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Pluralism(s) in economics: lessons from complexity and innovation. A review paper

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Abstract

My analysis focuses on two main observations. First, many competing schools of thoughts are currently present in economics with no predominant paradigm. We are experiencing an era of pluralism (Davis J Econ Methodol 14(3):275–290, 2007, Camb J Econ 32:249–366, 2008; Colander 2000; Colander et al. J Polit Econ 16(4):485–499, 2004). The term ‘pluralism’ is extremely interesting since, as I will show, it has different dimensions to it. These offer insights into interpreting the tangled universe of the economics. Second, there is a progressive intertwining of innovation economics with complexity economics, which I argue provides an instance of the above-described shift toward pluralism.

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Notes

  1. As Diamond (2004: 366) points out, Mansfield credits Schumpeter with founding the field (1995, I, p. ix). Rosenberg (1982: 106) says: “[...] the study of technological innovation […] still consists of a series of footnotes upon Schumpeter. Griliches (2000: 45) includes Schumpeter in the list of the early economists who recognized the importance of technological innovation.

  2. Interdisciplinarity is different from multi–disciplinarity. The latter takes place when a particular subject is analysed separately by various disciplines.

  3. I am aware that the literature on the economics of innovation is much wider than what is mentioned here. I will focus on these books since they all propose a wider theoretical apparatus than the earlier, more evolutionary, approach to innovation that has characterized the first attempt at dealing with innovation through complexity (e.g., Foster and Metcalfe 2001; Metcalfe and Foster 2004). For further discussion, see Section 6.

  4. Antonelli also uses agent-based modelling. see Antonelli and Ferraris 2011.

  5. An interesting exception is the book edited by Dolphin and Nash (2012) that is entirely dedicated to applying complexity methods to economic policy.

  6. Schumpeter and the complexity view on economics share the belief that endogenous innovation makes the economies behave ‘out-of-equilibrium’ or, in Schumpeter’s (1939) words, in ‘disequilibrium’.

  7. It is worth noting that Antonelli (2011: 10) is the only one, among the three volumes, referring to Marshall’s partial equilibrium analysis.

  8. See Kirman (2011).

  9. This is discussed in depth in Antonelli (2003) and (2008).

  10. Lane et al. 2009b have similar ideas.

  11. Another argument is that of the presence of increasing returns that disrupts competitive equilibrium (Arthur 1989).

  12. Innovation here is not random, but rather is the product of a purposeful activity. I’ll return briefly to this point.

  13. In accordance with vertical pluralism, Antonelli claims that we should rely on Marshall’s analysis in order to build it.

  14. Schumpeter believed that biological metaphors were of no use to economic analysis and, therefore, the evolutionary penchant of complexity innovation theory could seem in contrast with his views. However, Foster (2000) shows that it is possible to reconcile the two views through the notion of self-organized complexity.

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  1. Department of Economics and Statistics, University of Turin, Turin, Italy

    Magda Fontana

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Correspondence to Magda Fontana.

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I am indebted to R. Bronk for the conversations we had on the theme of pluralism in economic models. He directed my attention to the issue and his papers (2011a, b) inspired in me the ideas developed in this work. The usual disclaimer applies.

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Fontana, M. Pluralism(s) in economics: lessons from complexity and innovation. A review paper. J Evol Econ 24, 189–204 (2014). https://doi.org/10.1007/s00191-013-0333-5

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