 |
 |
Dear All, Chuck is right. Interesting article. Seems to be an exciting book .... http://www.nytimes.com/2009/12/22/opinion/22brooks.html?_r=1 Key excerpts: --snip-- Over the past decades, many economists have sought to define the differences between the physical goods economy and the modern protocol economy. In 2000, Larry Summers, then the Treasury secretary, gave a speech called “The New Wealth of Nations,” laying out some principles. Leading work has been done by Douglass North of Washington University, Robert Fogel of the University of Chicago, Joel Mokyr of Northwestern and Paul Romer of Stanford. Their research is the subject of an important new book called “From Poverty to Prosperity,” by Arnold Kling and Nick Schulz. Kling and Schulz start off entertainingly by describing a food court. There are protocols everywhere, not only for how to make the food, but how to greet the customers, how to share common equipment like trays and tables, how to settle disputes between the stalls and enforce contracts with the management. The success of an economy depends on its ability to invent and embrace new protocols. Kling and Schulz use North’s phrase “adaptive efficiency,” but they are really talking about how quickly a society can be infected by new ideas. --snip-- But they are still economists, with worldviews that are still excessively individualistic and rationalistic. Kling and Schulz do not do a good job of explaining how innovation emerges. They list some banal character traits — charisma, passion — that entrepreneurs supposedly possess. To get a complete view of where the debate is headed, I’d read “From Poverty to Prosperity,” and then I’d read Richard Ogle’s 2007 book, “Smart World,” one of the most underappreciated books of the decade. Ogle applies the theory of networks and the philosophy of the extended mind (you have to read it) to show how real world innovation emerges from social clusters. Economic change is fomenting intellectual change. When the economy was about stuff, economics resembled physics. When it’s about ideas, economics comes to resemble psychology. --snip-- What particularly interests me about this article is a key insight in the last two sentences: "When the economy was about stuff, economics resembled physics. When it’s about ideas, economics comes to resemble psychology." Both the importance of behavioral economics and the consilience of approaches that shed light on the knowledge economy are vital aspects of understanding how things work in the larger world of human affairs. Cohen recommends two books. To these, I'd add a third book by David Warsh, "Knowledge and the Wealth of Nations: a Story of Economic Discovery." In the 1980s, Warsh wrote "The Idea of Economic Complexity," one of the early efforts to apply the ideas of what would become complexity theory to economics." Warsh also maintains an excellent free website titled "Economic Principals" that provides insight on these issues and much more. http://www.economicprincipals.com/ Warm wishes, Ken Ken Friedman, PhD, DSc (hc), FDRS Professor Dean Swinburne Design Swinburne University of Technology Melbourne, Australia