Blog
The Emergence of Niceness
By Thomas Grund, Christian Waloszek, and Dirk Helbing The body of economic literature will have to change, suggests new research. In their computer simulations of human evolution, scientists at ETH Zurich find the emergence of the “homo socialis” with “other-regarding” preferences. The results explain some intriguing findings in experimental economics and they call for a new economic theory of “networked minds”. Economics has a beautiful body of theory. But does it describe real markets? Doubts have come up not only in the...
read moreChinese Thinking and Complexity
By Greg Fisher Last week I attended an excellent conference in Singapore, which had the intriguing title of “A Crude Look at the Whole”. The title was attributable to Murray Gell-Man who was one of the founding fathers of the Santa Fe Institute and also the winner of the 1969 Nobel Prize in Physics. Gell-Man is famous for a few things, including being the first to postulate the existence of quarks. Another is the idea of coarse-grained cognition. This is the (to me sensible) idea that reality is extremely fine-grained in terms of...
read moreSocial versus natural complex systems
By Greg Fisher Last week I referred to the differences between natural and social complex systems in a blog article about FuturICT. I received an email from an esteemed colleague who questioned (paraphrasing) whether this distinction was useful and whether in so doing I was putting humans on a pedestal. In this article I want to expand on what I meant because I do think there are fundamentally important difference between these two types of system. My argument centres on two main points: emergent domains & principles and...
read moreLies, Damned Lies and Big Data
By David Hales Almost everything we do these days leaves some kind of data trace in some computer system somewhere. When such data is aggregated into huge databases it is called “Big Data”. It is claimed social science will be transformed by the application of computer processing and Big Data. The argument is that social science has, historically, been “theory rich” and “data poor” and now we will be able to apply the methods of “real science” to “social science” producing new validated and predictive theories which we can...
read moreThe Empire Didn’t Strike Back… The Demise of FuturICT
By Greg Fisher Last week the European Commission chose not to invest in FuturICT, which was a massively ambitious project to integrate ICT and complexity science. The aim was, as their website puts it, “understand and manage complex, global, socially interactive systems” and in so doing to “create a paradigm shift”. Driven mainly by ETH in Zurich and UCL in London, a stellar consortium of universities was created across the entire European Union, and had the active support of MIT in the US. Millions of Euros,...
read moreBranding Heterodox Economics
By Rory Sutherland Those of you who are, like me, only dimly familiar with the writings of Peter Drucker will at least know one of his most famous pronouncements. “There are only two things in a business that make money – innovation and marketing. Everything else is a cost.” I always liked this assertion, and have probably quoted it once or twice. But, to be perfectly frank, I had never used it very confidently. It always seemed so contrary to the prevailing business culture of the moment (where the highest end of business...
read moreBanking Reform – Is That It?
By Greg Fisher I recently had cause to look at the Draft Financial Services (Banking Reform) Bill, which was published a few weeks ago. It made for depressing reading because, in my opinion, the proposed reforms will do little to protect the UK from a future banking crisis. Furthermore, it will not address two fundamental problems in the UK banking industry, namely the problem of concentration and banks’ insensitivity to local conditions and individuals’ needs. In this article I will use the new field of dynamic networks to evaluate...
read more“rutenso” – the art of working with complex systems
By Mark McKergow It’s tempting to think of complex systems as being like simple systems, only more complicated. This is a mistake, of course – complicated systems have many elements but are nonetheless comprehensible in everyday terms. A 747 airliner is hugely complicated, but is designed and engineered to do certain things in certain ways, in a predictable fashion. A complex system, on the other hand, is a fundamentally different class of affair. Feedback loops, positive linking and meshed interconnections mean that however well we...
read moreWhy the New Funding For Lending Scheme Won’t Work Either
By Greg Fisher If the managers of UK banks believe a recession is imminent then they will be cautious about lending. Similarly, if these same managers think the future state of the economy is highly uncertain, they will also be cautious in making lending decisions. Either way, prudent lending is not conducive to an economic recovery. Unfortunately, the new Funding For Lending scheme, which was announced by the Treasury and the Bank of England two months ago, is very unlikely to influence bankers’ expectations of – nor their...
read moreMacro-Economic Modelling and Its Uses
By Bridget Rosewell An International Macro Symposium conference this week hosted by the ESRC and the Oxford Martin School has brought home to me how little things have changed in some quarters. There is still a belief that with some tweaks the old modelling frameworks can capture the elements that were missing before the crisis, and a deeply held belief that agents that maximise are the key components of the economy. What became clearer to me in the discussions in the symposium is why I think this is wrong. I’ll start with maximisation,...
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