"The usefulness of observation and measurement in testing economic theories arises because the theorems of economics are supposed to relate to the actual world. [...] Any economic theorem rigorously deduced from given postulates may be regarded as a hypothesis about the actual world which experience may show to be false." (Richard Stone, "The Role of Measurement in Economics", 1951)
"An economic system is not a linear system, and [...] this fact stands in the way of the determination of the parameters of the system by methods that presume linearity, and [...] it introduces great difficulties in the extrapolation from past behaviour for purposes of prediction. [...] Actual economic systems are constantly subjected to change and disturbances, which would result in irregularity." (Arnold Tustin, "The Mechanism of Economic System", 1953)
"Dynamic theory [...] shows how certain changes in the variables can be explained on the basis of [...] structural characteristics of the system. [...] The economy, of course, does not necessarily find an equilibrium position." (Wassily Leontief, "Studies in the Structure of the American Economy", 1953)
"The analysis of engineering systems and the understanding of economic structure have advanced since then, and the time is now more ripe to bring these topics into a potentially fruitful marriage." (Arnold Tustin, "The Mechanism of Economic Systems", 1953)
"The striking parallel between the economic models that are currently under discussion and some engineering systems suggests the hope that in some way the rapid progress in the development of the theory and practice of automatic control in the world of engineering may contribute to the solution of the economic problems." (Arnold Tustin, "The Mechanism of Economic Systems", 1953)
"The ability to work with systems of general equilibrium is perhaps one of the most important skills of the economist - a skill which he shares with many other scientists, but in which he has perhaps a certain comparative advantage." (Kenneth Boulding, "The Skills of the Economist", Journal of Political Economy 67 (1), 1959)
"The treatment of the economy as a single system, to be controlled toward a consistent goal, allowed the efficient systematization of enormous information material, its deep analysis for valid decision-making. It is interesting that many inferences remain valid even in cases when this consistent goal could not be formulated, either for the reason that it was not quite clear or for the reason that it was made up of multiple goals, each of which to be taken into account." (Leonid V Kantorovich, "Mathematics in Economics: Achievements, Difficulties, Perspectives", [Nobel lecture] 1975)
"The world is a complex, interconnected, finite, ecological–social–psychological–economic system. We treat it as if it were not, as if it were divisible, separable, simple, and infinite. Our persistent, intractable global problems arise directly from this mismatch." (Donella Meadows, "Whole Earth Models and Systems", 1982)
"When it comes to very highly organized systems, such as a living cell, the task of modeling by approximation to simple, continuous and smoothly varying quantities is hopeless. It is for this reason that attempts by sociologists and economists to imitate physicists and describe their subject matter by simple mathematical equations is rarely convincing." (Paul C W Davies, "The Cosmic Blueprint: New Discoveries in Nature’s Creative Ability to Order the Universe", 1987)
"In nonlinear systems - and the economy is most certainly nonlinear - chaos theory tells you that the slightest uncertainty in your knowledge of the initial conditions will often grow inexorably. After a while, your predictions are nonsense." (M Mitchell Waldrop, "Complexity: The Emerging Science at the Edge of Order and Chaos", 1992)
"In many parts of the economy, stabilizing forces appear not to operate. Instead, positive feedback magnifies the effects of small economic shifts; the economic models that describe such effects differ vastly from the conventional ones. Diminishing returns imply a single equilibrium point for the economy, but positive feedback - increasing returns - makes for many possible equilibrium points. There is no guarantee that the particular economic outcome selected from among the many alternatives will be the 'best' one." (W Brian Arthur, "Increasing Returns and Path Dependence in the Economy", 1994)
"We need to abandon the economist's notion of the economy as a machine, with its attendant concept of equilibrium. A more helpful way of thinking about the economy is to imagine it as a living organism." (Paul Ormerod, "The Death of Economics", 1994)
"A major clash between economics and ecology derives from the fact that nature is cyclical, whereas our industrial systems are linear. Our businesses take resources, transform them into products plus waste, and sell the products to consumers, who discard more waste […]" (Fritjof Capra, "The Web of Life", 1996)
"Optimization by individual agents, often used to derive competitive equilibria, are unnecessary for an actual economy to approximately attain such equilibria. From the failure of humans to optimize in complex tasks, one need not conclude that the equilibria derived from the competitive model are descriptively irrelevant. We show that even in complex economic systems, such equilibria can be attained under a range of surprisingly weak assumptions about agent behavior." (Antoni Bosch-Domènech & Shyam Sunder, "Tracking the Invisible Hand", 2000)
"Most systems displaying a high degree of tolerance against failures are a common feature: Their functionality is guaranteed by a highly interconnected complex network. A cell's robustness is hidden in its intricate regulatory and metabolic network; society's resilience is rooted in the interwoven social web; the economy's stability is maintained by a delicate network of financial and regulator organizations; an ecosystem's survivability is encoded in a carefully crafted web of species interactions. It seems that nature strives to achieve robustness through interconnectivity. Such universal choice of a network architecture is perhaps more than mere coincidences." (Albert-László Barabási, "Linked: How Everything Is Connected to Everything Else and What It Means for Business, Science, and Everyday Life", 2002)
"The diversity of networks in business and the economy is mindboggling. There are policy networks, ownership networks, collaboration networks, organizational networks, network marketing-you name it. It would be impossible to integrate these diverse interactions into a single all-encompassing web. Yet no matter what organizational level we look at, the same robust and universal laws that govern nature's webs seem to greet us. The challenge is for economic and network research alike to put these laws into practice." (Albert-László Barabási, "Linked: How Everything Is Connected to Everything Else and What It Means for Business, Science, and Everyday Life", 2002)
"The butterfly effect demonstrates that complex dynamical systems are highly responsive and interconnected webs of feedback loops. It reminds us that we live in a highly interconnected world. Thus our actions within an organization can lead to a range of unpredicted responses and unexpected outcomes. This seriously calls into doubt the wisdom of believing that a major organizational change intervention will necessarily achieve its pre-planned and highly desired outcomes. Small changes in the social, technological, political, ecological or economic conditions can have major implications over time for organizations, communities, societies and even nations." (Elizabeth McMillan, "Complexity, Management and the Dynamics of Change: Challenges for practice", 2008)
"Standard economists don't seem to understand exponential growth. Ecological economics recognizes that the economy, like any other subsystem on the planet, cannot grow forever. And if you think of an organism as an analogy, organisms grow for a period and then they stop growing. They can still continue to improve and develop, but without physically growing, because if organisms did that you’d end up with nine-billion-ton hamsters." (Robert Costanza, "What is Ecological economics", 2010)
"The laws of thermodynamics tell us something quite different. Economic activity is merely borrowing low-entropy energy inputs from the environment and transforming them into temporary products and services of value. In the transformation process, often more energy is expended and lost to the environment than is embedded in the particular good or service being produced." (Jeremy Rifkin, "The Third Industrial Revolution", 2011)
"Defining an indicator as lagging, coincident, or leading is connected to another vital notion: the business cycle. Indicators are lagging or leading based on where economists believe we are in the business cycle: whether we are heading into a recession or emerging from one." (Zachary Karabell, "The Leading Indicators: A short history of the numbers that rule our world", 2014)
"[…] economics is a profession grounded in the belief that 'the economy' is a machine and a closed system. The more clearly that machine is understood, the more its variables are precisely measured, the more we will be able to manage and steer it as we choose, avoiding the frenetic expansions and sharp contractions. With better indicators would come better policy, and with better policy, states would be less likely to fall into depression and risk collapse." (Zachary Karabell, "The Leading Indicators: A short history of the numbers that rule our world", 2014)
"The concept that an economy (1) is characterized by regular cycles that (2) follow familiar patterns (3) illuminated by a series of statistics that (4) determine where we are in that cycle has become part and parcel of how we view the world." (Zachary Karabell, "The Leading Indicators: A short history of the numbers that rule our world", 2014)
No comments:
Post a Comment