Better late than never

Over 125 years late to the game, it is nevertheless refreshing to see some scientist 'getting it' with regards to the concept of spontaneous order. Prof. Steven Strogatz has published a new book, "Sync: The Emerging Science of Spontaneous Order", where he popularizes the notion that not only do disparate, non-orchestrated, and non-intelligent creatures and objects have the ability to nevertheless order themselves spontaneously (without direction from a higher source), but that this spontaneous ordering is ubiquitous throughout nature.

In 1989, Strogatz proved how certain species of firefly can coordinate the flashing of a large population simply by keeping time and observing the flashes of their nearest neighbors.

"Can perfect synchrony emerge from a cacophony of thousands of mindless metronomes? ... The answer is yes. Not only can it work -- it will always work, under certain conditions," Strogatz writes.

[...]

According to Strogatz, sync is a natural subset of complexity theory which itself was a byproduct of chaos theory. "To a scientist, chaos means complicated behavior in a system with few variables. There was a great explosion of our understanding of this in the 1980s and since then scientists have moved on to systems with lots of variables," Strogatz said. This new arena is the realm of complexity theory.

Sync takes up the challenge of popularizing these emerging subjects with the general public -- an endeavor previously pursued in books like James Gleick's Chaos and Malcolm Gladwell's The Tipping Point. However, like a good deal of the popular literature on these subjects, these texts were written by journalists.

[...]

In addition to existing technologies that rely on synchronization, Strogatz says that sync holds the potential to reveal further useful applications.

"In addition to the shear wonder of knowing why crickets chirp in sync or how the cells in your heart keep in step for three billion beats in a lifetime, there are applications in medicine and communications. For example, maybe you want to understand cardiac arrhythmias or how the brain works. There are also applications in super conducting and wireless communications," Strogatz said.

Strogatz is encouraged by the progress he sees in these new areas and the advances they are spurring in a whole range of fields. One of the limitations of sync and complexity, however, is that they do not yet possess the rigidity of the "harder" sciences.

"College physics, for example, has been around for a few hundred years so it's fairly well understood. However, we are now living through the birth of a subject that is bigger than physics because it includes physics. I'm sure that the answers are coming, but it probably won't be tomorrow," Strogatz said.

Bravo! Strogatz has come to understand what Austrian economists and biologists have known for the better part of 2 centuries- that nature spontaneously organizes and complex order emerges from individual parts following simple rules. Although I would disagree with his desire to make his 'new' science 'harder' or more 'rigid'. As Bryan Caplan (a defender of the ubiquity of mathematics in neoclassical economics from Austrian criticisms) admits, "[Mathematics and Econometrics] have had fifty years of ever-increasing hegemony in economics. The empirical evidence on their contribution is decidedly negative."

So if those researching Sync want to have success when it comes to thinking, subjective creatures, they'd be best advised to, as Alfred Marshall suggested, "burn the mathematics."

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Brian, I am very pleased to

Brian,

I am very pleased to see someone promoting Strogatz's book. It is quite excellent. I am in the middle of researching the whole field of (what I call) self-organizing systems and applying the ideas to economics.

You might find Ken Arrow's thinking interesting. Arrow, co-author of that apex of mathematical economics - General Equilibrium, is quite in favour of shooting his baby. He has done a lot of work with Brian Arthur and Stuart Kauffman of the Sante Fe Institute. Arrow wrote the introduction to Kauffman's Investigations as well as helping organize 2 conference on the Economy as a Self-Organizing System.

If you are interested (by email or response) I will put together a annotated list of the most interesting books I have read on the subject.

I think you are over anxious to give the Austrian's credit. There is no doubt that Menger and Hayek made massive contributions to the field of spontaneous order. However, so did Adam Smith and Jean Baptiste Say. I think Charles Darwin gets some credit as well. The Scholastics promoted ideas about spontaneous order.

The Austrian School had awesome insight on the subject. However, they did little to formalize the idea because they didn't have the tools. It was the work of Claude Shannon on Information Theory and Ludwig von Bertalanfy on General Systems Theory that were the critical breakthroughs.

I believe we are in the middle of a paradigm shift at the core of science - a second scientific revolution that will beget a second elightenment. Science will now have 2 branches - material science and living systems. Each branch will have it's own core logic (reduction vs. 'holism', deduction vs. induction, analysis vs. synthesis, etc.). The ideas of causation, prediction, falsification and repeatability will be very different in the two branches. However, I believe that a philosophy and methodolgy allowing for the rigourous study of living systems will emerge.

I disagree with your automatic dismal of mathematics. Mathematics is just a tool, the problem is with the application. Alfred Marshall once said that biology was a better method than physics for the study of economics, the problem was that biological toolkit was too incomplete. Economists imposes the metaphor of a machine on economic activity because the toolkit was more complete at the time. The real problem is that the machine metaphor is very limited. There are problems in the science of self-organizing systems which require some complex mathematics. The results will be useful to the degree that the model encoded in the math fits with reality.

I don't think we will see a major reworking of current economic theory. Instead, I think we will see a new field emerge to study non-ergodic economics. Hayek, Coase and Schumpeter will be the exemplars for this new field of economics. I consider Hayek to be the Descartes of the second scientific revolution and I think he will be more appreciated this century than last century.

Hopefully, the Austrian School will learn to see their contribution as one contribution in a long history of vigorous intellectual inquiry. Otherwise, they will miss the very party they have helped create.

"I believe we are in the

"I believe we are in the middle of a paradigm shift at the core of science - a second scientific revolution that will beget a second elightenment. Science will now have 2 branches - material science and living systems. Each branch will have it's own core logic (reduction vs. 'holism', deduction vs. induction, analysis vs. synthesis, etc.). The ideas of causation, prediction, falsification and repeatability will be very different in the two branches. However, I believe that a philosophy and methodolgy allowing for the rigourous study of living systems will emerge."

What are "material science" and "living systems"? You left those up in the air.

And there already two methodologies in place today, one is *a priori* (logic/mathematics) and the other is *a posteriori* (empirical sciences): http://www.wikipedia.org/wiki/A_priori_and_a_posteriori_knowledge

Also, I'd like to see the equation that represents humans evaluating a widget based on their subjective preferences. Please email me that when you get a chance.

And as far as Hayek goes, I personally do not share the same level as enthusiasm as you do... he wasn't exactly consistent with his views towards aggression and State intervention.

Tim, Material Science are

Tim,

Material Science are the hierarchy that starts with quantum mechanics and builds through physics, chemistry, biochemistry, cosmology, ... Anywhere scienfic field where reduction holds.

Living Systems Science includes molecular biology, evolutionary biology, genetics, celluar biology, evolutionary psychology, sociobiology (the non-human form of evolutionary psych). I believe that some of the fields studied by 'traditional' social science will come under the wing of the emerging science of living systems.

Hey, I spend a good amount of time thinking and posting because I respect you and your blog. I have some information and insight I think you would find interesting. If you continue with snarky unhelpful questions like "Show me the forumula for subjective preference". If all you think I am that stupid and you are that smart I will take my subjective preference somewhere else.

It's another example of what I consider the victimization of Austrian Economists. They can't remain civil long enough to listen and understand new ideas. It's funny hearing them accuse the mainstream economists of ignoring the Austrial insights. Pot calling the kettle black. The Austrian School in it's present form is the single most cutoff and close minded in all of Economics.

Paul, We appreciate all our

Paul,

We appreciate all our commenters' opinions, and hope this blog can be a place of civil discussion even if we disagree, rather than the flamefests that often break out on other blogs. Although I consider myself a student of the Austrian school (in the Misesian mold rather than the Hayekian mold), I also am fascinated by other approaches. David Friedman, Bryan Caplan, and Ronald Coase, among others, are some of my favorite people to read. Some contributors to this blog do not necessarily consider themselves Austrians either, and I hope to learn from them and grow my knowledge base.

Having said that, I do think Tim raises a valid question. If mathematics is to play a formidable role in the study of economics, the fundamental assumptions of methodology need to be evaluated. How can human preferences be quantified or translated into mathematical equations?

Granted, I am biased as a Misesian, but I think methodology is very important. If the fundamental assumptions are flawed, then any deductions based on those assumptions are invalid. Many non-Austrians see this approach as 'close-minded' or 'dogmatic', but good science is skeptical. If we don't know something, then we don't know it. I would rather know what we don't know than make conclusions on faulty assumptions.

Jonathon, All I claimed was

Jonathon,

All I claimed was that for some problem in self-organizing systems mathematics is a crucial tool. I also claim that the error in neoclassical economics is the underlying metaphor not the particular mathematics. Mathematics is simply a tool.

No where did I say that every problem needs a mathematical formal articulation and solution. The particular problem, subjective preference vs. rational choice, is a very large problem. Over the past decade a number of fields have made some real headway into the issue. Most have used a priori logic, some have used population mathematics (evolutionists use populatian math).

I am a systems theorist. Methodolically I am more 'a priori' than not, even though my training is in mathematics. However, there are problems where math is the right tool. (Again, the problem in neoclassic economics ISNT the use of math, it is the limited metaphor imposed by the math - it is the inappropriate use of tools). Where I will difer from the Austrians is that I am a radical constructivist, I reject the epistimology of Arisotle, Plato and Descartes. As George Lakoff says, it's time to update our philosophy based on what we know about the brain and human mind. We reject Artistotle's Physis, why not his Epistimiology.

BTW,the question about mathematical formalized expression of subjective preference was in no way a good question. It was a loaded question, meant only to prove a point not continue a dialog. I wasn't in the mood to be tweaked.

BTW, I have (clearly) some issues with the Austrian School. Mostly, I buy into the core ideas. As I said Hayek, Schumpeter and Coase are my economic guiding lights.

[The Austrial criticque of Schumpeter is a sore spot and I believe the Austrian's (including Hayek) will 100% wrong).]

Paul, BTW, I have (clearly)

Paul,

BTW, I have (clearly) some issues with the Austrian School. Mostly, I buy into the core ideas. As I said Hayek, Schumpeter and Coase are my economic guiding lights.

Understood. I would be better labeled a 'Misesian' if those three are considered Austrians. I like to study economics based on the praxeological approach as espoused by Mises and Rothbard.

Although Hayek is considered an Austrian by most people, I think his contribution is more on the philosophy and law side of things. There is debate whether or not his 'knowledge problem' is a valid extension of Mises's Economic Calculation critique of socialism; I tend to lean to the side that says it is not.

I consider Coase to be a Chicagoan rather than an Austrian. Although a lot of his stuff is very interesting, his Theorem does not thrill me as much as it does others.

I don't know much about Schumpter above the superficial level.

Jonathon, Sorry, I did not

Jonathon,

Sorry, I did not mean to imply that Coase and Schumpeter were Austrian. Clearly Coase is not Austrian. Schumpeter is Austrian by birth and he studied many of the same phenomena as Mises and Hayek. He has more interesting things to say about the impact of technology and innovation than any other economists. He was rejected by Hayek because Schumpeter wouldn't reject the Walrusian paradigm. Schumpeter, as I, believed that equilibrium economics had a place although he doesn't use equilibrium methods himself. In complexity theory terms, Schumpeter studied far-from-equilibrium phenomena.

What Hayek, Coase and Schumpeter have in common is the study of the structural and funcational dymanics of economic change. The include structural change in their core assumptions. They, to various degrees, treat the economy as a system rather than a machine. This is my interest.

I see the economy in biological terms. Technology, knowledge, society, the brain and the human mind are co-evolving systems. The new field of economics I see emerging will ask the question "How do human beings make a living and organize themselves to make a living." The question becomes about contribution, co-operation and co-oridination rather than 'allocation of scarce resources'.

Just a evolutionary psychology is reframing the debate in many fields of psychology, a self-organizing, evolutionary economics will reframe the debate in many economic fields. This is what I mean by 'the party is coming to the Austrians'. I think Jared Diamonds 'Guns, Germs and Steel' was the start of the process. Robert Wright's Non-Zero overlaps the topic about 50%. Joel Mokyr is writing a book on evolution and ecnomics. I disagree with some of his ideas but he does set the unit of selection correctly at technique. Most evolutionary economists use the firm as the unit of selection, which doesn't work.

So, that is briefling where I see the emerging science of spontaneous order impact economics. I recommend Stuart Kauffman's Investigations for some speculations that you might find interesting. Warning, these are speculation and Kauffman is not a great writer but I find the ideas compelling even where I think they are wrong. He is pointing at something important. His notion of 'autonomous agent' may be where the Austrian School and self-organizing systems connect.

Paul

I see the economy in

I see the economy in biological terms. Technology, knowledge, society, the brain and the human mind are co-evolving systems. The new field of economics I see emerging will ask the question "How do human beings make a living and organize themselves to make a living." The question becomes about contribution, co-operation and co-oridination rather than 'allocation of scarce resources'.

Then your conflict with the Misesian approach is readily apparent. Mises's approach was methodological individualism; he would likely balk at the idea of studying systems, as systems do not have ends and do not employ means to achieve ends. Under methodological individualism, the emergent properties of human systems are fully depenedent on the individuals comprising that system and the choices they make at an individual level.

Which brings me to a view that I hold - that the Austrian school studies something different from what other schools study, even though both call their field "economics". As a perhaps too simple generalization, the Misesian school studies individual human action and its ramifications, whereas other schools study the optimization of systems.

You say that 'the party is coming to the Austrians'; I would argue that Mises's methodological individualism broke away from the party of collective-based approaches.

Johnathon, Thanks for your

Johnathon,

Thanks for your comment. The word 'system' is problematic. There is a discipline 'systems theory'
or 'systems science' that uses the word system in a very rigorous way. I can assure you that most modern economics theory does not use the word system in the way systems theory does. The post that started this thread was about Stogratz's work on Spontanous Order. Stogratz builds heavily on the foundations of systems theory. It would be impossible to appreciate Stogratz and reject systems theory.

I doubt Mises would reject the systems approach, although I am only speculation. Methodological individualism and the systems concept of 'autonomous agaent' are close cousins. As I said, I believe that this is where the Austrian School and the science of self-organizing systems connect.

Here's my point. There is something quite close to a scientific revolution happening and, in many ways, that revolution is asking questions similar to the questions asked by the Austrian School. The original posts enthusiam for Stogratz is an indication of that sympatico. Now, I will leave it your own sense of curiousity. I have had my say.

Paul, Thanks for the

Paul,

Thanks for the reply:

"Material Science are the hierarchy that starts with quantum mechanics and builds through physics, chemistry, biochemistry, cosmology, ... Anywhere scienfic field where reduction holds.

Living Systems Science includes molecular biology, evolutionary biology, genetics, celluar biology, evolutionary psychology, sociobiology (the non-human form of evolutionary psych). I believe that some of the fields studied by 'traditional' social science will come under the wing of the emerging science of living systems."

I've never really thought about that kind of seperation, my question is: does either branch do away with the scientific method -- the need for empirical data?

"Hey, I spend a good amount of time thinking and posting because I respect you and your blog. I have some information and insight I think you would find interesting. If you continue with snarky unhelpful questions like "Show me the forumula for subjective preference". If all you think I am that stupid and you are that smart I will take my subjective preference somewhere else."

It wasn't my intention on being an ass (usually I just post ASCII middle-fingers if that is my goal). Still the same, your comment reminded me of that Prodos guy: http://www.physics.prodos.org/ -- my apologies.

"It's another example of what I consider the victimization of Austrian Economists. They can't remain civil long enough to listen and understand new ideas. It's funny hearing them accuse the mainstream economists of ignoring the Austrial insights. Pot calling the kettle black. The Austrian School in it's present form is the single most cutoff and close minded in all of Economics."

Nah, Walrasian economics is the most cutoff and close minded, Austrian econ is just like Slackware Linux: http://www.bbspot.com/Images/News_Features/2003/01/os_quiz/slackware.jpg

Tim, Thanks for the apology.

Tim,

Thanks for the apology. I may be wrong but I like think that I am not a flake. I put a complex new idea into a quick couple of ad hoc paragraphs. Not the best form of argumentation possible. I am quite confident in my prediction about the second branch of science. The phenomenon is getting some play under the label 'consilience'. Google 'consilience' to get a sense of what I am talking about.

Neither branch is going to alter the use of empirical data. However, the 'living systems' side does give up strict reductionism and induction. There is nothing close to a standard philosophy or methodolgy on the 'living systems' side. The various fields are only starting to recognize that they have a lot of common ground and many similar divergences from 'traditional science'.

The single best overview is Frijtof Capra's Web of Life. Capra usual goes over the top with his environmentalism but he manages to keep that out of this book. Jane Jacob's 'The Nature of Economies' is a good start on some of the economic issues.

The Walrus school is only bigger than the Austrian school. In both cases, it looks like dogma, smells like dogma, tastes like dogma ... it's dogma.

Paul

Do you argue that using empirical data has no value? or that empirical data is just one elemnt of a methodology?

"Do you argue that using

"Do you argue that using empirical data has no value? or that empirical data is just one elemnt of a methodology? "

Oh, certainly not. In fact, I'm in the middle of a debate with a newly minted PhD in Austrian Econ who has few kind words to say about empirical science, especially biology.

In terms of economics, I agree with Austrians, that economics is an a priori field (a Misean would be more specific as Schumpeter and Hayek are not of my liking). Though as I said before (in a wise ass manner), I am open to seeing a mathematical model that can quantify human action (which is subjective). I should note, that the same challenge is open to those who believe a "god" exists, have him knock on my door and make me a believer : )

Tim, Some people who know me

Tim,

Some people who know me will enjoy the irony of me defending empiricism. I am very much not empirical myself, however I do have respect for those people who can do empirical research and analysis well. Right tool for the right job used well is all I ask.

IMO the biggest problem facing the field of economics is the breadth of territory the term 'economics' claims and the lack of coherence in the underlying models. You say economics is an 'a priori' field. I think you mean the study of economic choice is an 'a priori' field. If you mean that ALL economic activity (market structure, insitutional structure, production structure, ...) is 'a priori' then I will disagree. Before I get the lecture, I don't accept the field of macroeconomics.

It is sad to see you dismiss Schumpeter and Hayek so completely. In that I think you have an unjustified and unjustifiable confidence in your methodology. No human intellectual study is capable of producing the degree of certainty that Austrians claim. I accept many of the core understandings of the Austrian School, I have learned much from them but the us-against-them mentality is very unattractive. If you cannot find vast amount of valuable insights in the thinking of Schumpeter and Hayek, despite the methodological differences, I don't think your methods are particularily useful.

In modern evolutionary theory there has been a huge battle. The flag bearers of the two-sides are Richard Dawkins and Stephen Jay Gould but the fight involved most senior evolutionary theorists. It turns out (in my opinion) that most of the fight was 'much ado about nothing' and where there was substantive difference the resolution came from a field (evolutionary ecosystems) that neither side ever even considered.

I am now of the opinion that the same thing will happen in Economic theory. Time will tell.

Paul

Paul, "IMO the biggest

Paul,

"IMO the biggest problem facing the field of economics is the breadth of territory the term 'economics' claims and the lack of coherence in the underlying models. You say economics is an 'a priori' field. I think you mean the study of economic choice is an 'a priori' field. If you mean that ALL economic activity (market structure, insitutional structure, production structure, ...) is 'a priori' then I will disagree. Before I get the lecture, I don't accept the field of macroeconomics."

What do you mean by structure? Do you mean measuring the physical structures or the business models/institutional plans?

"It is sad to see you dismiss Schumpeter and Hayek so completely. In that I think you have an unjustified and unjustifiable confidence in your methodology. No human intellectual study is capable of producing the degree of certainty that Austrians claim. I accept many of the core understandings of the Austrian School, I have learned much from them but the us-against-them mentality is very unattractive. If you cannot find vast amount of valuable insights in the thinking of Schumpeter and Hayek, despite the methodological differences, I don't think your methods are particularily useful."

It's not that I'm dismissing their methodologies so-much-so as it's their justification for any State intervention. I do not think the State is a civil insititution, nor do I think it is justified in interfering with anything.

Which methodologies did you have in mind as to those of which I might have objections over?

"In modern evolutionary theory there has been a huge battle. The flag bearers of the two-sides are Richard Dawkins and Stephen Jay Gould but the fight involved most senior evolutionary theorists. It turns out (in my opinion) that most of the fight was 'much ado about nothing' and where there was substantive difference the resolution came from a field (evolutionary ecosystems) that neither side ever even considered."

I understand what you're saying, but neither Gould or Dawkins insists that a "supernatural" event is the answer to what the actual method by which biological evolution takes place. Hayek and Schumpeter however promoted a "supernatural" entity called the State which they promoted and defended throughout their writings as the answer to perceived market failures (especially with courts and defense).