a sour taste in my mouth when I closed the book. Even with, this book should come to be very influential indeed. I recommend!

[Tadas Talaikis · Rating 5 out of 5]

I just saw some seminar notes about it. Finally, that book I had heard few years ago, about the end of left and right nonsense, - complex rational realism.

[Mehdi · Rating 4 out of 5]

I think everyone should read this book for at least one time!
Just so many exciting details and stories.

[Jerry Ward · Rating 4 out of 5]

I can’t recall having ever read an author with the clarity of exposition and the depth and breadth of erudition that is demonstrated by Dr. Beinhocker in this book. It is an impressive work.

The opening sentence of the book asserts that “the field of economics is going through its most profound change in more than a hundred years.” Since much of the book directly addresses and analyzes that change and its implications, I think the book could have more accurately been entitled The Evolution of Economic Theory.

He notes “the two fundamental questions that economists have grappled with throughout the history of their field: how wealth is created and how wealth is allocated.” Adam Smith in his The Wealth of Nations (published 1776) directly addressed both these questions and, with some elaboration by others, established the basic notions of the Classical Period of economic theory; most of these concepts are still accepted today.

Adam Smith and his peers considered themselves philosophers, not scientists, and never attempted to reduce their ideas to mathematical expression. Roughly a century later Leon Walras wanted to change that, he wanted to make economics a science and to make quantitative economic predictions possible. So Walrus set about converting economic ideas into the language of mathematics. He devised a set of equations that represented the equilibrium of cleared markets. Production—how the stuff in the markets was created—was just assumed to have happened, and omitted from the representation. He made other simplifying assumptions. “Walrus’s willingness to make trade-offs in realism for the sake of mathematical predictability would set a pattern followed by economists over the next century.”

Joseph Schumpeter, with his thinking undistorted by trying to produce numbers, brought forth an entirely different vision of how an economy functions, and emphasized the heretofore largely neglected production side of the economy. Schumpeter put entrepreneurship and technical change front and center as the primary source of productivity improvement and therefore wealth creation. He saw the economy as never in equilibrium, always in a state of dynamic change.

Schumpeter’s ideas were valid and persuasive, but his failure to put them into mathematics held them back from getting the affirmation they deserved. Most economists were still trying to describe economic phenomena in a mathematical language that was inadequate to the task, resulting in the need for simplifying but unrealistic assumptions. The three that stood out was, first, that people were always economically rational in their behavior, second, that the economic system was in equilibrium, and third, that innovation—both technical and behavioral (social) change—were not considered part of the system (considered to be exogenous variables).

Robert Solow, a Harvard-trained professor at MIT, won the 1987 Nobel Prize by producing a model of a dynamic economy driven by technical change.

[This whole history is a good illustration of “the rule of the tool”: the idea when one possesses a tool there is a strong tendency to want to use it whether or not it is really appropriate to the task at hand. The result is often that the task is modified to fit the tool. It is often illustrated by the observation that when you give a small boy a hammer is just turns out that nearly everything needs bashing.

The transistor was invented in the 1940’s. This technological discovery made the digital computer possible, and by the latter part of the century had put an entirely new tool in the hands of analysts, largely removing much of the pressure to modify the task to fit the tool.]

The digital computer opened the door to new powers of analysis, and lessened the need for simplifying assumptions made to allow any quantitative analysis at all. The computer is capable of simulating most phenomena, providing versatility to quantitative analysis heretofore not available using conventional mathematics. Complex systems—systems in which the macro behavior emerges from the interaction of the fundament agents—could be simulated and therefore studied. The economy is a prime example of a complex, adaptive system in which the fundamental agents are people and institutions that through their behavior and interaction produce the macro behavior of the total system. For the first time the goal of deriving macroeconomic behavior as an emergent property of microeconomic activity is in sight.

Beinhocker discussed in depth the implications of these events, and provided substantially more color than this brief summary here. He discussed the properties of networks as they affect economic behavior, cognitive phenomena and the unreality of the rational man, and the dynamics of systems with feedback. He illuminated many of the ideas and implications of the economy as a complex system by describing actual computer simulations of various types. He notes that “Complexity Economics is still more of a research program than a single, synthesized theory . . .”

These first two parts of the book focused on the evolution of economic theory. He also mixes in a kind of running tutorial on the terminology and often very surprising properties of complex systems. The third part addressed how evolution creates wealth. It begins with a description and illustration of the generic evolutionary process itself, including a fairly detailed presentation of the story of our biological evolution. He makes the point that the evolution of our economic system and creation of wealth are analogous processes. It seemed to me that while it is of some gee-whiz interest that the generalized patterns were the same, the specific mechanisms were so different that the fact of algorithmic or schematic similarity added very little real understanding of the economic process itself.

He notes that economic evolution is driven by the coevolution of changes in physical technologies, social technologies—how people organize and set rules, and business plans—how people behave to exploit the technical and social innovations.

The rest of the book is devoted to the detailed description and analysis of these three elements. It is very exhaustive, but at a high level of abstraction. For example, there is little or no discussion of the actual technological innovations in our history (except that of making stone tools, which is included to make a point about the properties of invention). He examines all these phenomena from many different angles which I will make no attempt to summarize.

Beinhocker is a master of inductive reasoning, going from the detailed reality to abstract patterns. His grasp of the consilience of the many dimensions of economic behavior is impressive, and the range of his interests and knowledge is downright astounding. I will admit that my reaction on my first reading of the initial chapters was negative: I thought he was painting a negative picture of past economic thinking with the intent of resurrecting it under new labels as new thinking. I was wrong, although I think much of old thinking has held up better than he seems to sometimes imply. But this profound book leaves little doubt that digital-computer-enabled Complexity Economics has and will open the window of our understanding of the creation of wealth very much wider than it has ever been.

[Eric van der Toorn · Rating 4 out of 5]

I received this book from my father for my 15th birthday because he `could not read the small letters'.
Now, 6 years later, I can consider myself part of a set of readers extraordinary in their due diligence and dedication for having finished this book.
While written as a popular introduction on the book, this 500-page literary work engulves one in stats surrounding economic theory, both the incumbent current champion of the day, `Traditional Market Theory', as has been developed from Adam Smith onwards, and a `new' theory of complexity economics that finds its basis in the concept of evolution instead of assumptions on rationality.

[Colin Ledlie · Rating 5 out of 5]

Gosh - 5 1/2 years to get through after a long break in the middle. Very good and well worth the read even if it is heavy going.

[Jack · Rating 4 out of 5]

Solid book. Showed more clearly than anything I've previously read that a small amount of irrationality in markets can cause large deviations from the efficient market hypothesis. Adding a few technical traders to an otherwise-rational stock market can lead to some crazy price action, and adding time delays in a supply chain's response to demand leads to crazy swings in production. I liked Beinhocker's use of the concept of attractors instead of the concept of equilibrium (equilibriums don't usually really exist because of the ever-unstable interactions between agents in a population, a la a red queen race), as well as his use of the concept of punctuated equilibriums from evolutionary biology (network effects/keystone technologies create a punctuated period of rapid change).

Beinhocker argues that we need to evolve more advanced social technologies to accompany our physical technologies, and I find his argument compelling. Humans are bad at cooperating at a large scale, especially when this cooperation involves producing, aggregating, and sharing information. Moving our world closer to a "global society of minds" via new social technologies might be valuable.

Beinhocker's Hayekian critique of the impossibility of central planning could use some reexamining in light of advances in data aggregation and artificial intelligence. It's obvious that solving for equilibrium given individual preferences is NP-hard, but a central planner could form an approximate solution to the problem and then move towards equilibrium through real-time feedback from citizens. Beinhocker writes, "In the absence of actual knowledge of what society wants, and with no mechanism for enforcing a selection of those things, the Big Man hierarchy of the state will simply produce whatever it decides to produce." However, I think a strong enough state could collect real-time data from its citizens, figure out their preferences, and then use these preferences as real-time feedback for this "impossible" optimization problem. I like markets, and I think markets are often the most effective tool for resource allocation, but it upsets me that central planning is written off without more critical thought.

Can be long and dense when getting into the nitty-gritty of why wealth creation is an evolutionary process (I'd recommend skimming these parts) but worth reading overall. Shows we can treat a toy economic system as nonlinear and dynamic via computer simulation and learn many things.

[Kon Moltchanski · Rating 5 out of 5]

For several years now I have been fascinated by the idea of complex adaptive systems - things like markets, economies, cities, nature - just about most systems which govern the world. This really insightful book by Santa Fe Institute Professor Eric Beinhocker goes deep into exploring why economies are not simple, predictable, mechanical machines, but are more like complex evolutionary ecosystems, like life itself.

The idea of complexity economics has been gathering significant momentum in the last few decades, in large part driven by the work of the Santa Fe Institute. Eric completely dismantles the ideas of traditional economics which are based on equilibrium-assuming physics models of the 17th/18th century, and asserts that economies are driven by an evolutionary algorithm which selects for the best ideas/business models/technologies in a fight for survival (creative destruction), which in turn spurs innovation and wealth creation. This idea completely resonates with me as it seems obvious that a highly dynamic, constantly evolving system like an economy or a stock market has emergent properties - i.e. millions of individual agents interacting together creating unpredictable, nonlinear effects that are greater than the sum of their parts - thus making them far too complex to predict with simple input-output models (look no further than the track record of economic forecasters and stock market predictions).

This is a dense book but full of great insights on ideas like emergent behaviour, cycles and oscillations, inequality, network theory and optionality. Will probably cover it in a more detailed standalone article in the future.

This review (along with others) was also posted on my blog:
https://punchcardinvestor.substack.co...

[Egres Rib · Rating 5 out of 5]

This book is packed with ideas and anecdotes circling around the topics of evolution without an end state and bottom-up modeling. It felt like an economic theory book, a history book, a management book, a politics book, a biology book, even a self-help and relationship advice book. While the diversity of applications for the core ideas is plentiful the author manages to keep statements grounded in research and is wary of slippery paths leading to hot air speculation. It was a delight to see how meticulously he constructs each argument, sometimes building the foundation for several long chapters before laying out a conclusion. A very carefully written and edifying book.

While reading i was eager to apply the ideas to my own life. How do i manage my own evolution? Do i have an optimal portfolio of experiments as well as exploit the familiar turf for sustenance? How can i explain the bitterness inducing blotches on the processes at my job? What role can i play in the development of culture around me? Why is our government the way it is?

Things are not set in stone and are not evolving towards a predetermined perfect equilibrium state. We are all in a car, endlessly moving, wheeling our way around pitfalls, reacting, learning and we each get to turn the wheel a tiny bit.

[Jonathan Jeckell · Rating 5 out of 5]

I went through a ridiculous number of highlighters and tape flags marking this book. It provided a fascinating look at how theorists are bringing economics into the 20th Century. Existing economics models borrowed from physics, and thermodynamics in particular, most notably with the concept of equilibrium. This book shows how the economy (and much else) are not so simple, but follow rules found in complex adaptive systems and evolution. Moreover, it provided some fascinating insights into organizations, strategy, and politics (social capital and cooperation actually) and much more that transcended a narrow topic like economics. That makes perfect sense because economics is so intertwined with everything else people do. It was also fascinating how it broke evolution in the economics down by physical technologies, social technologies, and business plans (aka strategy) to generate diversity and adapt, while the market selects and amplifies a fit combination.

[Jeff · Rating 3 out of 5]

This book has a single key idea that the author draws out to 450 pages, when it could have been done in 50. The idea is that people form different ideas for businesses which are then implemented and either succeed and grow or stagnate and die. The ones that succeed are those that are best suited to the current regulatory, economic, and social environment. The ones that continue to succeed are those ones that can best adapt to a changing environment. Neat idea, and probably a new one to a lot of people.

In explaining this relatively simple idea the author draws on nearly every big idea in pop-econ and mass market management books of the best 20 years. I can only assume this is an attempt to mask that his central thesis is obvious to any intelligent reader who's given the issue this book addresses much thought. Presumably he learned this technique at McKinsey.

[Saku Mantere · Rating 3 out of 5]

I am deeply ambivalent about this book. On the one hand, it is a splendidly written introduction to the limitations in classical economics. It is also a great intro to complexity theory. Yet, in its insistence that complexity is a theory for everything (from doing firm strategy to transcending the left-right dichotomy in politics), the book's main argument is trivialized and becomes almost ridiculous.

[Zoltan Pogatsa · Rating 4 out of 5]

A fairly good introduction into behavioural economics. Good read.
Shame about the last, political chapter though. The entire book is full of very strong points about how the political Right and Neoclassical economics are wrong. Then in the last chalter sets up the strawman of Stalinist central planning as the Left, and states the obvious, i.e. that it is wrong. Was he to use Social Democracy as the definition of the Left, his economics would agree with it .

[Castor• · Rating 5 out of 5]

Ρegardless of whether one agrees or disagrees with the views of the book (personally i agree with most of them), I believe it is a must read for economists, social scientist, businessmen and politicians and of course for everyone who wants to grasp how the world works from socioeconomic perspective.

[Pranay · Rating 3 out of 5]

An elaborately stitched storyline going beyond the status quo in market economics, social sciences and business theory. But also a hiding in plain sight a blatant recitation of the free market capitalist’s agenda.

[Anup Gampa · Rating 1 out of 5]

I didn't have the advantage of Marx's theory when I read this book, but I enjoyed it. I might like it a lot more now!