Welcome to Econ Talk, Conversations for the Curious, part of the Library of Economics and Liberty.

I'm your host Russ Roberts of Shalem College in Jerusalem and Stanford University's Hoover Institution. Go to Econ Talk. in to today's conversation. You'll also find our archives with every episode we've done

going back to 2006. Our email address is mail at econ talk.org we'd love to hear from you. Today is August 1st, 2024, my guest is physicist Doan Farmer.

He is the Bailey-Gifford Professor of Complex System Science at the Smith School of Enterprise and the Environment at Oxford University.

He's also director of the Complexity Economics Program at the Institute for New Economic

Thinking at the Oxford Martin School. In addition, he is an external

professor at the Santa Fe Institute. He is the author of Making Sense of

Chaos a Better Economics for a Better World, which is our topic for today.

Doh and welcome to Econ Talk.

Thank you.

Happy to be here.

Let's start off with the fundamental idea behind your book and much of your

career which is the idea of complexity economics. What does that mean to you? What does that, what is

complexity economics?

Well, simply put, it's the applications of complex systems, science, and methods to economics.

And more specifically, that means doing economics in a different way than

mainstream economists do it. It means simulating the economy rather than

using utility maximization to write down equations to solve for what people will do.

So I'm trained as a standard economist more or less, sometimes more, sometimes less.

And I'm sympathetic to a lot of your critiques of economic theory, but in other areas I'm going to try to defend them.

Certainly you're right that in the standard economic model people are motivated by some form of maximization, typically utility being a relatively

empty phrase, meaning whatever they happen to like, and people try to get as much utility constrained by the fact that they have

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