Three Books That You Should Be Reading

|Peter Boettke|

Garrett Barden and Tim Murphy, Law and Justice in Community (Oxford University Press, 2010).  This is a fantastic social-philosophic examination of the origins of law outside of the formal apparatus of the state.  The book examines the sense of justice and of 'governance' that must exist for a community to survive, and demonstrates how this predates the establishment of formal government.  The rules of social cooperation are written on the hearts and minds of men, well before they are written on parchment and enforced by the formal apparatus of coercion.

Jenna Bednar, The Robust Federation: Principles of Design (Cambridge University Press, 2009).  Bednar explains how fragile political systems can be under a unified hierarchy, and instead how having multiple levels of governance can build in safeguards.  No one set of institutions can do the trick, instead we need several institutions both competing and cooperating with one another.  A workable constitution is not a one size fits all document.

Scott Page, Diversity and Complexity (Princeton University Press, 2011).  This is an outstanding primer into the literature on complex systems analysis, and Page presents the material in a straightforward and entertaining manner.  The work highlights not only the complexity of our social world, but how current literature is tackling that complexity systematically, and not simply reducing social complexity to simple phenomena in the name of mathematical tractability.  In the process we are also learning more about diversity, novelty and creativity.

I will most likely be teaching from Bednar's book in my PhD course Constitutional Political Economy course in the Spring as well as Page's book for my PhD seminar in Advanced Topics in Austrian Economics.  If the Barden and Murphy book were available in paperback, I'd use that as well for the CPE course.  But since it is not, I will just borrow liberally from it in discussion.

Why am I high on these books?

First, I have personally since the 1980s being trying to champion the ideas of robust political economy on the one hand and creativity, complexity and coordination within the analysis of the market process on the other.  And to see the relationship between the two through institutional design.  This became most evident in my work on post-Soviet transition.  But it is also evident in the work on development, and institutional entrepreneurship and constitutional craftsmanship.  I have also emphasized for as long the de facto over the de jure in the understanding of law and order with respect to the economy.  Unfortunately, I've written a lot of words about it, but none of my efforts have been as professionally persuasive as I had hoped they would be.  The work of Bednar and Page are obviously more successful, and we can learn much from their efforts, their approach, their style and their substance.  Barden and Murphy a deeper philosophic examination of the evolution of the rules of governance that provide the framework for the spontaneous order of social cooperation than earlier efforts.

Second, the work of Page on diversity and complexity captures aspects of the analysis of the dynamic market process that have eluded thinkers since Hayek, and yet many since Hayek have recognized must be incorporated into our analysis of the market but will not be until it is presented in a persuasive form to the modern scientific mind.  In other words, Page (and work by Rob Axtell) represents one way to capture the sort of concerns Hayek had about the discovery, acquisition, and use of knowledge, and the learning, and adjustment to change, that takes place within the market process.  And Barden and Murphy update Hayek's demand for analysis of law different from legislation.  In other words, these books can be seen as the contemporary continuation of a unique Hayekian research program in political economy, social science, and jurisprudence.

Third, these works while advancing beyond the efforts I (and others in my generation of Austrians I'd argue) made in terms of professional persuasiveness, they do not exhaust the evolutionary potential of the ideas they are working with. So the next generation can build on these efforts and push the argument even further yet to make fundamental contributions to the field of understanding social dynamics, social change, and provide the institutional analysis required to advance the argument.

I just hope I can keep up.

 

Comments

[Troy Camplin]

I didn't know there was a new Page book out. Very exciting. It goes on my Amazon Wish List right now!

[Roger Koppl]

I am also glad to see you cite Page. You say Hayekian ideas should be “presented in a persuasive form to the modern scientific mind.” Right on. In the first paragraph of Hayek’s 1920 manuscript, he said he wanted to “integrate” his explanation of consciousness, which he links to H. Berson, “into the worldview of the natural science.” I think he did something very similar with Mises. I like to think of Hayek as the scholar who integrated Misesian economics into the worldview of modern science. I think it was these two attempts at integration that led him to anticipate so much of modern complexity theory. And I think they led him to an epistemologically wiser and humbler theory of complex phenomena. I think modern complexity theory is a good way to get Hayekian ideas more traction with other scholars and, especially, to push Hayek’s program forward in new and unexpected ways.

[Peter Boettke]

Roger,

I am toying with the idea of organizing my advanced topics course around the concepts of creativity, complexity and coordination -- what do you think?

Pete

[Roger Koppl]

The devil is in the details, Pete, but it sounds good to me. It has the advantage that it would be a bit different and thus suggest new connections and so on. I think there are interesting connections between complexity and creativity, as Adam Smith knew. In a simple world (such as imagined in the old socialism) coordination is easy, not in a complex world. Go for it.

[Bill]

On your recommendation, I just picked up Page's book on my kindle. I've been reading through the introduction on my phone (while I should be working), and I think this is one book I won't be able to put down.

[Troy Camplin]

As someone who is interested in creativity and complexity, I think it would be a great course. Especially insofar as you show how Hayek's ideas are being reiterated in network theory, complexity, self-organization, etc.

[Craig]

Pete,

Sorry this post is coming a bit late, I hope you get a chance to see respond...

I think this would be a great course as I have been interested in both complexity theory and Hayek, but haven't seen many recent papers that explor their interconnections in detail (besides perhaps a short piece by Karen Vaughn, a longer one by Don Lavoie, and another by Rob Axtell). There is clearly more interesting work yet to be done, and it would be great if your students were became more involved in this research program. I think your organization of an advanced topic class exploring these interconnections would be great, and possibly very similar to the syllabus I saw online for Richard Wagner's public finance course.

I am familiar with Scott Page's work on complex adaptive systems, and I noticed you also mentioned Rob Axtell's work. What do you think about agent-based modeling of social complexity and other related simulation work? Do you see these applications as popular, trendy, and marketable dead-ends (similar to what Krugman's characterization of Bio-Babble), or are many of these modern complexity researchers like Page and Axtell onto something?

Do you think an aspiring economist would be wise to get into this type of interdisciplinary work (computational social science, cognitive science, etc...) while it is still in its relative infancy, or would one be better off looking at more formal economics programs?

Any other thoughts or papers you could share on what I find to be a fascinating topic? Perhaps Dr. Rosser could weight in as well.

Thanks in advance!

[Roger Koppl]

Craig:

Here are some papers that take the intersection between AE and complexity theory seriously. I don't think any of the following merely nod to complexity or nod to AE. Rather, each paper seriously engages both.

Koppl, R. “Some Epistemological Implications of Economic Complexity,” Journal of Economic Behavior and Organization, 2010, 76: 859-872.

Markose, S. M., 2005. Computability and evolutionary complexity: Markets as complex adaptive systems. Economic Journal 115, F159-F192.

Koppl, R. & J. B. Rosser, Jr. “All That I Have to Say Has Already Crossed Your Mind,” with Barkley Rosser, Metroeconomica, 2002, 53(4): 339-360.

Vriend, N. J., 2002. Was Hayek an ACE? Southern Economic Journal 68, 811-840.

Tsuji, M., daCosta, N.C.A., Doria, F.A., 1998. The incompleteness of theories of games. Journal of Philosophical Logic 27, 553–564.

[Troy Camplin]

Some readings here:

http://studiesinemergentorder.org/

[Michael Makowsky]

For those interested, it is perfectly feasible to study complexity and agent-based modeling while in an economics PhD sequence, particularly if you choose your school well. At some schools it will be easier to find faculty support for such a thesis. Plus, if you're a little less buried in neoclassical boot camp, there's mental room to learn some programming, complexity theory, etc. Don't skimp on the game theory and statistics, though - you're gonna need that!