W Brian Arthur – Complexity and the Economy
Interview with W Brian Arthur drawing from his book Complexity and the Economy. Explains how traditional economics simplifies complex systems, assuming rationality and equilibrium. Introduces the El Farol game theory problem, demonstrating how individual adaptive decisions, not deductive optimisation, create emergent, dynamic patterns – a concept physicists grasped more readily than economists. Discusses how complexity economics drops these restrictive assumptions, viewing the economy as an evolving ecology of diverse, imperfectly informed agents. This approach, mirroring shifts in other sciences, enables understanding real-world phenomena like market bubbles and crashes, moving beyond static equilibrium models towards ‘messy vitality’.



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