Hello everyone, welcome to the Mindscape Podcast. I'm your host Sean Carroll.

Long time listeners will know that one of my areas of interest is complex systems,

the study of complexity, the kind of thing that the Santa Fe Institute does and was founded to do.

And if there is any system we can imagine that you would characterize as complex,

it would be an economy, right? Economy of a large industrialized country.

There are a lot of moving parts related to each other in different ways.

It seems as if, a priori, economics and complexity theory would go hand in hand.

But in fact, when you actually sit down to do economics, just like when you sit down to do any other science,

you look for simplifications, right? You look for things you don't need to pay attention to,

simple versions of the problem that you can really get a lot of insight into.

And in economics, this takes a lot of different forms.

We assume that the different people in an economy are more or less rational, that they have complete information,

that they're more or less all the same kind of people.

And most of all, that the economy is basically in equilibrium, right?

Think of supply and demand. It's given the certain supply curve,

and a certain demand curve, the price will adjust to a certain point relatively rapidly,

and then you'll be in equilibrium.

So complex systems research is all about things where you cannot assume that all the parts are the same.

You cannot treat things as if they were in equilibrium.

You can imagine the different parts of the system have different amounts of information and so forth.

So this opens the idea that economics is actually not taking full advantage of the insights gained from complex systems research.

And we should study something called complexity economics.

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