External Professor, Santa Fe Institute

and Visiting Researcher, Intelligent Systems Lab, PARC

Interests
 

• A More Realistic Economics.   Economics is going through a radical remaking at the moment. There's a widespread feeling that standard neoclassical economics has delivered much, but with its exaggerated view of humans as super-rational impassive actors operating in a static equilibrium world, it has failed to predict bubbles and crashes and to deal with the imperfections of markets. Since the mid-1980s, I and my group at the Santa Fe Institute have been developing an alternative view that's come to be called "complexity economics." This economics assumes that the actors in the economy do not necessarily face well-defined problems or use super-human rationality in making their decisions. And they react and re-react to the outcomes they together create. Viewed this way, we find the economy is not in stasis, but always forming, always evolving, always "discovering" fresh novelty. We begin to see how bubbles and crashes form, how markets can be "gamed" or exploited, and how history and institutions matter. In other words we get a much more realistic picture of the economy.

• Technology and Innovation.  Where do new technologies come from — and how exactly does invention work? What constitutes innovation and how is it achieved? Why are certain regions – Silicon Valley for example – hotbeds of innovation, while others languish? Does technology, like biological life, evolve? And how do new industries and the economy itself, emerge from technologies? These questions intrigue me, and the book I finished last year, The Nature of Technology, (see below) attempts to answer them. It argues that all technologies share certain principles; these determine the character of technology and how novel technologies come into being — and hence how innovation works.

• Increasing Returns.   I spent much of my earlier career developing a theoretical framework for economic allocation under increasing returns, in particular studying the dynamics of lock-in to one of many possible outcomes under the influence of small, random events. (Several of my papers are collected in my 1994 book Increasing Returns and Path Dependence in the Economy. ) High technology operates under increasing returns, and to the degree modern economies are shifting toward high tech, the different economics of increasing returns alters the character of competition, business culture, and appropriate government policy in these economies. 

    Recent Book

The Free Press (Simon & Schuster) in the US, Penguin Books in the UK, 2009.

"Multifaceted, enlightening, and stimulating. Invites comparisons with work by Thomas Kuhn and Joseph Schumpeter. Economists, social scientists, engineers, and scientists all may come to regard it as a landmark."  --

“Brian Arthur's brilliantly original analysis of how technology develops and evolves reminds me of Euclid's Geometry --it's clear, simple and seemingly self-evident. Thrilling to read and rich in implications.” --   Richard Rhodes

"The most important book on technology and the economy since Schumpeter. A work of deep and lasting importance." --Eric Beinhocker  

Speaker

I am a well-known keynote speaker at conferences and meetings. Some recent topics: What is happening in the economy, and how should we rethink economics? How is the digital revolution playing out in the economy? How exactly does innovation work and how can it be fostered? If manufacturing and services are heading overseas to China and other countries, how can the US and Europe retain their national competitiveness? In what way will the new technologies—IT, genomics, nanotech—unfold in the economy? My agent is Tom Neilssen at Brightsight Group.

Awards

Lagrange Prize in Complexity Science 2008; Schumpeter Prize in Economics 1990; Guggenheim Fellow, 1987-88; Fellow of the Econometric Society; IBM Faculty Fellow. Honorary doctorates: National Univ. of Ireland (Galway) 2000; Lancaster University (UK) 2009.

Background

Morrison Professor of Population Studies and Economics, Stanford; Professor of Human Biology, Stanford, 1983-1996.

Santa Fe Institute: Member, Science Board 1988-2006; Board of Trustees 1994-2004; Director, Economics Program, 1987-90, and 1994-95; Founders Society.

Ph.D. in Operations Research, Univ. Calif. Berkeley, 1973; MA in Mathematics, Univ. Mich., Ann Arbor,1969

Three Books

The Nature of Technology:  What it Is and How it Evolves.  The Free Press, and Penguin, UK, 2009.

The Economy as an Evolving Complex System II, edited with Steven Durlauf and David Lane, Addison-Wesley, Reading, Mass., Series in the Sciences of Complexity, 1997 

Increasing Returns and Path Dependence in the Economy, Ann Arbor, University of Michigan Press, 1994

Last Modified: April 6, 2012