Complexity Economics and Workaday Economic Policy
Complexity Economics and Workaday Economic Policy
This chapter argues that complexity theory has significant implications for workaday economic policy. The complexity vision, which pictures an economy as a complex evolving system undergoing continual evolutionary change, has direct relevance for their workaday applied policy. Good applied policy is not applied science but rather more like engineering. This chapter explains why applied policy should not be viewed as applied science and explores some implications and examples of how using a complexity frame for economic policy changes workaday applied economic policy analysis. It argues that complexity policy opens up economics to a wide range of policies that go beyond the standard allocation policies and supplements them with a set of policies designed to influence the ecostructure within which individuals operate. This adds what might be called formation policy to allocation policy. Formation policy views the market and government not as opposites, but as coevolving institutions, and is designed to influence that coevolution. An example of how complexity policy differs from standard policy can be seen in distribution policy, which tends to focus on redistributive taxes. The complexity policy approach to distribution focuses more on modifying the length and nature of evolving property rights as embedded in patent and copyright law.
Keywords: Strüngmann Forum Reports, activist laissez faire policy, applied policy, complexity economics, distribution policy, economic policy, norms policy, property rights
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