The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics
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 hereand where we are going."
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Controversial, but eye-opening and very informative. Recommend for anyone with a brain.
Eye opening and extensive, but not rigorous. The title is a play of words on Charles Darwin's 'Origin of Species', possibly combined with Adam Smith's 'Wealth of Nations'.
This book argues that we should be thinking about economic theory from an evolutionary perspective, and presents evidence of why it can explain and somewhat reconcile both macroeconomic and microeconomic phenomena. Most of the book is about economic theory (though by no means requires an economics background to be understandable or interesting), but the last of four parts moves on to discuss how the perspective can be applied to achieve improvements in business, finance and policy.
I had previously read the odd article on 'evolutionary economics', but this book has given me a significantly better understanding of the field. It is very well researched, and provides strong credibility to the evolutionary perspective. I am an economic and financial policy analyst, and having read this gives me an additional perspective to view problems from.
That leads to the first of my two criticisms of this book. Most economists (at least where I'm from) approach policy with knowledge of numerous different economic perspectives, utilising the most applicable where appropriate. This book picks 'traditional economics' as the mainstream economic view, and criticises it based on the assumption that it is heralded as the answer to how economic systems work. Which it is not (and hasn't been for a while), making it a somewhat a straw-man argument. Like other perspectives, it can be useful in certain applications.
This then allows the author to argue that evolutionary economics should take the podium as the answer to economic theory, due to its superiority over traditional economics. Moreover, rather than 'evolutionary economics', he uses the term 'complexity economics', allowing him to combine evolutionary economics with any other piece of theory that is not traditional economics. For this he presents little theoretical cohesiveness other than showing that the views are not at odds with each other. In a sense, 'complexity economics', being a portfolio of several different theories, is already the current mainstream view, just without so much focus on evolution. Still, you can't blame him; it makes for a more epic argument, and he has books to sell.
My second criticism is that he frequently uses metaphors to present arguments, although often fails to sufficiently link them back to the real world before drawing a conclusion. From memory it occurs most in the chapter applying network theory to internal business organisation. If his arguments hold water, it should not be difficult to include this link.
Overall, however, I found this book quite enlightening. It is a bit unnecessarily long and took me a while to get through, although in the end was well worth it. I recommend it.
ONE The Question
TWO Traditional Economics
THREE A Critique
THIRTEEN Economic Evolution
FOURTEEN A New Definition of Wealth
What It Means for Business and Society
EIGHTEEN Politics and Policy
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The Origin of Wealth: The Radical Remaking of Economics and what it Means ...
Eric D. Beinhocker
No preview available - 2007